I know there’s a big elephant in the room right now and I will address it in next month’s newsletter when we know more about COVID-19’s impact on the real estate market. All the noise in and around our industry as of late has been about pricing, interest rates, and supply. Despite all of this, something that has caught my attention are the new real estate tax policies and proposals. I do believe change is necessary to address housing shortages, inequality, and affordability; however, how far is too far? The table below illustrates what has passed and what is being proposed.
I will not bore you to death with the minutiae of each, but the cumulative impact of all of these policies should not be discounted or underestimated. The Amazon HQ2 proposal in Long Island City was a good example as it played out publicly. Local politicians screamed corporate greed, the public held rallies, our city was divided, and ultimately Amazon pulled out even though 57% of New Yorkers approved the move (NYT poll). The same fight is happening behind the scenes right now, but no one is talking about it.
We’ve always had the mentality that if we build it, they will come. However, they will not come and locals will not stay if the cost to carry increases by 20 – 30%. The New York Rent Laws Reform cost owners billions of dollars and we’ve seen several landlords go under because of it. No one is losing sleep for them, but we will feel their pain if The Good Cause Eviction Bill and Property Tax Reform Bill are passed.
This is a challenging topic to write about and discuss because I don’t have a solution right now. I don’t know where the common ground is and maybe there isn’t one, but I am concerned it is not receiving enough attention.