Borough presidents’ big real estate agendas
A look at the five beeps varying development and land use plans
October 01, 2014
By Claire Moses
From left: Borough Presidents Gale Brewer, Eric Adams, Melinda Katz, James Oddo and Ruben Diaz
Stripped of much of their power when the city Board of Estimate was dissolved in 1990, the city’s five borough presidents seem to play a minor role in city politics these days. But one area where they can still carry significant weight is development.
Perhaps the biggest sway they have on the real estate front is in the so-called ULURP process — the official public review in which they issue an official recommendation on whether or not to approve a project.
They also appoint members to the city’s 59 local community boards and get one appointee each on the City Planning Commission.
And they can play key roles in landmarking and rezoning, plus have a bully pulpit when it comes to advocating for their boroughs.
This month, The Real Deal spoke to the city’s five borough presidents to find out what their development priorities are and which projects will get their attention in the coming years.
Four of the five beeps took office in January, at the same time as Mayor Bill de Blasio. They have varied experience dealing with development matters, from Manhattan Borough President Gale Brewer’s stints with multiple city agencies, to Queens’ Borough President Melinda Katz’s tenure as chair of the City Council’s Land Use Committee, dealing with major rezonings under former Mayor Michael Bloomberg.
And developers often want the beeps on their side. Read on to find out more about each of their real estate priorities.
Manhattan Borough President Gale Brewer has never been shy about ruffling industry feathers. A few years ago, as a member of the City Council, she proposed controversial restrictions on the amount of space new retailers, and specifically banks, could occupy on some of the main drags of the Upper West Side. Much to the dismay of the real estate and business communities, the proposal, which was backed by the Bloomberg administration, went into effect.
Today she’s got other things on her agenda.
For example, Brewer — along with other elected officials, vendors and members of the public — attended weekly public meetings for 11 straight weeks to try to convince the developer of the proposed residential tower in the South Street Seaport Historic District to change the location. Brewer and other opponents argued that the proposed spot for the tower would strongly alter the area’s look and feel.
“We don’t know what will come out of it,” she said, but “that set a good precedent.”
As a result of the new guidelines proposed by Brewer and other elected officials, Howard Hughes Corporation is in the process of revising its proposal, which it will present anew later this fall.
Brewer vowed to follow the same protocol to discuss other big development proposals too, including the rezoning of Midtown East, and eventually the development surrounding Madison Square Garden and Penn Station.
Brewer was also one of several elected officials who came out against Gov. Andrew Cuomo’s plan, which was crafted behind closed doors, to fund the redevelopment of Pier 40 on the West Side through the sale of the air rights to the owner of a nearby industrial building. The de Blasio administration decided the proposal must go through ULURP, which will give Brewer a say.
Affordable housing is another issue on Brewer’s agenda. She thinks the emphasis in Manhattan should be on preserving existing units.
“Manhattan has very little land,” she said, “and that land is expensive.”
The beep has drafted a list of Manhattan buildings, both empty and occupied, that could be used for affordable housing. But there’s one more thing: She doesn’t want those buildings to include a so-called “poor door.”
She plans to push for a change to the rule that currently has developers build separate doors for tenants in affordable units, such as at Extell Development’s 40 Riverside Boulevard and Larry Silverstein’s 1 West End Avenue (see related story).
Until the law can be changed, she said, developers will have to be convinced to use one entrance. “The two-door issue has been a challenge,” she said.
For Brooklyn Borough President Eric Adams, one goal sticks out among the others: creating more affordable and middle-income housing. And if you ask him, Brooklyn is just the place to build it.
To achieve that goal, Adams is hoping to upzone multiple areas in the borough — such as the swath around Broadway Junction on Nostrand Avenue on the border of Bedford-Stuyvesant and East New York, as well as parts of Flatbush — to allow for more residential development.
He also backs de Blasio’s mandatory inclusionary zoning policy that would require developers to include affordable housing in projects that need zoning approvals. Of course, past Brooklyn rezonings — in areas including the now-flourishing Williamsburg and Dumbo — did not include mandatory affordable housing stipulations. Median rents in Dumbo are now higher than those in Manhattan — something Adams would like avoid replicating in newly rezoned parts of the borough.
While Adams is a staunch supporter of de Blasio’s housing policy, he told TRD he’d prefer to see the existing 80-20 market rate-to-affordable housing ratio tweaked by adding a middle-income housing component to the equation. “My ratio,” he said, “is 50-30-20. That’s my goal.” (In that plan, 50 percent of the units would be market-rate, 30 percent middle-income and 20 percent affordable.)
Adams said creating middle-income and affordable housing will not only prevent Brooklynites from being priced out of their borough in the next few years, but will also enable the generation of children growing up there now to raise their own kids there.
Adams is actively talking to religious leaders in the borough, he said, noting that many religious institutions have available air rights or parking lots that could be used for new housing developments. He said those assets could be used strike deals with developers.
Melinda Katz, who during her eight-year stint as a City Council Member chaired the body’s powerful Land Use Committee, has a clear goal when it comes to real estate in her borough.
“We need housing,” she said, “desperately.”
The borough president said she wants development to take place by planning out entire neighborhoods, instead of adding developments piecemeal. And she said Queens especially lacks senior housing.
“Our economy is dependent on our seniors being able to take care of their grandchildren, so their parents can work,” she said.
While she is a big proponent of the mayor’s affordable housing plan, Katz said the current 20-percent mandate will not create enough affordable housing, especially if it involves a large-scale development such as Astoria Cove, where 345 of the approximately 1,700 proposed units would be below market-rate.
“My suggestion is 35 percent,” she said, adding, “I’d probably settle for less.”
In addition to ensuring that residents of Queens stay in the borough, Katz said she also wants to attract young professionals, like those who will graduate from Cornell University’s Roosevelt Island tech campus, which is slated to open in 2017.
The beep — who between political gigs worked at the white-shoe law firm Greenberg Traurig, specializing in land use and government affairs — will also look to revitalize underdeveloped areas of the borough such as parts of the Rockaways, where she would like to see more commercial tenants, and Jamaica.
“We need to have adequate transportation to get investors to [the Rockaways],” Katz said. “We’re only getting the right type of development if we work with the city to create incentives.”
While Brooklyn, Queens, Manhattan and the Bronx largely welcome residential projects that include hundreds of units, that’s not the case on Staten Island.
The city’s smallest borough is a “bedroom community,” according to Borough President James Oddo, the only Republican out of the five beeps. “Folks want to keep it that way.”
Yet, Staten Island has something the other boroughs lack: land.
In the nine months since he moved into Borough Hall, Oddo said many developers and investors have come through his door for meetings. For a good number, it’s the first time they’ve ventured to the island.
“The price point in other boroughs has increased,” Oddo said. “So they look to Staten Island as their last resort. Now they’re fascinated by it, and are finally paying attention.”
Oddo said he welcomes sensible commercial development, particularly the effort to bring technology companies to the island’s North Shore, something the mayor also supports. Relatively affordable office space, combined with well-developed high-speed Internet infrastructure, could make the area attractive for tech firms, Oddo said.
As far as residential development goes, Oddo said, “you have to be very intelligent as to where it goes and where it fits.”
Through ULURP Oddo said he tries to exert his influence to prevent unwanted development.
But it doesn’t always work. For instance, he joined the vehement opposition to the Savo Brothers’ purchase and redevelopment of the former Mount Manresa Jesuit Retreat House in the Fort Wadsworth section of the borough. The 15-acre site will soon see 300 townhouses “that nobody wants,” Oddo said. “There are moments when we have no leverage.”
Yet while Oddo is against the addition of tall, large-scale residential developments, he does not object to the $150 million project Ironstate Development is building along the Stapleton waterfront. The first phase of the project, dubbed URL Staten Island, will include 571 apartments.
That’s one of four major projects underway on the island’s North Shore, including three near the Staten Island Ferry. The others are the largest Ferris wheel in the Western Hemisphere; an outlet shopping mall, and Lighthouse Point, a mixed-use waterfront development with retail, hotel and residential components. Oddo said he’s hopeful that the new developments will lure visitors off the ferry to spend time on Staten Island.
Another issue the borough must face, Oddo said, is creating more resilient housing stock, especially on the East Shore, which was heavily damaged by Superstorm Sandy.
Borough President Ruben Diaz, who took office after winning a special election in April 2009, knows what he wants to see happen in the Bronx. He envisions the borough’s waterfront being developed much like the other boroughs’.
But first, Diaz is looking forward to the Metropolitan Transportation Authority’s plan to add four new Metro North stations in the borough, which will cost roughly $800 million to build.
The stations, he believes, could transform the neighborhoods of Hunts Point, Morris Park, Parkchester/Van Nest and Co-op City, as well as attract nearby residential and commercial developments, by significantly improving the connections between the Bronx and Manhattan, as well as between the borough and Connecticut. The Connecticut transportation improvement would make it easier for Bronx residents to travel north to work.
