THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 TABLE OF CONTENTS

TABLE OF CONTENTS

Introduction ...... 3

Awards ...... 4

Events ...... 10

Brokerage Committees . . . . . 12

Education ...... 13

Member Services ...... 14

Philanthropic Activity ...... 18

New York City Issues ...... 19

New York State Issues . . . . .28

Federal Issues ...... 31

General REBNY Info ...... 33

2 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 INTRODUCTION

YEAR IN REVIEW

In 2014, New York City’s future only developments at Domino in Brooklyn became brighter . As a result, it was and TF Cornerstone’s project on the another good year for real estate . Upper West Side .

Crime continued to New Yorkers were able to explore the drop and job growth spectacular openings of various newly continued upward, completed projects like, One World reaching historic lows Trade Center, the fully restored High and highs respectively . Line and the Fulton Center Transit Hub, Manhattan, Brooklyn, to name just a few . Over the summer of the Bronx, Queens and 2014, for the first time ever, Governor’s fund other vital city services like parks Staten Island continue Island remained open seven days per and libraries . to attract people from week, where visitors enjoyed a brand around the world .new 30-acre park on the island’s The real estate industry employs Whether young people, seniors, empty southern end . approximately 519,000 people who nesters or immigrants, everyone wants earn an average salary of more than to be in New York City . There is a great Real estate generates a great deal $60,000 per year . These are well- deal of interest from investors, both of new jobs and revenue for the city, paying middle-class jobs that come domestic and foreign . Major projects and 2014 was an exciting year . In the with health insurance, paid vacations are moving forward in Hudson Yards spring, REBNY issued a report that and retirement savings plans . We want and Lower Manhattan, along with revealed New York City’s real estate more jobs like these in our city . significant growth in the boroughs, industry generates $15 4. billion in taxes whether it’s Long Island City, Downtown annually, which represents 38 percent New York has always been a city of Brooklyn, the St . George section of of the city’s tax revenue . Revenue- change and renewal . We need to Staten Island, the Bronx, you name generating properties provided enough ensure New York City keeps growing it . It’s happening throughout all five tax revenue to pay the city’s entire and continues to rebuild itself, whether boroughs . share of $13 1. billion in payroll expenses through new developments like on the for teachers, police officers, fire fighters, West Side or ambitiously rebuilding, REBNY forged strong working sanitation workers and correction like in Lower Manhattan, where we are relationships with the newly elected officers and still have $2 3. billion left to putting back up what was destroyed by leaders of local government . Mayor 9/11 . All of these plans and projects de Blasio unveiled an ambitious 10- generate more revenue for New year plan to create and preserve York City and help it become a 200,000 units of affordable better place to live, work and raise housing . The City Council signed off a family . on exciting new affordable housing

STEVEN SPINOLA ROB SPEYER REBNY President REBNY Chairman

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 3 TABLEAWARDS OF CONTENTS

AWARDS

REBNY is immensely proud of praise the leadership, experience, makes it a point to encourage them its members, and takes several abilities and tremendous contributions to serve our city to the best of their opportunities each year to recognize of the talented owners, developers, abilities, and REBNY takes pride in those members for the incredible managers and brokers who excel in rewarding them when they do . At our contributions that they make to our industry . Ceremonies such as the Annual Banquet, the Louis Smadbeck improving and advancing New York City Deal of the Year Awards are hailed as Memorial Broker Recognition Award, every day . REBNY’s numerous awards the most exciting events for residential Bernard H . Mendik Lifetime Leadership are widely regarded as the highest and commercial brokers, and recognize in Real Estate Award, Harry B . Helmsley honors attainable in New York City real REBNY members with exceptional deal- Distinguished New Yorker Award, estate, and by receiving one, award making skills, while other events such as Kenneth R . Gerrety Humanitarian Award winners join the ranks of the titans of the Ingenious Deal of the Year Awards and Henry Foster Award will be awarded industry who came before them, and focus more on creative and imaginative to those distinguished individuals who gain recognition for their efforts . problem-solving . have made significant contributions to the real estate community and New The awards presented to our members Regardless of what branches of real York City as a whole . throughout the year acknowledge and estate our members work in, REBNY

REBNY 118TH BANQUET

REBNY 118TH BANQUET AWARD WINNERS Photo: Steve Friedman

(L-R) Ken Fisher, Fisher Brothers (Harry B. Helmsley Distinguished New Yorker Award); Robin Abrams, The Lansco Corporation (Louis Smadbeck Broker Recognition Award); Stephen L. Green, SL Green Realty Corp. (Bernard H. Mendik Lifetime Leadership Award); Thomas L. Hill, Boston Properties (George Brooker Management Executive Award); Robert Fink, The Winter Organization (Young Real Estate Man of the Year Award); Joel Picket, Gotham Organization (Kenneth R. Gerrety Humanitarian Award)

