In a city that never ceases

Transcription

1 Tribune/Press Real estate MaRketplace Nov. 3-9, 2016 Tribune Page 21 REN T I N G OW N I N G DE V E L O P I N G IN V E S T M E N T FI N A N C E Real Estate VOL. 3 NO. 11 NOV. 3-9, 2016 MARKETPLACE Queens Tribune Honorees Talk Real Estate BY EDITORIAL STAFF On Oct. 19, the Queens Tribune honored members of Queens real estate community at the Real Estate Marketplace Awards at Terrace on the Park. Interspersed with appearances from elected officials, including New York City Mayor Bill de Blasio and Borough President Melinda Katz, the Tribune s publisher, Michael Nussbaum, presented awards to real estate experts who have contributed to Queens booming marketplace. The Queens Tribune spoke to many of the honorees and their associates in order to tap into their knowledge and experience and understand the mechanisms behind the Queens real estate explosion. Michael Mattone, who is a developer along with his father, honoree Joe Mattone Sr., chairman of Mattone Group LLC, said that Western Queens and Eastern Brooklyn are booming, especially along the 7 line. He said his father s group is developing a residential building in Ridgewood and that in the past, they never would have guessed it was an area that was in the market for more residential buildings. He said millennials With the boom of cheap transit solutions like Zipcar and Uber paired with the convenience of public Queens offers a number of neighborhood features besides transportation that make it an appealing place who are now renting transportation in some to live. apartments don t drive Queens neighborhoods, The proximity to Manhattan, and, it s a different dynamic. They would rather travel by the subway. Honoree John J. Ciafone, Esq., agreed. He looked Cummings said that the once-appealing quiet suburban areas are no longer as viable as they once were. He added that these the great mass transportation is there; the views of the waterfront; the good, strong, established communities, out across the expanse of booming areas provide he listed. There s good Queens from the windows opportunities not just for support of restaurants at Terrace on the Park and noted, Anything along the 7 line is valuable. He added that there are homes in areas of Western Queens such as suburban Glendale that sold 10 years ago for $450,000 and are now selling for $750,000 or higher. Current CEO and president of Investor s Bank and fellow honoree Kevin investors, but for families and individuals. Millennials want to be in these transit centers, he said. They don t want to be in Long Island or suburban New Jersey. They re attracted to the urban areas. They want to be close to the action. I mean how many kids don t have cars now? Ronald Hartmann, executive and bars, established and growing. The young people are moving in in droves, and it s pretty clear why. While many of these pillars of Queens living have existed for decades, there seem to be new discoveries ripe with opportunity for those in the real estate industry. Hartmann said that this is a result of a newfound desire for city Cummings called those vice president living outside the expen- spots along transportation hubs transit villages. of Flushing Bank, told the Queens Tribune that (continued on page 26)

2 Page 22 Tribune Nov. 3-9, Tribune/Press Real estate MaRketplace Queens Growth: A Gateway To The Future By Chris Jones Senior Vice President and Chief Planner, Regional Plan Association In a city that never ceases to amaze us, one of the most astounding views in the five boroughs is the one that you get when you emerge on the Long Island City side of the Queens- Midtown tunnel. For over two decades, we all got used to seeing that lonely Citibank tower standing across the East River. We kept hearing promises of what was to come, but somehow it was never the right time. The economy would stumble. The financing wouldn t come together. The terrorist attacks of September 11th rightly focused our attention on rebuilding what we had lost. But when things started happening, they happened fast. Seeing the new skyline from Manhattan is one thing. But with more than two dozen new projects planned or under construction, the street-level view gives you the visceral sense of a new city literally growing out of the pavement. And for the borough of Queens, Long Island City is just the portal to a place with enormous energy, diversity and potential. Residential and commercial developments are happening in a long list of neighborhoods. Queens is not only New York City s largest borough; it is also central to the future of the entire metropolitan region. Its two airports are gateways to the global economy. The Long Island Rail Road station in Jamaica is a hub of the busiest commuter rail system in the United States. Gateway National Park in Jamaica Bay is a unique ecosystem that nourishes coastal areas and wildlife that are important to the whole New York area. But Queens success is far from complete, and also comes at a price. Like the rest of the city and the region, over the lpast two decades it has become a much less affordable place to live. It s still a bargain compared to Manhattan or brownstone Brooklyn, but the gap is closing fast. With more people wanting to live here, we haven t been able to build nearly enough new homes at rents and prices that the average New Yorker can afford. And wages for most workers are only now starting to increase after years of stagnation. Growth also puts tremendous strains on our infrastructure, and on neighborhood services. Subways, schools and parks have become more crowded, and funding from all sources federal, state and city is far less than what is needed. So in many ways, Queens epitomizes both the resurgence of the New York region and the enormous challenges that we face for the future. So what s in store for the next 25 years? There are certain things that we can count on. We know that the population is going to get older as the baby boomers continue to age, and that there will be relatively fewer people coming into the workforce to take their place. We know that we will become even more racially and ethnically diverse. Even if immigration slows dramatically, younger residents are far more likely to be black, Hispanic or Asian than older residents. And we can be quite sure that the earth is going to get warmer and sea levels will rise, even if we don t know how fast this will happen or how frequently storms and other disruptions will occur. Some of the things that we don t know are how rapidly the economy will grow, exactly what types of jobs we will have or how technology will change the ways that we live and work. Queens is likely to continue to grow, and will have to find ways to welcome newcomers that also benefit existing neighborhoods and residents. What s happening now in Long Island City and western Queens is part of that future, but so are other neighborhoods in central and eastern Queens. Jamaica is starting to see a new wave of hotel development spurred by the growth of Kennedy Airport, the popularity of the AirTrain and a Statistics show jobs and percentage of income to rent are on the rise in Queens. rezoning of the greater Jamaica area. In the next few years, over 2,000 rooms are projected to go into construction. We can expect to see JFK continue to expand, both in terms of passengers and new facilities. The LIRR will provide even more service at Jamaica once East Side Access is completed and a third track on its main line is built. These developments create the possibility for Jamaica to become a new center for the city and the region, one that anchors a constellation of airport-related services with jobs, workforce programs and business opportunities for local residents and businesses. The Jamaica Now initiative launched by Mayor de Blasio and Borough President Katz is addressing a range of neighborhood issues to advance this vision. The Regional Plan Association, working with the Greater Jamaica Development Corporation, is looking at longer-term strategies to build on the city and borough efforts. Further east, Flushing may be the next center to anchor a new economy. Community Board 7 is already the most populous community board in the city. It s both economically and ethnically diverse. There is a huge demand for office space, and it s one of the only markets in the outer boroughs where it s often more profitable to use upper floors for commercial rather than residential use. What s needed is an upgrade of its transportation facilities, public spaces and zoning. The Main Street subway station is the busiest station outside of Manhattan. The waterfront is inaccessible, and there is a shortage of neighborhood parks. Expansion of both commercial space and mixedincome housing near the train station could be designed to create a destination. Together, these three centers Long Island City, Jamaica and Flushing would create a corridor for mixed-use, mixed-income development connecting Manhattan to Queens, Nassau and Suffolk. There are a number of city and regional actions that could facilitate it. One is to start making greater use of our commuter railroads for intracity travel. It makes no sense for Long Island Rail Road and Metro-North trains to have empty seats when parts of Queens, Brooklyn and the Bronx that are served by commuter rail have inadequate subway service. A second is to look at industrial space as a critical part of the new economy. This is important not just to retain as many good jobs as we can, but also to have the distribution, transportation and production facilities needed for a region that could reach 26 million people. Finally, we need to make sure that neighborhood services and infrastructure are keeping pace with new development. Keeping the city economically vibrant, affordable and livable at the same time is hard, but if we re not creating the schools, parks and transit to go with new housing and office space, then we ll soon start losing the very qualities that make the city and region attractive in the first place.

3 Tribune/Press Real estate MaRketplace Nov. 3-9, 2016 Tribune Page 23 NEWLY CONSTRUCTED APARTMENTS FOR RENT # Apts. Available Apartment Size Monthly Rent* Hunter L.L.C and Hunter Affordable Lessee L.L.C. are pleased to announce applications are now being accepted for 195 affordable housing rental apartments under construction at Hunter Street, in the Long Island City Section of Queens. This building is being constructed with financing provided through the New York State Homes and Community Renewal affordable housing program. The size, rent, and targeted income distribution for the 195 apartments are as follows: Household Size** *Tenant responsible for Electric **Subject to occupancy criteria ***Income guidelines subject to change Qualified Applicants will be required to meet income guidelines and additional selection criteria. To receive an application, mail a SELF ADDRESSED ENVELOPE to: Hunter c/o: The Wavecrest Management Team, th Street, Richmond Hill, NY 11418, or download an application from Submit completed applications by regular mail only to the post office box number listed on the application postmarked by November 30th, No priority, certified, registered, expressed or overnight mail will be accepted. Applications postmarked after 11/30/16 will be set aside for possible future consideration. Applications will be selected by lottery. There will be a preference for 50% of the apartments for residents of Queens Community Board 2. Applicants who submit more than one application will be disqualified. Disqualified applications will not be accepted. No Broker s Fee. No Application Fee. Andrew M Cuomo, Governor New York State Housing Finance Agency James S. Rubin, Commissioner Total Annual Income Range Minimum Maximum*** 70 Studio $913 1 $32,640- $38, Bedroom $ Bedroom $ $34,971 - $38,100 $34,971 - $43,500 $41,965 - $43,500 $41,965 - $48,960 $41,965 - $54,360

4 Page 24 Tribune Nov. 3-9, What s the Exit Plan on Affordable Housing? By BILL STANIFORD CEO Urbint It s safe to say that whatever we ve been doing with affordable housing isn t working and needs to be rethought. Homelessness is on the rise and predictions of an explosion seem plausible. The Feds, through HUD, are threatening to create more chaos in NYC with new rules on housing subsidies. There has to be a better way and it s going to require some creative thinking. First, there are some facts that need to be addressed: The city is not the best landlord. Renters don t always have the best interest of the property in mind. Residents and community board members want more control over their neighborhoods. The law of supply and demand always prevails. Projects without an exit plan are rarely successful. Let s face it: Government excels at securing resources. It is flawed when deciding where those resources should be deployed and inefficient at Urbint CEO Bill Staniford administration. In short, government should not be a landlord. However, in reality there are no alternatives, so for every project where government takes on the role of landlord, there must be an exit plan. Anything else would be courting the public housing fiscal disaster that has been well documented. One of the major problems in public housing is an agency issue. Residents of the NYC Housing Authority (NYCHA) are not shareholders in the sense that they do not have any motivation to maintain, monitor or improve their communities. Any new NYCHA housing developments should consider the possibility of a rent-to-own mechanism that would create incentives for community improvements, from neighborhood watches to beautification projects, general maintenance and school involvement. Property ownership creates powerful motivations for community involvement over time as equity is built. Eventually, the city will need to turn over the entity to the private sector to unlock the newly created value. This concept could unleash a new era of growth in unused city lands, increase community values, and create opportunities for families to escape poverty. Why can t a portion of the state subsidies become an equity position for the tenant? Wouldn t everyone in the city benefit if NYCHA residents were able to build at least a modest nest egg that they could pass on to their offspring? Financial mechanisms could be put into place where after a period of time, properties could be turned over to the open market. Releasing the city from its responsibilities and creating an opportunity for the city to recoup costs would be a positive. Of course, turning over NYCHA properties to the open market would decrease affordable housing, right? Not at all. There are many locations and properties that could be developed with this business model, and the city holds the key to unlocking the value: air rights. The air rights are currently tied to the zoning, and the city should be motivated to align the goals of the city with the concerns of the neighborhood. So the question becomes: How do we align the community boards with the need for affordable housing projects that developers would be excited about? The answer may lie in land value capture (LVC). Wouldn t it be nice if the city used its air rights generation power to create an opportunity for NYC residents to escape substandard housing, build value in a new community, and be intrinsically motivated to ensure and maintain value creation? Wouldn t community board members be more interested in bringing these new affordable housing projects to their backyard if they knew the individuals living in the properties had a vested interest in the appreciation of the property? If City Hall focuses its energies on securing resources by using the zoning laws more effectively, it could return more of the decision-making powers to the community boards themselves. Through LVC the city could direct resources to the MTA, local school districts and community projects. In order to get more projects started and completed, we are going to have to do a better job of aligning the goals of the city, the community boards and developers. Let s start with one question: How can this new homeless shelter, halfway house, or affordable housing Tribune/Press Real estate MaRketplace project increase the value of the property in the long run? The answer may lie in finite building-use agreements, favorable zoning, subsidies with or without 421a, community and transportation improvement projects, and ultimately privatization. One thing is for certain: City Hall is going to need a less contentious relationship with Albany. In order to create continuous downward pressure on housing and rental prices we must create more supply. Period. The last I checked it hadn t changed to the theory of supply and demand; it was still a Law. There are plenty of properties in our beloved city that are capable of being developed for affordable housing, and there is an almost infinite amount of air rights. We have an exceedingly capable MTA ready, willing and able to provide first-class transportation to new development as long as there is sufficient funding through LVC. The time has come for us to take a long look at the golden assets identified by Scott Stringer and start using new digital data platforms like Urbint.com to identify potential target properties ripe for affordable housing development. Working strategically with shared-space companies like WeWork, which house well over 6,000 NYC startups, may also prove fruitful when identifying target locations not just for housing but for community development that doesn t just continue to funnel workers into Manhattan. A fresh, new, comprehensive datadriven strategy that brings together community, city and state leadership is necessary. The city needs to develop a program that will stop the fiscal bleeding, motivate community board members to become proponents for development, grant the MTA a permanent seat at the table, and attract top-quality developers for smart, green, and sustainable NYCHA developments. A rent-to-own program, in partnership with the city, will provide the neighborhoods with supportive community members motivated to protect and grow their assets. Asset development is a clear way for tenants to escape crushing cycles of poverty while creating a vehicle for the city to recoup construction expenses. Both parties would now have intrinsic motivations for maintenance, safety and school performance. This type of public-private partnership is necessary to permanently solve the issues of affordable housing that have been plaguing our city for generations. The ultimate goal is creating true community development projects that increase value for all stakeholders. There are roughly 600,000 souls currently living in NY- CHA housing. Imagine if these renters began thinking like owners, to help our city move forward into the 21st century so that we can prepare for the 22nd. We all know that the city is not a good landlord. Just maybe it can become a decent asset builder.

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6 Page 26 Tribune Nov. 3-9, Real Estate Marketplace Honorees Tribune/Press Real estate MaRketplace Edith O Donnell, Jackson Robert and Emily Lin (Above): Kevin Louie, Mark Gregoria and William Romero (Left): Martin Cottingham and Thomas Grech Queens Tribune Honorees (continued from page 21) sive spaces of Manhattan. Even with the booming industry, Hartmann believes that Queens still has room for growth, particularly in the retail sector. When the Queens Tribune spoke with Emily Lin, founder and principal of LIN + Associates Architects, she said that Queens has been growing tremendously over the past five years but that if 421-A, a tax incentive program that is a partial real estate tax exemption for the new construction of multifamily rental housing, were to come back, there would be a substantial increase in development growth throughout the city, particularly in untapped areas like Jamaica. Long Island City is out of this world, Flushing is getting too expensive, but Jamaica there s a lot of development potential in Jamaica, said Lin. I d like to buy Jamaica. Regional Plan Association senior vice president and chief planner Christopher Jones was not only an award recipient, but given his real estate success, he was the keynote speaker of the event. There is no question that real estate in Queens has taken off in the last several years, Jones told the Queens Tribune. However, Jones said that problems like overcrowding, public transportation, infrastructure and the overall New York City economy needed to improve before Queens real estate market could grow further. Executive consultant Bob Nyman was in attendance to support his partner, award recipient president of Crystal Windows Thomas Chen. Although Crystal Windows, a window installation and manufacturing company, is not involved in development, it is affected by the real estate market because more development means more windows. According to Nyman, the market began to turn around for the good around Honoree Joseph Strasburg is the longtime president of the Rent Stabilization Association, an organization that represents the owners of rent-stabilized and rentregulated buildings. He pointed to continuing immigration into the outer boroughs as a contributing factor to Queens growth, helping to explain why the outer boroughs continue to grow even as Manhattan is slowing down. There s a pent-up demand for housing, and as soon as you build it gets filled up immediately, he said. However, Strasburg also expressed caution, noting that the market can t continue booming forever; like Lin, he pointed to the elimination of the 421-A tax abatement as a major drawback to real estate growth. He explained that many projects currently being built were approved under 421-A, and that once they are finished, development will slow down as developers struggle with the cost of land and union labor. Further, he added that the mayor s plan to increase housing by building high and dense will pose problems as developers run out of land. He pointed to Flushing as an example, as developers have been moving away from the developed Main Street. As you geographically expand outside of the commercial hub for Flushing, you re going to run smack into neighborhoods of one and two families, he said. When that happens, you re going to find communities organizing in opposition.

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