The Bronx is also anticipating several major developments in the coming years. They include Young Woo’s transformation of the General Post Office in Mott Haven into a marketplace; Donald Trump’s Ferry Point Park golf course in Ferry Point; FreshDirect’s planned move to the Harlem River Yard, and the Kingsbridge National Ice Center in Kingsbridge.
The borough has also seen an uptick in hotel development, both large ones and boutiques, which will add hundreds of rooms to the borough.
“I welcome hotels,” Diaz said, “I do not welcome motels.” The beep added that, rather than so-called “hot sheet motels,” he would like to see the addition of flagship hotels, especially surrounding Yankee Stadium in the borough’s Highbridge section. Another good place for them, he added, would be in the Fordham area, close to large institutions such as the university, the New York Botanical Gardens and the Bronx Zoo.
Diaz stressed the importance of considering community input in these and future projects, and said ensuring that they provide jobs to Bronx residents is crucial.
“We know what happened in Harlem; we have seen what happened in Downtown Brooklyn, and the good that came out of it,” Diaz said, referring to the resurgence of those neighborhoods. But in both areas, the gains meant longtime residents could no longer afford to live there. “We also examined where they could have done a better job with the local community.”
Because there can never be enough data to explain New York City’s real estate market, Crain’s has come up with a slew of interactive charts and graphs that encapsulate the crazy-booming-upwards situation right now. Above, one of the most important takeaways: in the second quarter of this year, the median purchase price in Manhattan topped its 2008 peak. It’s almost $1.7 million. The graphic also shows how bigger homes (four-bedrooms, the top line) are really pushing up that median price.
Above, the logical result of such escalating property prices: more buildings are on their way to, well, getting built. The chart above, explained: “The city issued more than 96,000 building permits in 2013, a 7.6% jump from 2012. Manhattan had 51% of them, but mostly for renovations. Only 5% of the island’s permits were for new buildings; Queens’ 593 permits for new construction topped all boroughs.” Hey, Queens, a lot of supply is coming your way. It remains to be seen whether the new construction will bring down the high prices, but that’s what the laws of supply and demand would mandate.
HOME APPRAISAL RESOURCES
10 Questions you should ask when hiring a Home Appraiser.
Qualify the appraiser before there is a problem, not after.
Article by Richard Hagar SRA and P. E Turner Jr. SRA/SRPA
The old saying “An ounce of prevention is worth a pound of cure” is true when hiring an appraiser. Many of the “appraisal” issues we are hearing today relate to the quality of the appraiser hired for the job.
Have you experienced an “appraisal failure”?
Allow us to provide you with some insight and twelve simple questions that will help you avoid the next failure.
From our point of view, the largest banks don’t appear to be hiring the best and brightest appraisers, they appear to be hiring based on fast and cheap. The “cheapest” appraisers often do not have adequate knowledge or experience and as a result, produce poor quality appraisals that harm everyone. We have seen appraisers traveling 150 miles from their office to your home then spend 15 minutes walking around before disappearing. Their reports often “kill the deal” which is why you are likely reading this article.
In our experience, appraisers traveling 150 miles from their office is an indicator that the appraiser is likely not geographically competent. This appraiser likely does not have access to the proper MLS, a necessary tool for producing a valid appraisal. An appraiser traveling great distances isn’t the only issue, it’s simply an indicator of area knowledge and competency. (In our experience — excluding appraisals of VERY unusual properties — the odds of a competent, knowledgeable appraiser knowing any market area, diminishes with distance from their office). Hiring competent appraisers is in everybody’s interest. Federal and state laws clearly indicate that no one may attempt to influence the appraiser – NO ONE! So how do you increase the odds of a competent appraiser producing a good appraisal without crossing the line?
Qualify the bank and who they hire.
Lenders and their subsidiary appraisal management companies (AMC) should hire qualified appraisers, not the cheapest. Borrowers and real estate agents should ask lenders about their process for hiring an appraiser. If you ask the questions up front, it can’t be considered influencing the appraiser, it’s due diligence on the bank. It’s likely that a bank that hires the cheapest and fastest will have numerous other internal failures that will impact your loan and interest rate. (Mortgage brokers – you have a fiduciary relationship with your client. Are you helping them understand the ramifications of a bad lender?)
If the bank loan officer can’t answer the basic questions below, could this indicate a lack of knowledge and experience by the bank? If for some reason you are forced to use a particular bank, then perform the next step.