4 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 INTRODUCTIONAWARDS

REBNY 118TH BANQUET (CONTINUED)

Photo: Steve Friedman Photo: Steve Friedman

(L-R) Steven Spinola, REBNY; Catharine Young, State Senator; (L-R) Steven Spinola, REBNY; Rob Speyer, Tishman Speyer; Melissa Mark-Viverito, Council Speaker Governor Andrew Cuomo

Photo: Steve Friedman Photo: Steve Friedman

(L-R) Bill Rudin, Rudin Management; Governor Andrew Cuomo; Stephen (L-R) Mayor ; Ken Fisher, Fisher Green, SL Green Realty Corp. (Bernard H. Mendik Lifetime Leadership Brothers (Harry B. Helmsley Distinguished New Award); Rob Speyer, Tishman Speyer Yorker Award); Crystal Fisher

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 5 TABLEAWARDS OF CONTENTS

REBNY 118TH BANQUET (CONTINUED)

Photo: Steve Friedman Photo: Steve Friedman

(L-R) Gale Brewer, Manhattan Borough President; Joseph Bruno, (L-R) , NYC First Deputy Mayor; Martin Commissioner, NYC Office of Emergency Management; Thomas Hill, Golden, State Senator; David Greenbaum, Vornado Boston Properties (George Brooker Management Executive Award); Realty Trust Michael Norton, Tishman Speyer

Photo: Steve Friedman

(L-R) Jeffrey Levine, Douglaston Development; Photo: Steve Friedman RuthAnne Visnauskas, Commissioner, NYC Department of Housing Preservation and Development; Hal Fetner, (L-R) Rob Speyer, Tishman Speyer; Anthony Shorris, NYC First Durst Fetner Residential Deputy Mayor; Congresswoman Carolyn Maloney; Burt Resnick, Jack Resnick & Sons

Photo: Steve Friedman

Photo: Steve Friedman (L-R) Jimmy Van Bramer, Council Member 26th District Queens; David Greenbaum, Vornado Realty Trust; (L-R) Eric L. Adams, Brooklyn Borough President; Donald Zucker, Thomas Elghanayan, TF Cornerstone; Diane Ramirez, Donald Zucker Company; , NYC Fire Commissioner Halstead Property

6 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 INTRODUCTIONAWARDS

REBNY 118TH BANQUET (CONTINUED)

Photo: Steve Friedman Photo: Steve Friedman

(L-R) Robert Rodriguez, State Assemblyman; Congresswoman (L-R) Joel Picket (Kenneth R. Gerrety Humanitarian Award), Carolyn Maloney; Mary Ann Tighe, CBRE; Jim Whelan, REBNY; Matt Picket, David Picket; Gotham Organization Daniel Garodnick, Council Member 4th District Manhattan

RESIDENTIAL BROKERAGE AWARD WINNERS

RESIDENTIAL DEAL OF THE YEAR AWARD WINNERS Photo: Gotham Photo Company Photo: Gotham Photo Company

(L-R) Timothy Melzer, Winner of the 3rd Prize Sales Award, The Corcoran (L-R) Steven Spinola, REBNY; Reba Miller, RP Group; Linda Guido, Rental Award Winner, Halstead Property LLC; Co-Broker: Miller Realty Group Inc. (not pictured) Anna (Justice) Filippova, Rental Award Winner, Spire Group Inc.; Reba Miller, Winner of the Henry Forster Award, RP Miller Realty Group Inc.; Sharon Burroughs, Winner of the 1st Prize Sales Award, Douglas Elliman Real Estate; Shelley Lindauer, Winner of the 2nd Prize Sales Award, Keller Williams (accepted by Keller Williams representative, pictured). Not pictured: Antony Bitar, Winner of Most Promising Rookie of the Year, AC Lawrence Real Estate LLC

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 7 TABLEAWARDS OF CONTENTS

COMMERCIAL BROKERAGE AWARD WINNERS

MOST PROMISING ROOKIE OF THE YEAR AWARD

(L-R) Andrew Levin, Boston Properties; Ira Fishman, EVO Real Estate Group; Brian Ezratty, Eastern Consolidated; Eric Michael Anton, Brookfield Financial Real Estate Group NY, LLC; William Montana, Savills Studley; Jason Greenstone, Cushman & Wakefield; James Caseley, ABS Partners Real Estate; Joseph Grotto, Jr., Cassidy Turley; Joanne Podell, Cushman & Wakefield; Robert Nager, Rob Nager LLC

RETAIL DEAL OF THE YEAR AWARD MOST INGENIOUS DEAL OF THE YEAR AWARD

(L-R) Thomas Bow, The Durst Organization; Peter Braus, Lee (L-R) Gregory Tosko, Mary Ann Tighe, David A. Green, M. Myers & Associates; Richard Hodos, CBRE; Peter Ripka, Ripco Real Mermel, Caroline McLain, CBRE Estate; Robert Nager, Rob Nager LLC; Bradley Kaufman, Pryor Cashman LLP

