Governor Cuomo kicked off his re-election campaign with a rosy State of the State speech this week that promised a freeze on property taxes outside New York City and a renter tax-rebate to assuage City voters. Both require asterisks. The freeze will apply to towns that stay within the existing tax cap limits…something that is harder to do as the cap continues for several years without mandate relief, and in the second year will only apply to towns that consolidate services with other communities – something that local voters seem to reject every time. Meanwhile, the renter rebate for households with under $100,000 income seems to have no connection to actual property taxes, or rent levels, and would amount to an average of only about $153 per household per year.

Locally, the election for Speaker of the City Council was won by Melissa Mark-Viverito, the candidate backed by Mayor Bill de Blasio. Crain’s reported the choice as a win for Local 32BJ and a loss for real estate and business.

Just before her election, Mark-Viverito was reported to have failed to disclose rental income on her own real estate.  Another Council member who owns rental property, Inez Dickens, was hit with a rent strike by tenants who complained they had no heat..

ABO member Castle Oil won an important victory against their insurer over payments for Sandy-related damage. Ace American Insurance had tried to argue that the deductible should be calculated as a percentage of the total premium value of Castle’s facility rather than of the lesser value insured against flood.

The City is preparing to demolish the decaying landmark P.S. 31 in the Bronx, but there is no indication that it recognizes the irony of its ability to ignore the City Landmarks Preservation Commission in a way that private owners cannot.

Join us January 28, 2014 at  2 p.m., in the McGraw Hill Conference Center, 1221 Avenues of the Americas, Room 208, for an important seminar on complying with the Affordable Care Act  Employer Mandate. ABO and the New York State Builders Association will be launching a private health exchange for members to help them meet reporting and insurance requirements. Unlike the State and Federal Exchanges, the ABO exchange will offer both builder and associate members the ability to manage a full array of employee benefits, including health insurance, and handle all the reporting requirements of the law. You can join the exchange and still maintain your current insurance and broker relationships. Please let us know how many to expect from your office by email to associatedbuilders@abogny.com or call 212 385-4949.

SAVE  THE DATE: January 28, 2014 at 2 p.m.,

Complying with the Affordable Care Act  Employer Mandate. ABO and the New York State Builders Association will be launching a private health exchange for members to help them meet reporting and insurance requirements. Unlike the State and Federal Exchanges, the ABO exchange will offer both builder and associate members the ability to manage a full array of defined benefits, including health insurance, the EHIC renewal process and handle all the reporting requirements of the law. You can join the exchange and still maintain your current broker relationships. Get all the details at this important seminar for members and your human resources staff. Be sure to bring them. The location will be announced next week. Please let us know how many to expect from your office by email to associatedbuilders@abogny.com.

Mayor Bill de Blasio announced two appointments of particular interest to developers: Alicia Glen, head of the Urban Investment Group at Goldman Sachs and a former assistant commissioner at HPD will be the Deputy Mayor for Housing and Economic Development. Kyle Kimball will continue as president of the Economic Development Corporation. Kimball has been with EDC since 2008 and became President last summer.

Michael Bloomberg was still Mayor, Monday, when he signed legislation updating the City Fire and Building Codes to comply with 2009 International Codes and make changes in resiliency standards inspired by Hurricane Sandy.

With all the changes at City Hall it is worth keeping an eye on Albany where Republican Senator Charles Fuschillo resigned New Years day. Democrat Senator Eric Adams also left to become Brooklyn Borough President, but the departures make the significance of the Independent Democratic Conference for control of the chamber even greater.

New York remains a tough place to do business according to the Federal Housing Finance Agency. The New York Times reports this weekend that the FHFA has rescinded an adverse market fee on mortgages everywhere but the tri-state area and Florida.  The adverse market condition FHFA is concerned about is the time it takes to get a foreclosure through the courts: New York holds the record with an average of 820 days, more than twice the national average.

The Landmarks Preservation Commission further limited development by and around New York University this week by creating the South Greenwich Village Historic District  between West 4th Street and Houston Street and the Avenue of the Americas and West Broadway. The action brings the total number of designated historic buildings in Greenwich Village overall up to 2,459.

A State Supreme Court judge severely limited class action suits by tenants related to Hurricane Sandy in Adler v. Ogden Cap Props., LLC, noting that each building presented different fact patterns and that conditions varied even within buildings.

