November 28, 2022

Kathy Hochul (right) and Lee Zeldin (Getty)

Kathy Hochul (right) and Lee Zeldin (Getty)

Gov. Kathy Hochul promised in June that she would go to bat for the real estate sector; now he will have the chance to prove it.

Hochul fended off a challenge from Republican Rep. Lee Zeldin, winning her first full term as governor, according to the Associated Press. She is the first woman elected to the position in New York.

Industry players overwhelmingly favored Hochul, who appeared poised for an easy victory until the final weeks of the campaign, when her lead in opinion polls dwindled to single digits.

After taking over from Gov. Andrew Cuomo, Hochul introduced a proposal to replace the expiring 421a property tax, a key issue for real estate. But that and a slew of other proposals aimed at spurring housing development failed to move forward. Hochul has said he plans to review the tax break and his other housing initiatives next year.

Hochul enjoyed the support of some of the city’s major developers, as well as unions representing construction workers and the building trades. Early supporters of his campaign included Steve Roth of Vornado Realty Trust, Gary Barnett of Extell Development, Jerry Speyer of Tishman Speyer, Larry Silverstein of Silverstein Properties and Related Companies Chairman Stephen Ross and CEO Jeff Blau.

Developer Don Peebles, who hosted a fundraiser for Hochul in August, previously said The real deal that he was interested in seeing her “elected in her own right,” noting that he supports candidates who are “highly qualified and will break down barriers.”

In the past two weeks, a political action committee linked to Madison Square Garden chairman James Dolan spent $560,000 on ads promoting Hochul, according to the Times Union. Hochul’s plans for the renovation and expansion of Penn Station, as well as the 18 million square feet of surrounding new development, do not require the arena to be relocated.

Madison Square Garden’s operating permit expires next year and will have to be renewed by the City Council. Advocates have pushed against renewing the permit and advocated relocating the arena to create a new entrance to the transit core.

Meanwhile, Zeldin’s tough stance on crime resonated with some in the industry. The rise in crime, or the perception of it, threatens to scare off businesses, tenants and tourists.

In October, Aurora Capital president Jared Epstein, along with other prominent names in the industry, including Haim Chera, organized a fundraiser for Zeldin. Epstein said he is not guided by political party affiliations, citing his support for Mayor Eric Adams, a moderate Democrat. He said Zeldin’s position on criminal justice, which promised to oust Manhattan District Attorney Alvin Bragg and change the state’s cashless bail policies, was the “common sense” approach to curbing crime in the city

“Bail reform and the anti-police movement have very materially impacted the life that my family and I have here in Manhattan,” he said, noting that his wife is afraid to go out alone at night and that feeling comfortable leaving their children. outside without supervision. “With Kathy Hochul, the city will continue to deteriorate.”

Crime in the city has been on the decline for decades, and violent crime remains at record lows. But serious crime has risen over the past two years, surpassing pre-pandemic levels, according to City and State. Major crimes on the city’s transit system rose 44 percent between January and September compared to the same period last year, according to a Bloomberg analysis.

Political action committees linked to the Rent Stabilization Association, a group of homeowners, poured nearly $90,000 into Zeldin’s campaign. And real estate dynasties including the Adjmi, Chera and Cayre families gave hundreds of thousands of dollars to the Long Island representative over the past two years.

But Hochul remained the top pick in the industry. Proponents argue that building multi-family housing, especially affordable apartments, is economically unfeasible without 421a or a similar incentive. Hochul’s attempt to replace the tax cut in this year’s state budget failed, and lawmakers showed little interest in negotiating the terms of the proposal, called 485w. Zeldin expressed support for the tax cut, but in its initial iteration.

Progressives flocked to Hochul’s as reports warned his lead over Zeldin was shrinking, and the Working Families Party called an “emergency rooftop meeting” last week, according to the New York Times . In a statement Tuesday night, Housing Justice for All coordinator Cea Weaver said the uncertainty of Hochul’s victory is a “damning statement about the politics of moderation.”

“Hochul’s willingness to do the bidding of wealthy real estate donors and turn a blind eye to the suffering of everyday New Yorkers almost cost him this election,” he said.

Hochul has not publicly supported one of the key legislative priorities of Housing Justice for All, eviction for good cause. The governor has said she plans to unveil a plan next year that could create up to a million homes, but it’s not yet clear how that would be achieved. However, it is expected to bring back proposals to facilitate office-to-residential conversions and to allow the construction of accessory housing units in areas zoned for single-family homes. He may also propose a measure that would raise the limit on the proportion of residential land in the city, which he previously proposed.

The success of these and other proposals depends on the fate of the Senate and whether Democrats manage to maintain their majority and veto power.

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