8 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 INTRODUCTIONAWARDS

MANAGEMENT AWARD WINNERS

COMMERCIAL MANAGEMENT LEADERSHIP BREAKFAST

(Top Row, L-R): Carl Lettich, Silverstein Properties, Inc. (On-Site Manager of the Year Award); Gaston Silva, Vornado Realty Trust; Leslie Madhoo, Paramount Group Inc. (Security Professional of the Year); Arpiné Aroyan, Cushman & Wakefield (Portfolio Manager of the Year Award); Michael Norton, Tishman Speyer; Kuba Brown, Local 94; Howard Styles, Local 94; Robert Haker, Vornado Realty Trust (Engineer – Large Building of the Year); Steven Spinola, REBNY; (Bottom Row, L-R): Cynthia Boyea, Paramount Group Inc. (John M. Griffin Community Service Award); Jose Antonio Bonilla, TEMCO Services (Porter of the Year); Matt Zash, Hines (Rising Star of the Year); Frank Freda, Cushman & Wakefield; Marco Camargo, Boston Properties (Engineer – Small Building of the Year); Councilmember David Greenfield; Patrick Lynch, Paramount Group Inc.; Steve Griffith, Paramount Group Inc.

RESIDENTIAL MANAGEMENT LEADERSHIP BREAKFAST

(L-R) Bruce C. Ratner, Forest City Ratner Companies; Dorothy Vermeer, H.J. Kalikow & Co., LLC (Residential Management Executive of the Year Award); Eva Talel, Stroock & Stroock & Lavan LLP; Michael Wolfe, Midboro Management, Inc.

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 9 EVENTS

EVENTS

Through 2014, REBNY continued to offer Our Commercial Crossfire event this This year also marked the REBNY the real estate community a series of year, sponsored by the Commercial Membership Committee’s first “Shark classes, seminars and lectures designed Board of Directors, is just one of several Night: A Round Table Event”, sponsored to give attendees an inside look into the events which bring together top players by Citibank . Following opening remarks methods and secrets of some of our in our industry to discuss important by Joseph Barbaccia, co-chair of industry’s top performers . These events issues, mentorships and factors REBNY’s Membership Committee, included networking opportunities, affecting today’s market . This year, participants spent 15 minutes at seven panel discussions and more, and were Commercial Crossfire met in March to different tables, each addressing topics all made possible through the hard work discuss the details surrounding making a ranging from competing with all-cash of our many committees, staff members restaurant deal in New York, and again in offers to working with foreign buyers . and participating members . 2014 proved November to analyze a newly proposed to be yet another premier year for our international measurement standard for events, which continue to attract larger building spaces and how that may affect audiences and present more valuable the market going forward . information than ever before .

WASHINGTON HEIGHTS & INWOOD OPEN HOUSE

This year, REBNY’s Upper Manhattan Committee hosted its first Open House Expo in Washington Heights and Inwood . Held in September, potential buyers and renters were given the opportunity to tour several exclusive co-op, condo, townhouse and high-end rental listings, and learn about the vibrancy of the Upper Manhattan scene from uptown residential brokers . Attendees were given a neighborhood guide, information about expo participants, and were able to network with other buyers before exploring the exclusive offerings, which included both affordable housing and market rate options .

Photo: The Marino Organization Photo: The Marino Organization (L-R) Bruce Robertson, The Corcoran Group; Jeanne Oliver- Taylor, REBNY; DeAnna Rieber, Halstead Property Gale Brewer, Manhattan Borough President

10 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 EVENTS

MEMBERS’ LUNCHEON COMMERCIAL BROKERAGE HOLIDAY LUNCHEON

(L-R) Michael Laginestra, CBRE; Kevin Wang, KRW Realty (L-R) Steven Spinola, REBNY; , Director of NYC Advisors; Diane Ramirez, Halstead Property; Joanne Podell, Department of City Planning & Chairman of NYC Planning Cushman & Wakefield; David Falk, Newmark Grubb Knight Commission, Bill Montana, Savills Studley Frank

RESIDENTIAL BROKERAGE SECRETS OF TOP BROKERS COMMERCIAL “CROSSFIRE” AND INDUSTRY LEADERS SEMINAR

(L-R) Ben Breslau, Jones Lang LaSalle; Tom Houlihan, Gensler; (L-R) Aroza Sanjana, Warren Lewis Sotheby’s International Brian Schwagerl, NBC; Marcus Rayner, Cresa New York; Realty; Toni Haber, Douglas Elliman; Deanna Kory, The John Wheeler, Jones Lang LaSalle; Richard Reese, LaSalle Corcoran Group; Corinne Pulitzer, Douglas Elliman; Jay Investment Management Glazer, Warburg Realty Partnership; Douglas Wagner, Bond NY Properties LLC; Joseph Barbaccia, Essential New York Real Estate

