Ken Fisher, CozenO’Connor
The barometer is steady. Unemployment in New York City has reached pre-recession levels, with recovery in the financial sector and growth in tech and hospitality. Crime remains low, and the schools continue to receive attention. Nonetheless, the forecast is cloudy.
Some uncertainty stems from national and international trends. Will interest rates rise? Will New York continue to captivate overseas capital? But policy choices are adding to the angst.
Nationally, political division remains in vogue, although the recent transportation funding bill was welcome. Whether the elections foster comity or comedy is unclear.
One bright note was agreement among New York, New Jersey and U.S. DOT on a path forward for critical Hudson River capacity.
Similarly, after a public spat, the MTA will receive more funds from the City, although the overall capital plan is still short.
Governor Andrew Cuomo has made a priority of major infrastructure projects, particularly a new Tappan Zee Bridge and a rebuilt LaGuardia airport, on their own merits and as symbols of a renewed state.
However, PANYNJ the region’s infrastructure powerhouse, is still in the midst of governance reform and a lengthy search for an executive director, which makes it unlikely to launch major initiatives anytime soon.
In contrast, mayor Bill de Blasio has not identified himself with signature projects, instead committing major appropriations to affordable housing. Resiliency, new schools and underserved parks are some other priorities.
Overall, the New York Building Congress ominously notes that infrastructure spending is reaching 2001 levels, almost 40% below 2008.
Private development continues at an extraordinary rate. But real estate professionals have their antennae up.
Over 100,000 units of new housing will come online in the next three years. Will the market be able to absorb them? Eventually, but likely over a longer period than expected, and possibly with a rebalancing of overheated land prices.
Some of this surge was triggered by the race to vest before implementation of new 421-a residential tax incentive reforms, which effectively disqualify condo development and which require significant affordable housing onsite, as well as the mayor’s initiative to require affordable housing within areas rezoned by the city and through private applications.
Even if the mayor’s calculation that enhanced 421-a benefits and additional zoning density offset the requirements are correct, some developers will be deterred by further government entanglement in their projects and shift into rehabilitation, office, retail and opportunities elsewhere.
Looming over these factors is a requirement included by gov. Cuomo that the Real Estate Board of New York and the building trade unions reach agreement on a wage package for all projects by year-end or the entire law lapses.
As this column is being written, negotiations are underway, but neither side is signaling optimism, even privately. If they succeed, how broadly will the development community embrace the package? If the incentive ends, will the luxury market thrive while modest rentals languish - the opposite of the intent - while union construction continues to decline? Sorting this out are officials struggling to reconcile the need for growth with the impacts that development has on current residents.
Faced with uncertainty, the industry needs to speak up. Engineers and others bring practical experience and clear-eyed analysis to the table. But industry members don’t always have the time to devote to outreach, are wary of controversy, and may simply not know the best way to engage.
Associations like ACEC of New York fill that role. Under the direction of industry leader officers and board members, and with the technical and financial support of hundreds of volunteers, ACEC New York champions best practices, a robust capital program and sustainable growth, to public officials through policy papers, testimony and by supporting candidates who share these values. By acting collectively, members leverage their strengths and take advantage of the organization’s expertise and reputation.
“Hope for the best, but prepare for the worst” is good advice when it comes to the weather, as well as government.
Ken Fisher is an attorney at Cozen O’Connor and a former city council member, New York, N.Y.
Ken Fisher represents ACEC New York Metro Region, but the views expressed are his own.
ACEC New York is a proactive coalition of 280 firms representing every discipline of engineering related to the built environment—civil, structural, mechanical, electrical, environmental, geotechnical—and affiliated companies. Our shared goals are to further the business interests of our membership, enhance the quality and safety of the environment we live and work in, and help ensure the vitality of our communities. For more information, visit www.acecny.org.
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