Tag Archives: NYC

Feet to The Fire on Property Taxes

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Newsweek interviewed me for Mamdani’s Property Tax Plans Holding Hochul’s Feet to Fire, Expert Says. It reads, in part,

New York City Mayor Zohran Mamdani’s proposal for a 9.5 percent property tax increase in the city is a way of holding Governor Kathy Hochul’s “feet to the fire,” according to David Reiss, professor of law at Cornell Tech and Cornell Law School.

Mamdani said this week that he was proposing the increase in property tax rates in New York City as an option if he could not persuade the governor to approve higher taxes on the wealthy.

“It’s very interesting, because Mamdani endorsed her in her race for governor, which is this year,” Reiss, an expert in real estate, told Newsweek, pointing at the strong relationship that the two have maintained until now.

Not only is the 34-year-old mayor backing Hochul in her reelection bid, but he also told organizers of a Tax the Rich rally in Albany, planned for February 25, that he would likely not attend the event because he does not want to antagonize the governor, as reported by The New York Times.

“So he’s done some things that are very good for her, but then he’s kind of holding her feet to the fire and saying that Albany can make the situation much better in New York, and this is how I want you to do it,” Reiss said.

“‘I want to raise taxes on the wealthy, and the backup—because I want more revenue for the city—would be my property tax hike, but I acknowledge that it’s painful,’” he added. “’I acknowledge that that’s unpleasant, but I want to hold your feet to the fire on the income tax increase.’”

* * *

“I think Mayor Mamdani is trying to set the terms of the debate and kind of trying to allocate blame for the budget deficit that the city’s about to face,” Reiss said. “And so he’s trying to say, ‘I have a path forward, but it requires partners in government to help with that path forward,’” he added.

“And so, he’s kind of trying to set up a dynamic where, when blame is allocated for budget cuts and promises unkept, he could say he did his best to make this happen, but partners in government are not playing ball with him.”

* * *

For Reiss, the unfolding tension between Mamdani and Hochul over a “rich tax” in New York is a reflection of a bigger split within the Democratic Party nationwide.

“I think both in New York and nationally, what we’re seeing is the economically progressive wing of the Democratic Party, as reflected in Mamdani, represents a push to reallocate resources away from the very wealthy towards the low-income and working class constituents,” Reiss said.

Mamdani, he thinks, is doing a good job at setting that debate up. The question is, he said, which wing of the party will win.

“It’s an interesting question in a majority Democratic state like New York, where both the governor and the mayor are Democrats. But it’s also going to be interesting in jurisdictions where you might have a Democratic mayor and a Republican governor, especially as we go to the congressional midterms,” he added.

“Republicans are going to talk about Socialist Democrats and Democrats are going to talk about billionaire-loving Republicans. And voters will have to decide, you know, which vision of America they agree with more.”

* * *

Voters, Reiss said, are sophisticated enough to understand that Mamdani might not keep all of his campaign promises, and might be willing to cut him some slack because he has already delivered some important reforms.

“For Mamdani, a very early win was getting the governor to go along with the child care proposal, which is, I think, fulfilling a major campaign promise,” he said.

“I think he now has the ability, because he’s been able to appoint a majority to the rent guidelines board, to encourage the board to implement a rent freeze, and that was a major campaign promise,” Reiss added.

Mamdani’s First 50 Days: Housing Edition

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By Dmitryshein, CC BY-SA 4.0

NYC Mayor Zohran Mamdani

I was interviewed for AMNewYork’s story, Mamdani’s First 50 Days. It reads, in part,

For Professor David Reiss, a Cornell University housing expert and former chair of the Rent Guidelines Board, the mayor’s housing orientation so far is unmistakably pro-tenant, but it also underscores deeper challenges.

“He’s clearly pro-tenant,” Reiss said, noting Mamdani’s rhetoric, appointments, and actions such as launching his rental rip-off hearings and the revival of the Mayor’s office to protect tenants. But he cautioned that short-term policies aimed at controlling tenants’ costs must also account for the long-term viability of the housing stock.