In another case reported this week, a US District Court Judge refused to dismiss a discrimination case against the LeFrak Organization for requiring a prospective tenant to show proof of government subsidy before showing an apartment or accepting an application. The prospect was expecting assistance from the City HIV/AIDS Services Administration, which does not provide written proof of eligibility until a rental application is submitted, creating a Catch 22 situation with LeFrak’s standard policies on proof of income.

The Manhattan District Attorney yesterday announced indictments of 17 people and 15 companies for fraud and bribery in electrical contracting. The principal charges involved alleged kickbacks to Donald Russo and Bar Electrical Consulting for steering purchases by Unity Electric Company.

In the last session of the year, the New York City Council set a July 1, 2015 deadline for recycling food waste from large restaurants, caterers, markets and food preparation facilities. Organic waste will have to be separated and either composted or removed for composting in a sign of requirements that smaller establishments and apartments may eventually face.

In Albany, meanwhile, Governor Cuomo dealt with the final pending legislation of the 2013 legislative session, signing a five year extension of the Green Roof tax credit that expired in March.

Graffiti may be ephemeral, but still worth a buck, according to a lengthy decision issued by the U.S. District Court  in Cohen vs. G & M Realty last week. The case involved the 5Pointz warehouse and whether the graffiti painted on the building was significant enough to be protected by the federal Visual Artists Rights Act of 1990.  After dancing around whether the art was ART, the Court said the property owner’s destruction of the work for long planned housing development was unfortunate, but could probably be compensated by money. In determining damages, it noted, courts would have to consider that the artists always knew the building was scheduled for redevelopment and that the art was well documented for posterity. A big plus for the owner, the decision hinted strongly, might be making even more space available for wall artists on the new building.

Looking for vacant sites without any nasty art in the way of development? Crain’s has compiled a database of 7000 vacant privately owned residential lots in response to Mayor-elect de Blasio’s desire to raise taxes on vacant space to encourage development.

Once you buy a lot, you might want to see how the new modular construction technique is working for Forest City Ratner in Brooklyn. The first modules will be trucked to their site near the Barclays Center and stacked up next week.

Or, perhaps you would like to acquire something already built? CoStar this week launched CoStar Multifamily, attempting to create a residential database to rival its long established commercial one.  The records reportedly include asking rents, effective rents, occupancy rates, floor plans and more on 300,000 apartment communities across the country.

Mayor Bloomberg yesterday submitted a balanced 2014 City budget proposal thanks to several one-shot revenue items, including building and taxi medallion sales, and about $250 million more in anticipated real estate taxes than was projected in January. The plan also proposes salary increases for city workers that employee unions have rejected as too paltry  since 2010.  But, in handing Mayor-elect Bill de Blasio what Bloomberg said was the first balanced budget ever received by a new Mayor in City history, Bloomberg has neatly set up de Blasio with total responsibility for any new taxes or expenditures and walked away clean.

Earlier in the week, the City picked up another million dollars from a court settlement with Smart Apartments, a short-term stay management company that had been operating illegal hotel units in about 50 apartments buildings. Smart Apartment was a major user of Airbnb, which the City and State are still pursuing for promoting illegal occupancies.

On the flip side, the City’s booming tech industry introduced two new businesses this week that could make life easier for Airbnb users. Kisi and KeyMe, respectively, are services that provide smart phone apps for opening electronic doors instead of fobs or cards; and a digital key replacement and delivery company for when someone is locked out or wants to share a key.

The Department of City Planning, meanwhile, was reported this morning to be moving ahead with a proposal for down-zoning 530 blocks in Ozone Park that we first reported in September. A vote is expected next month.

Governor Cuomo this week signed legislation permitting the Hudson River Park Trust to sell 1.6 million square feet of air rights up to one block east of the five mile long park.  Environmentalists questioned whether development in the area should be encouraged or permitted post-Sandy, but the park needs the money.

Air rights will not be for sale soon in the Midtown East area after the City Council killed Mayor Bloomberg’s plan to revitalize the aging office market. Mayor-elect de Blasio said he would bring a modified proposal back by the end of next year. Tune in, in 2015.

