WITH the economy in shambles and both commercial and residential real estate feeling squeezed, the Real Estate Board of New York (REBNY) has a lot on its plate for the coming year. The group is involved with discussions on a number of fronts.
“If I am getting one message from the members it is that there is no credit available for anything,” said Steven Spinola, REBNY president.
REBNY is making its case with banking and legislative leaders in Washington, DC aimed at allowing building owners to continue making payments on loans even after they mature.
“If people don’t have the ability to refinance, the value of the property goes down to zero,” stressed Spinola. “Banks don’t want to lend but they also don’t want the property. Nobody wins in that scenario. The members are not even talking about lending for new projects – this is a national issue that affects rental apartment buildings, office buildings, hotels and shopping centers.”
REBNY is also monitoring discussions that would provide some reductions in union work rules and costs for construction projects.
Property taxes are an issue as the city’s convoluted taxing system causes income from the previous good years to be factored forward into today’s assessed values.
“On the office side, we will be hit with that for the next two years because of the [big] rent rolls,” said Spinola.
“We are talking to the city about having a little more fairness, and it’s complicated and something the city can’t do on its own but needs state legislation.”
Certain apartment buildings are also being assessed using a target of 30 percent of the gross income.
“When the result is 30 percent, something is wrong,” said Spinola. “We’ve always suggested 22 to 23 percent as a fairer number.”
The members are also concerned about the ability of the city and state to reduce spending and payrolls without hurting critical services and raising taxes. “That’s the most important issue,” said Spinola. “What can the city and state afford to spend? And right now we are spending too much money.”