Pre-screen the appraiser.
Borrowers and real estate agents should pre-screen the appraiser BEFORE allowing the appraiser access to the property. Again, this isn’t an attempt to influence the appraiser, it’s an attempt to obtain the services of a competent appraiser. Borrowers and real estate agents should ask the appraiser questions about their area knowledge and experience as a method of screening for competency.
We have prepared a list of questions that banks, borrowers or real estate agents should ask the appraiser before hiring or allowing them into a borrowers home. There are always exceptions to every rule, however these questions should help you weed out the fast and cheap, geographically incompetent appraisers before they mess up your loan or sale.
These questions are neither insulting nor intimidating. They are strictly to benefit the owner, seller, real estate agent, lender or, borrower, and ensure that they will receive an appraisal commensurate with the fees paid.
10 questions and the reasons for asking
#1 What is your name and telephone number?
Simple, straightforward and you’ll need to write this down for future reference.
Why? We have examples where the assigned appraiser sends an inexperienced, non-licensed person to inspect a property.
Why would they do that?
The appraisal company maybe cutting corners.
Since you, or your clients, are paying a fee for this service, make sure you get the best which increases your chances for a good appraisal.
#2 What is your license (or certification) number?
This question can be intimidating to an appraiser who is beginning to realize you are serious about the appraiser’s qualifications. If they don’t know the answer, maybe they are not certified. Warning flag that should trigger more questions.
#3 Where is your office located?
You are trying to get a sense for the appraiser’s experience in your area; In the appraisal world this is called “geographic competency.”
We often find that the appraisers who are providing bad appraisals do not understand your corner of the world.
So if their office is distant, start asking the appraiser questions about your general neighborhood. Ask until you feel comfortable with the appraisers knowledge about your area.
Our company, American Home Appraisals, stays focused on three counties, however we will go further but only when it involves complex properties that others can not appraise.
#4 Do you work out of your home or a professional office?
If they work out of their house, it’s an indicator of a one-man operation. We find appraisers that work out of a professional office share experiences, knowledge and methods.
Appraisers that work as professionals produce a higher quality product.
After all that is what is expected and required in federal law. A one person office isn’t a deal killer, but you should ask questions until you feel comfortable with their knowledge.
#5 How long have you been appraising?
We recommend a minimum of 5 years of experience for simple properties and 10 years for complex and unusual homes, waterfront, large acreage or view properties.
#6 Have you ever been disciplined before?
If the appraiser has been disciplined you likely have an indicator that the appraiser cuts corners, or worse.
#7 Are you a full time appraiser?
Appraising is complex and requires focus.
Part time “form-fillers” are of no benefit to you, the borrower, real estate agent or lender.
If the person is part-time, ask the lender to send someone else.
#8 Are you licensed or certified?
There are 2 categories of residential appraisal licenses (Certified and Licensed).
A licensed appraiser is the lowest level of authorization by a state. Typically these individuals are not allowed to appraise expensive or complex properties for lending purposes.
A certified appraiser is the highest level of authorization by a state. Certified appraisers are allowed to appraise any residential property, in any price range, of any size and complexity.
Appraisers that are only licensed, typically are not credentialed to do “complex appraisal assignments” for loan purposes.
FHA does not accept appraisals from “licensed” individuals, only “certified” appraisers.
Now in some areas, like NW Arizona, the best appraiser in the area happens to be “licensed” and in other areas a licensed appraiser may be your only choice.
So again, ask questions until you feel comfortable with the appraiser’s ability.
#9 Have you ever appraised properties of this type in this area?
An experienced appraiser would answer yes.
If the answer is no, start asking a lot more questions.
#10 Are you a member of the local multiple listing system (MLS)?
This is critical! The MLS is a database of the homes that are listed and sold in your area.
MLS’ are local, there is no nationwide system.
So good appraisers have access to the local MLS for your area. Appraisers that do not have access are either incompetent or from distant areas.
For instance the MLS in Seattle is different from the MLS in Wenatchee. The MLS in Sedona is different than the one in Phoenix. Ask the appraiser if they have their own private access to the local MLS.
If they don’t have local access – yell for another appraiser and do not allow this one into your home!
Properly trained appraisers, geographically competent with your neighborhood, experienced and, capable of appraising complex properties is what you should demand. Remember that quality costs a bit more and someone skimming off a portion of the fee can reduce quality and may be the reason for the “appraisal problems” you’ve been hearing about.