“Are you pro-tenants five years, 10 years, 15 years down the line?” Reiss asked, pointing to the risk that buildings with constrained revenue might struggle to cover unavoidable expenses like property tax, insurance, and mortgage payments without meaningful engagement.

Reiss traced much of this pressure to state rent restrictions, which eliminated several mechanisms that previously allowed landlords to raise rents between tenancies. Under current conditions, he said, the annual RGB adjustments are often the only permissible rent increases, which, in recent years, have been modest in the view of landlord groups.

If rents are capped or frozen, his view is that the city will have very few tools to ensure financial stability without subsidies or cost reductions — whether direct (financial support) or indirect (tax relief or reduced operating costs).

“You have very few tools,” he said. “They usually involve somehow reducing costs directly or indirectly, or increasing income by subsidizing,” Reiss said that any meaningful approach will have to consider how the city allocates limited funds, especially in the face of a budget gap that has already pushed the administration to consider rainy day funds and reserve drawdowns elsewhere.

That tension between immediate affordability and long-range health of the housing stock frames much of the current policy conversation. Reiss said the rent freeze itself — assuming it survives legal and procedural hurdles — would represent a significant political success if delivered, given that it was a core campaign pledge. But he stressed that a broader housing strategy must also ensure that rent-regulated buildings can cover ongoing costs without descending into default or neglect.

“Success for the Mamdani administration,” Reiss said, “is to thread the needle between his expressed statement of reducing rent increases or rent freeze on the one hand, but ensuring that the housing stock has enough income to support itself — not just for this year, but for three years, five years, seven years down the line.”

Mamdani and Affordable Housing Development

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CNN quoted me in Zohran Mamdani Has Big Housing Plans. Here’s What Stands in The Way. It reads, in part,

Mamdani’s rent freeze plan could undermine his goal of building 200,000 publicly subsidized, rent-stabilized, permanently affordable homes over the next decade for low-income households and seniors.

That’s because the private sector may be dissuaded from participating if these buildings don’t include market-rate housing. The private sector has a “very important role” to play in building housing, Mamdani has said.

“A rent freeze will change how a conversion might pay off for the developer,” said David Reiss, a law professor at Cornell University who served on the Rent Guidelines Board under Mayor Bill de Blasio.

And to be permanently affordable for extremely low-income renters, it will require deeper government subsidies than Mamdani has pledged, experts say. Previous New York City mayors have attempted to produce housing for a wide range of incomes to help offset higher subsidies for deeply-affordable units.

“It’s in the right direction to focus on people with the greatest affordability challenges,” said Alex Schwartz, an urban policy professor at The New School and a current member of the Rent Guidelines Board. “It’s important to recognize that the capital dollars won’t go as far in terms of total numbers of units if they only go toward people with extremely low incomes.”

Mamdani wants the city to borrow $70 billion to build affordable housing over the next decade, on top of the roughly $25 billion it already plans to invest.

That’s no easy task – he will need state approval since the plan would exceed the city’s debt limit by around $30 billion, as well as the New York City Council’s approval of zoning reforms that would make it easier to build.

“This would be a significant increase in city capital to produce deeply affordable housing,” said Rachel Fee, the executive director of the New York City Housing Conference, a non-profit affordable housing policy and advocacy organization. “It’s not something he can just implement on his own. It will take a political coalition to make this happen.”

 

NYC Rent Guidelines Board Final Vote Interview

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I was interviewed on WCBS AM’s Drive Time about the vote of the New York City Rent Guidelines Board. Click here to hear it.

Does Historic Preservation Limit Affordable Housing?

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By Stefan Kühn - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=9413214

I answer that it can in CQ Researcher’s Historic Preservation:  Can The Past Escape The Wrecking Ball?

