Hochul defeats Zeldin. Here’s what it means for real estate

Kathy Hochul (right) and Lee Zeldin (Getty)

Governor Kathy Hochul swore in June that she would go to bat for the real estate industry – now she will have a chance to prove it.

Hochul fended off a challenge from Republican Rep. Lee Zeldin, winning his first full term as governor, according to The Associated Press. She is the first woman to be elected to this position in New York.

Industry players heavily favored Hochul, who looked poised for an easy win until the final weeks of the campaign, when her lead in opinion polls narrowed to single digits.

After taking over from Governor Andrew Cuomo, Hochul introduced a proposal to replace the expired 421a tax relief, a key issue for real estate. But that and a host of other proposals designed to spur housing development have not moved forward. Hochul said she plans to revisit the tax relief and her other housing initiatives next year.

Hochul has had the support of some of the city’s top developers as well as unions that represent workers in the building services and construction trades. Early supporters campaigners included Steve Roth of Vornado Realty Trust, Gary Barnett of Extell Development, Jerry Speyer of Tishman Speyer, Larry Silverstein and Related Companies of Silverstein Properties Stephen Ross, and CEO Jeff Blau.

Developer Don Peebles, who hosted a fundraiser for Hochul in August, previously said The real deal that he wanted to see her “elected in her own right”, noting that he supports candidates “very qualified and who will break down barriers”.

Over the past two weeks, a political action committee linked to Madison Square Garden chairman James Dolan has spent $560,000 on ads promoting Hochul, according to the Times Union. Hochul’s plans for the renovation and expansion of Penn Station, along with the surrounding 18 million square feet of new development, do not require the arena to be moved.

Madison Square Garden’s operating license expires next year and will need to be renewed by the city council. Supporters opposed renewing the permit and advocated moving the arena to create a new entrance to the transit center.

Meanwhile, Zeldin’s tough stance on crime has resonated with some in the industry. Rising crime – or the perception of it – threatens to scare away businesses, tenants and tourists.

In October, Aurora Capital Chairman Jared Epstein, alongside other notable names in the industry, including Haim Chera, hosted a fundraiser for Zeldin. Epstein said he was not guided by political party affiliations, citing his support for Mayor Eric Adams, a moderate Democrat. He said Zeldin’s stance on criminal justice – vowing to oust Manhattan District Attorney Alvin Bragg and change the state’s cashless bail policies – was the “common sense” approach to fight. against crime in the city.

“Bail reform and the anti-police movement has really had a material impact on the life my family and I have here in Manhattan,” he said, noting his wife was afraid to go out alone at night. and that he did not feel comfortable leaving his children outside unsupervised. “With Kathy Hochul, the city will continue to deteriorate.”

Crime in the city has been declining for decades and violent crime remains at historically low levels. But major criminal offenses have increased over the past two years, surpassing pre-pandemic levels, by city and state. Major crimes on the city’s transit system rose 44% between January and September compared to the same period last year, according to a Bloomberg analysis.

Political action committees tied to the Rent Stabilization Association, a homeowners group, poured nearly $90,000 into Zeldin’s campaign. And real estate dynasties, including the Adjmi, Chera and Cayre families, have together donated hundreds of thousands of dollars to the Long Island rep over the past two years.

But Hochul remained the industry’s top pick. Developers argue that building multifamily housing, especially affordable apartments, is financially unfeasible without 421a or a similar incentive. Hochul’s attempt to replace the tax relief in the state budget this year has failed, with lawmakers showing little interest in negotiating the terms of the proposal, dubbed 485w. Zeldin expressed support for the tax relief, but in its initial version.

Progressives came to Hochul amid reports warning him his Zeldin lead was slipping, with the Working Families Party calling an “emergency deck meeting” last week, according to The New York Times. In a statement late Tuesday, Housing Justice for All coordinator Cea Weaver said the uncertainty of Hochul’s victory is a “damning statement about the politics of moderation.”

“Hochul’s willingness to auction off wealthy real estate donors and turn a blind eye to the suffering of ordinary New Yorkers almost cost him this election,” she said.

Hochul has not publicly supported one of Housing Justice for All’s top legislative priorities, eviction for a good cause. The governor said she plans to unveil a plan next year that could create up to a million homes, but it’s not yet clear how that would be accomplished. It is, however, expected to reinvigorate proposals to facilitate office-to-housing conversions and allow the construction of secondary suites in areas zoned for single-family homes. She may also propose a measure that would lift the cap on the residential floor area ratio in the city, which she had previously proposed.

The success of these and other proposals depends on the fate of the Senate and the ability of Democrats to retain their majority and veto power.

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