The City Council did give final approval to a bill requiring new construction and existing apartment buildings over  five stories with water pumps to either have backup power or a potable water tap on lower floors for every one hundred occupants  within eight years. They don’t want to see tenants trapped without drinking water after the next storm or power failure.

According to a survey by ABO member The Marketing Directors the most desirable public amenities in new rental construction are a swimming pool followed by a yoga studio/mediation room, whatever that is.  Handball courts were not that popular. If you have smaller kids you should make sure the pool has a safety cover but you may wonder are pool safety covers really effective? click here to find out.

If you love the idea of relaxing in your own spa, but you don’t want something as permanent as a standard hot tub, the GoPlus spa is the perfect solution. You can set one up almost anywhere flat with a nearby outlet, even indoors or at your campsite.

Ever have an oil tank leak? How about your neighbor? Check out the toxicity of any property or neighborhood with the latest interactive online map provided by Property Shark. Funny, there is no link to my daughter’s room.

 

The election was too close to call, on the Hoboken Rent Control referendum. It now looks as if the referendum to reform rent regulations in Hoboken failed by fewer than 100 votes out of about 10,000 — proving, if nothing else, that even in cities with a long tradition of rent regulation the voters are pretty evenly divided on the issue.

 

 

Bill de Blasio won the New York Mayoral election by a somewhat larger margin. The Real Estate industry reaction ranged from careful appraisals of his past pro-development  actions — he has been a supporter of higher density and opponent of nimbyism — to concern about late reports in today’s Wall Street Journal that he is considering State Sen. Liz Krueger for a position as Housing Czar.

 

 

Meanwhile, the current administration keeps trying to smooth the way for construction with electronic filings. The Department of Buildings last week expanded the HUB e-filing and review service to include Alt. 2 and Alt. 3 permits for minor renovations. Major alteration applications, Alt. 1, filed through the HUB are generally processed three times faster than paper applications.

 

 

Are you still leaving money on the table? Get free rebates for construction materials and equipment you have already bought since April  through the NYSBA Member Rebates Program. ABO members can get literally thousands of dollars for a few minutes filling out a form.

 

 

NYSERDA wants to give you money too. The State Energy Research and Development Authority is sponsoring a Combined Heat and Power -i.e., co-generation – expo from 10-3 November 22nd at The Hall at Times Center, 242 West 41st St, to explain the equipment and incentives.

 

 

Join ABO members and other industry leaders at the Massey Knakal Multifamily Summit November 20th and 21st. Use the code MP-25ABOGNY for a 25 percent discount. Click here to register.

 

The City Council Wednesday gave final approval to the  $580 million Staten Island Wheel and  Empire Outlets Mall project, apparently coming up with about $51 million in City subsidies to partly compensate developer BFC Partners for agreeing to use 100 percent union labor. The Staten Island Advance provided minute to minute coverage of the wheeling and dealing all day, giving an unusually detailed account of what it takes to get approvals to build in New York.

The Council also gave final approval to the 127 block East Elmhurst rezoning, limiting density on side streets in the name of preserving the character of the neighborhood and legalizing some mixed uses on the avenues.

That is not likely to raise property values in East Elmhurst, which, according to city assessments, have dropped about 20 percent since 2008. We know because in another fun use of city data, a blogger  named Chris Walker created an interactive map showing the change in residential assessments from 2008 to 2012 for every City zip code. The biggest increase, 175 percent, appears to be in Williamsburg, followed by the garment district at 107 percent. Assessments in Woodhaven are down 23.5 percent.

The battle to keep flood insurance affordable while promoting rational redevelopment in flood zones is heating up in Washington. NAHB is looking for examples of premium increases, so if your flood insurance rates have zoomed since Sandy please send us details to pass along.

Have a drink and talk about the market with our friends at CHIP and other ABO members at 6 p.m. November 14th in The Morgan Library. RSVP at 212 838-7442.

What is the air worth? An average of $181 per square foot, according to a Furman Institute study of arms length air right sales in the five boroughs. Seventy percent of the transactions were for less than 20,000 square feet, and were accomplished by zoning lot mergers rather than the vaunted sale of landmark or special district rights — perhaps demonstrating the complexity of those deals that make them less attractive. Prices varied widely, thought Manhattan averages were higher. Even mid-Manhattan sales had a wide range, from well under $100 per foot to almost $700.