Many people fail to realize that land use policies like historic preservation involve big trade-offs. The most important one is that if you want to protect existing structures from demolition and modification, you can’t replace them with bigger ones that could house more people. Consider:

  • Historic preservation equals height and density restrictions. New building technologies (think steel girders and elevators) allow buildings to be built higher as time goes by. If a city landmarks a large percentage of its inner core, it restricts the ability of that core to go higher. This can lead to sprawl, as a growing population is pushed farther and farther from the city center.
  • Historic preservation favors the wealthy. Limited supply drives up housing prices and apartment rents, benefiting owners. And low-income and younger households are likely to suffer, as they are least able to bear the cost of the increases compared to other households. Future residents — think Midwesterners, Southerners and immigrants seeking to relocate to a city like New York for job opportunities — will also suffer.
  • It isn’t easy for historic preservation to be green. It feels environmentally responsible to protect older, low-density buildings in city centers because you have no dusty demolition, no noisy construction. But it actually comes at a big environmental cost. Denser construction reduces reliance on cars and thereby lowers carbon emissions. People living in a dense city have a much smaller carbon footprint than those in a car-oriented suburb.

Just because preservation comes at a cost does not mean it is bad. Much of our past is worth protecting. Some places benefit from maintaining their identities — think of the European cities that draw the most tourists year in and year out. But it is bad to deploy historic preservation indiscriminately, without evaluating the costs it imposes on current residents and potential future ones.

Cities that want to encourage entrepreneurship and affordable housing should deploy historic preservation and other restrictive land use tools thoughtfully. Otherwise, those cities will be inhabited by comparatively rich folks who complain about the sterility of their current lives and who are nostalgic for “the good old days” when cities were diverse and hotbeds of creativity.

If they fail to understand the trade-offs inherent in historic preservation, they won’t even understand that a part of the problem is the very policy they support to “protect” their vision of their community.

Amazonian Rage in NYC

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photo by Theeditor93

Vice quoted me in Amazon Is Bringing in Elite Lobbyists Amid Seething Rage Over HQ2. It opens,

Amazon might be too big to tax, but it’s not too big to freak out.

As the company tries to erect a massive headquarters in America’s largest city, it has come up against staunch opposition from residents, politicians and unions—all concerned the powerful monopoly will serve to inflate rent and strain local infrastructure, especially the housing supply and subway system. And while it might seem like a trillion-dollar company could easily quash protesting naysayers, turns out CEO Jeff Bezos might actually have good reason to try and win the haters over.

On Wednesday, the Wall Street Journal reported Amazon hired high-powered Democratic consulting firm SKD Knickerbocker, and a lobbying shop called Greenberg Traurig, to help smooth the way forward for its new HQ. While Amazon remained relatively tight-lipped, the company has sought to make inroads into affected communities—planning meetings with public-housing residents and reaching out to members of the city council. But some elected officials, including Senator Mike Gianaris and NYC Councilman Jimmy Van Bramer, whose districts include the HQ’s proposed turf in Long Island City, have refused to serve on its advisory board, indicating instead a desire to kill the project entirely. Meanwhile, a Quinnipiac poll that dropped this week showed the majority of NYC residents backed the HQ2 plan, but activists groups and community board members have continued to organize, spurred on by Congresswoman-elect Alexandria Ocasio-Cortez—or at least her Twitter account.

In fact, the new Amazon influence operation, which emerged a few weeks after HQ2 plan was made official, suggested there were still concrete ways locals could thwart or at least put a dent in the company’s expansion scheme. If nothing else, an extremely-powerful company that has experience in the DC lobbying game is finding out it won’t get a new home in NYC without a fight that cuts at the core of the Democratic Party’s identity.

According to Richard Brodsky, a lawyer and veteran Democratic politician who served in the state assembly, if city officials or other activists took Amazon or the politicians who supported the plan to court, they could employ legislative subpoenas to demand more documentation of the project, and investigate compliance issues. Brodsky argued Amazon’s bid might provide the jobs promised, but that the company still had a long way to go in informing the public about how it would impact communities.

