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Year In Review
December 25, 2015
In 2015, I made one of the best decisions of my life when I accepted the offer to become President of the Real Estate Board of New York. I am grateful and humbled for this opportunity to build on the tremendous work that REBNY does for our industry and for New York City. I want to thank my Chairman Rob Speyer, all of the REBNY members, and my predecessor, Steven Spinola who helped me make this transition and made 2015 a memorable year.
This past year was great for the real estate industry, as New York City continued to hold its position as the preeminent global metropolis. An increasing pace of job creation and more new affordable apartments underway than at any time since the Housing Department’s mandate began in 1978, has meant our industry continued to generate a growing percentage of tax revenue for vital city services.
Thirty years ago, crime was rampant, jobs were scarce and vacant lots abounded throughout the five boroughs. Today, New York City is stronger than ever: we have record low crime, record job growth and the quality of our housing stock is the best it has been since the city began tracking its condition in the mid-1960s. The latter is due in large part to Albany’s adoption of rent regulation reforms in the 1990s, which encouraged property owners to invest in their properties.
The challenges our city faces today are largely due to its successes. Record-breaking tourism and population numbers have proven New York City is growing faster than anyone had planned. Indeed, all estimates predict another million people moving to Manhattan, Brooklyn, the Bronx, Queens and Staten Island by 2040. The turnaround has been remarkable, but more needs to be done to ensure that all New Yorkers benefit from this global migration.
Today we must focus on building enough housing to meet demand at all income levels—we must build our way out of the affordable housing crisis. Not doing so will mean housing becomes harder to find and, as a result, more expensive.
We face many challenges in this endeavor, the most obvious of which is the scarcity of land, driving prices higher. In addition, our property tax system does not align with our policy goals. For example, we tax multi-family rental buildings at more than 30 percent of the buildings’ gross income. And our construction costs are, by far, the highest in the country.
New York City is a city of renters: two-thirds of New Yorkers currently fall into this category. We must build rental housing to ensure that both future and current residents have a place to live. However, as a recent NYU Furman Center report found, the higher construction costs rise, the harder it will be to build rental housing.
We must also invest in our infrastructure to keep up with this level of growth, spearheading projects involving our trains, bridges, streets and grid. REBNY proudly supports smart investments in public transportation, such as the newly opened 7 line extension to the Javits Center and the Gateway Project. Strengthening our transit links to New Jersey is another critical aspect to the future of New York City. Similarly, REBNY is a strong supporter of the rezoning of 1 Vanderbilt and the larger district now under consideration. These actions will modernize the area’s office buildings, ensuring that our city remains the world’s premier corporate hub well into the decades to come.
A growing commercial sector, good schools, low crime, strong transportation networks and affordable housing are all factors that will continue to attract more people to the five boroughs, and we must continue to make our city the best place in the world to live, work and raise a family.
In 2015, our industry once again played a major role in the City’s approximate $78.5 billion budget. Last year, 41 percent of all locally-generated tax revenue came from income-producing properties through real estate taxes, transaction taxes, and personal income and sales taxes attributable to real estate activity. That’s more than $15 billion, and it pays the City’s share of the salaries for every single police officer, firefighter, sanitation worker, teacher and corrections officer, with about $2.5 billion left over for parks, libraries and city services that every New Yorker enjoys.
Finally, we sadly lost a former chairman and a great New Yorker in 2015. John Zuccotti was an extraordinary industry leader and served with distinction in both federal and local government. John loved New York City and understood that, more than any other sector, the real estate industry is intrinsically connected to the success of our city. He was a central player in helping New York recover from the brink of financial collapse in the 1970s and from the 9/11 terrorist attacks, and will be missed by a grateful city.
As we move into 2016, we focus on progress, understanding that the success of our endeavors and members means the success of our exceptional city.