Other real estate experts are not as negative on NYC's future
There has been no shortage of housing-related headlines since the election and swearing-in of New York City mayor Zohran Mamdani.
His platform for the city has drawn both rabid support and opposition from both local and national politicians. Local real estate experts also have varying views on the mayor’s agenda.
One real estate investor has very strong feelings about Mamdani’s budget and housing plans, and he didn’t mince words when discussing his opposition.
Danny Fishman (pictured top), CEO and co-founder of GAIA Real Estate, believes that the city will be worse off based on Mamdani’s platform.
“They submitted yesterday a $125 billion budget for the city of New York, the city with 8.4 million people,” Fishman told Mortgage Professional America. “As a comparison, Florida’s is $116 billion, so $10 billion less than the city, with 23 million people. Three times more people and $10 billion less. Where's the money going?
“And I think that the essence of the issue is that, basically, he said that he will increase the real estate tax by 9.5%, to finance the budget. My point is, it's always in socialism, it starts with the same thing. It starts with a promise that it will make things better. And it ends up with rich people moving, and everyone is poor.”
‘Landlords will increase the rent’
On Wednesday, Mamdani appointed new members of the rent guidelines board, which could set the stage for proposed rent controls in the city. For those whose rent wouldn’t be frozen, Fishman believes their rent will go up due to the increase in taxes.
“What happens is that the landlord will increase the rent,” Fishman said. “Every landlord, including people who own homes in the Bronx and Brooklyn, will pay more taxes. People who rent will pay higher rent, because everyone will increase the rent. So all New Yorkers are paying much more money every month to subsidize all this inefficiency.”
For buildings that would have rent control, Fishman believes they could end up being abandoned at some point.
“You have in the city one million rent-stabilized, rent-control apartments,” he said. “They are already in pretty bad shape. And the landlords, now they will have another 9.5% tax, but they cannot increase the rent because the rents are stabilized. So basically, that means they'll be bankrupt. People are throwing the keys to the lenders, and buildings will be just abandoned.”
Fishman believes the policies will hurt the city, and it will be the people who remain behind who will suffer. He thinks others will just decide to leave.
“When I moved to New York 16 years ago, it was 9 million people,” he said. “Today it's 8.4 million. And the unions and corruption and red tape and financing all these programs that they're not doing in other places, someone has to pay for that. If you live in New York, you worked from January until July for the government, and from July to December for yourself.
“Why would people stay when he says all these socialist things, like in Venezuela or Cuba. He forgot that there isn’t a fence to keep people from running away in New York. They’ll go to the airport, and they’ll fly to Miami, and that's it. With what he's doing now, all the New Yorkers will suffer.”
Others not as pessimistic
While Fishman is not alone in his pessimism, there are plenty of real estate professionals more optimistic about the future of the city. Two real estate experts spoke with Mortgage Professional America in December about the impact of the mayoral election.
John Walkup, co-founder of UrbanDigs, said elections rarely provide the market shock that some people expect.
“I think elections do matter at the margins, but I think they're rarely that like the catalyst that they're always expected to be, especially when it comes to real estate,” Walkup said. “It generates a lot of talk, and there's a lot of rhetoric that always comes out during election season. Generally, I think real estate reacts more about execution and policies versus that rhetoric.”
Lindsay Barton Barrett, a broker with Douglas Elliman with more than 20 years of experience, has witnessed political changes in the city over the years, and rarely does it change anything in the long run.
“In my view, there was a significant reaction back in the summer when he won the primary, but I think at this point it's already priced in,” she said. “Anyone who wasn't going to buy because of whatever changes might be coming has already made that decision. The incremental difference in taxes just isn't going to drive a critical mass of people out of New York City—it hasn't in the past, and I haven't seen anything change since the election discussions started.
“People love to speculate, but at the end of the day, New York is always going to be New York, and people will always want to live here for all sorts of reasons—the mayoralty isn't changing that."
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