“Because the governor and the mayor have given this project to a set of soviet-style bureaucracies, there’s no one to ask the questions and no one to answer,” he told me, referring to the special fast-track process Mayor Bill de Blasio and Governor Andrew Cuomo, both Democrats, have tapped to push through the Amazon deal. “Who the hell do you ask?”

Litigation is a fairly common way of handling disputes over projects like this in the city, according to David Reiss, a law professor and expert on community development at Brooklyn Law School. “Not being a shy bunch, New Yorkers often file lawsuits that try to set up procedural roadblocks to the project,” he told me via email. “These suits can slow down or even stop projects—and can give community members leverage with the City, State and project developers.” Even if it isn’t stopped altogether, legal action could help modify the project and fund parks, schools or transit.

Under the current approach from on high, however, the Amazon HQ also had to be approved by the Public Authorities Control Board (PACB), comprised of gubernatorial appointees mostly made in consultation with the state legislature. This may prove to be among the only serious points of leverage Amazon opponents have to stall, or, in an extreme case, block the whole project. Even then, Brodsky said, the PACB was only technically supposed to oversee financial concerns, and not necessarily gauge a project’s social impact.

The city, for its part, appeared to largely be standing behind its original plan as it geared up for public hearings beginning next week. A spokesperson from the NYC Economic Development Corporation, the nonprofit development agency contracted by the city that helped broker the deal, told me Amazon was working to broker partnerships with affordable-housing developments and other community organizations, as well as provide concrete details about the 25,000 jobs promised in the company’s initial memo about the project.

The spokesperson also dismissed the idea that the new HQ would strain the city’s mess of a public transportation system. They argued the current flow of traffic on the subway routes amounted to Queens residents commuting to Manhattan for work, and that the “reverse commute” of Amazon employees coming to Long Island City would balance things in the other direction, not jam up trains in some new way. (It’s worth noting that Amazon employees were already reportedly looking for rental properties in Long Island City proper.)

Those resisting the headquarters, however, were unlikely to be swayed by more details, logistical help, or civic engagement on part of a brand many despised for what it represented in the annals of modern capitalism. Ocasio-Cortez, who has become a national spokesperson for anti-Bezos sentiment and a leading light of a left-wing insurgency in the Democratic Party, took to Twitter again on Tuesday: “Now what I DON’T want is for our public funds to be funding freebie helipads for Amazon + robber baron billionaires, all while NYCHA and public schools go underfunded & mom+pops get nowhere near that kind of a break,” she said, capturing criticism of some of the most comical parts of the Amazon deal as brokered by de Blasio and Cuomo.

Ocasio-Cortez’s Democratic Socialist bent may still be a nascent one, and her job in DC means local activist groups will have to lead the fight on the ground. (Some unions actually supported the deal, further exposing the internal Democratic Party divide at issue here.) At the same time, it’s important to look back to previous massive corporate deals for context on what’s going on. While Amazon, as a company, doesn’t have many contemporaries in the city trying to launch a new home at this scale, the way stadiums, universities and other hubs have been constructed in NYC in the past will help inform what does—and doesn’t—happen in Long Island City.

The EDC spokesperson, for example, pointed out that other big projects—such as Columbia University’s expansion and Atlantic Yards—were also achieved via a General Project Plan pushed through by the state instead of undergoing to the more public land review process at the city level. Using that fast-track in Amazon’s case has been a key flashpoint in the dispute over its origin, garnering frustration from Van Bramer and his colleagues. (Announcing a project before knowing the specific details, the EDC spokesperson insisted, was par for the course in cases like this one.)

This fast-tracking does happen often with larger projects, Reiss agreed, noting that land procedures can be bypassed when the state government is involved, leaving some feeling like their voices were ignored. “This can cut deeply because they are often the ones who are most affected by the negatives of the construction process and the changes that the project bring about in their communities,” he told me.