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 11 BROKERAGE COMMITTEES

BROKERAGE COMMITTEES

2014 saw REBNY’s brokerage committees grow even greater in number, reach and scope, including our new Queens Residential Committee and the Brooklyn Commercial Committee . Our more than 40 committees host several events throughout the year that discuss specific aspects of brokerage within New York City, and as more committees are created, the more in-depth each meeting becomes . REBNY is incredibly proud of the passion its brokerage members continue to show year over year for issues in the real estate industry and their willingness to gather together to discuss them . The sheer diversity and volume of its committees COMMERCIAL BROKERAGE SEMINAR “NO SLEEP ‘TIL BROOKLYN” is a clear indication of that commitment . This diversity and level of participation (L-R) Sacha Zarba, CBRE; Christopher Havens, aptsandlofts.com; Asher Abehsera, LIVWRK; Andrew Levin, Boston Properties; Michael Phillips, Jamestown Properties; across multiple fields generates a Ronnie Ragoff, Shorenstein Properties; Patrick Nelson, WeWork huge potential for the exchange of knowledge at committee meetings, networking events and educational gatherings for REBNY’s members .

BROOKLYN COMMERCIAL COMMITTEE RESIDENTIAL BROKERAGE QUEENS COMMITTEE

(L-R) Mitzi Flexer, Massey Knakal; Adam Ecker, Massey Knakal; (L-R) Patricia Dunphy, Rockrose Development Corp.; John Eileen Spinola, REBNY; Betty Castro, Massey Knakal D. Young, Director – Queens Office, NYC Department of City Planning; Jodi Nath, Argo Residential

12 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 EDUCATION

EDUCATION

REBNY offers numerous continuing specifically for commercial brokers Top Brokers, Breakfast Club, Crossfire education classes, lectures and seeking to raise their own level of programs and others, once again seminars every year, and 2014 was no professionalism and leadership offered. agents the opportunity to exception . We held over 90 on-site This exciting new program was learn from leaders in their fields about courses, including over 60 continuing spearheaded by REBNY’s Commercial the best practices, trends and ways education and license qualifying Board of Directors, and raised the bar to improve their business . Among the courses that benefit thousands of on expected standards for industry topics covered this year were overviews industry professionals . members and individuals who represent of Brooklyn and Queens, two markets REBNY . which have proven to be at the forefront In September, we announced the of New York City’s growing real estate launch of New York Commercial The Seminar Committee, which hosts market . Professional, a curriculum designed our Sales Agent Boot Camp, Secrets of

BREAKFAST CLUB: “HONEST DISCLOSURE: THE FINESSE SALES AGENT BOOT CAMP: BROOKLYN OVERVIEW OF A DEAL” (L-R) Ban Leow, Halstead Property; David Maundrell, (L-R) Amanda Young, Brown Harris Stevens; Eileen Spinola, aptsandlofts.com; Jean Austin, Brooklyn Bridge Realty Ltd.; REBNY; Anne Sullivan Young, Brown Harris Stevens Doug Bowen, CORE Group Marketing; Barbara Brown-Allen, Douglas Elliman

SALES AGENT BOOT CAMP

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 13 MEMBER SERVICES

MEMBER SERVICES

BENEFITS REWARDS PROGRAM The REBNY Benefits Rewards program was established to offer members quality services from vendors at discounted prices . Every year, REBNY adds to its roster of participating vendors to present our members with even more opportunities to benefit from our organization . Every January, we gather these vendors together in one place for our Annual REBNY Benefits Fair, which is a veritable one-stop shopping event for our members . 2014 marked our 10th Annual Benefits Fair, and we look forward to seeing even more participants and vendors in 2015 .

VIDEO — SUSTAINABILITY

This year, REBNY put together a video highlighting the issue of sustainability — an issue which the real estate community has been crucial in addressing . The video provided details regarding PlaNYC, a blueprint for New York City which aims to reduce greenhouse emissions citywide by 2030 . Since its inception, these emissions have gone down 15% in our city, largely due to the continuing efforts of our industry . The video also addressed other questions our industry faces each day as we move towards our goal of a greener city . Making our city more sustainable presents many challenges, and REBNY is determined to help New York City, the sustainability capital of the world, succeed .

14 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 MEMBER SERVICES

LEGAL LINE Calls Per Month For eight years, REBNY Broker Counsel 250 Neil B . Garfinkel, Esq ., has been providing

REBNY members with Legal Line, a 200 weekly newsletter which highlights a legal issue pertaining to our industry 150 today and gives an in-depth and concise explanation of it . