A fear of the unknown: Learning from the past

The last 2 years has seen unprecedented growth and a substantial come back for our industry. N.Y.C. is the place where "the world" wants to be - whoever currently has the global money - the Chinese, the Russians, the Australians all come here. This has made N.Y.C. somewhat recession proof and driven the positive health of our real estate and construction market. The boom has inspired healthy competition between union and non-union contractors and may ultimately lead to an open shop atmosphere that will benefit everyone. The current political climate and changes spark some apprehension for all industry people. Mandatory inclusionary housing and tax benefits tied to affordable housing models may not substantially affect the luxury development market but will affect the emerging developer and the new market rate project. On the development side the real key to the viability of a project is bulk and if the FAR benefits for an inclusionary project are abated because of the tightening of the rules in regards to the location or accessibility of the affordable units even luxury projects or more high end market rate projects may be deemed not financially feasible. If the rules of location are relaxed and FAR benefits are augmented; 70/30 or even 60/40 may be feasible. The tax benefit tie in may impact market rate rental and condo projects substantially in dulling the "appreciation" benefit realized in regard to decreased operating costs over a certain time period that makes a project viable and ultimately introduces new units to the mix. Let's look at the recent reports on Bloomberg's 10 year Housing Market Place Program where the production goals were achieved. It is clear these programs may need to be tweeked to allow for the proper "mix" and income provision of units. Also let's not empower the unions to a point that the effort of the last few years to make their services more affordable and financially feasible in regard to labor rates, benefit packages and work rules are tossed aside in the means to achieve "political" payback. Let's learn from the last few years, keeping N.Y.C. the place where the world wants to be and realizing that with the diminishing benefits of Wall Street to our local economy the benefits the real estate and construction industry gives via new industry (such as tech) growth continues to remain solid and stable. Let's not throw out the baby with the bathwater in the blind interest of a progressive agenda. Hopefully we will not see the return of the squeegeemen. Jane Webster is VP of compliance for Domani Consulting, Valley Stream, N.Y.