Dogs may be a lawyer’s best friend. The New York Law Journal (subscription required) this week highlighted two decisions on service animals that will keep heads scratching and property owners litigating. In Kovalevich vs. Rhea, a State Supreme Court judge ruled that a Housing Authority tenant could keep her Pit Bull service animal even though it bit another tenant.  The Authority wasn’t protesting the tenant’s need for an emotional companion, just wanted her to get a tame one. The judge said a leash and muzzle would suffice. In Housing Court, however, a judge ruled for a co-op that wanted a tenant to get rid of her dog which they said violated their no pets policy. In East River Housing Corp. vs. Aaron, the court found that the doctor’s testimony saying that the dog helped the tenant cope with her problems didn’t say she required it.

Mayor Bloomberg this week signed legislation creating the SOHO Business Improvement District, the City’s 68th local tax district for the provision of sanitation and snow removal services, pedestrian and public safety services, capital improvement projects , and neighborhood marketing. There are 130 retail business in the district between Houston and Canal Streets.

Join ABO members and other industry leaders at the Massey Knakal MultiFamily Summit November 20th and 21st. Use the code MP-25ABOGNY for a 25 percent discount. http://mkmultifamilysummit.com/

Spending more for your buildings and getting less for it? You are not alone, according to the latest Construction Outlook Update from the Building Congress. In a generally rosy report on construction spending — residential building increased from a $5.3 billion value in 2008 to $5.9 billion in 2012 — the Congress noted that the money produced 33,000 units in 2008 but only 11,000 in 2012. Overall construction spending  is on track to hit $31.5 billion in 2013. That is a 14 percent increase from 2012 and nominally higher than the $31.1 billion peak in 2007. By 2015, spending should hit 2007 levels after adjustment for inflation.

As the mayoral election approaches the candidates seem to be getting harder to pin down on housing and other issues. Crains tried to parse Joe Lhota and Bill de Blasio’s positions on mandatory inclusionary zoning at Tuesday’s debate with limited success. Apparently, de Blasio wants to require developers to include affordable units in areas with high demand, former manufacturing zones, or projects requiring zoning variances. Lhota  would use zoning or air rights issues to incentivize affordable construction, but wouldn’t require it in otherwise as-of-right construction.

Meanwhile, on Wednesday, California Governor Jerry Brown vetoed legislation that would have permitted mandatory inclusionary zoning by local cities and towns. As former Mayor of Oakland, Brown said that requiring below market construction made development generally more difficult and didn’t deliver  significantly more affordable units.

Join ABO members and other industry leaders at the Massey Knakal MultiFamily Summit November 20th and 21st. Use the code MP-25ABOGNY for a 25 percent discount at

Spending more for your buildings and getting less for it? You are not alone, according to the latest Construction Outlook Update from the Building Congress. In a generally rosy report on construction spending — residential building increased from a $5.3 billion value in 2008 to $5.9 billion in 2012 — the Congress noted that the money produced 33,000 units in 2008 but only 11,000 in 2012. Overall construction spending  is on track to hit $31.5 billion in 2013. That is a 14 percent increase from 2012 and nominally higher than the $31.1 billion peak in 2007. By 2015, spending should hit 2007 levels after adjustment for inflation.

As the mayoral election approaches the candidates seem to be getting harder to pin down on housing and other issues. Crains tried to parse Joe Lhota and Bill de Blasio’s positions on mandatory inclusionary zoning at Tuesday’s debate with limited success. Apparently, de Blasio wants to require developers to include affordable units in areas with high demand, former manufacturing zones, or projects requiring zoning variances. Lhota  would use zoning or air rights issues to incentivize affordable construction, but wouldn’t require it in otherwise as-of-right construction.

Meanwhile, on Wednesday, California Governor Jerry Brown vetoed legislation that would have permitted mandatory inclusionary zoning by local cities and towns. As former Mayor of Oakland, Brown said that requiring below market construction made development generally more difficult and didn’t deliver  significantly more affordable units.

Join ABO members and other industry leaders at the Massey Knakal MultiFamily Summit November 20th and 21st. Use the code MP-25ABOGNY for a 25 percent discount. Click here http://mkmultifamilysummit.com/ to register.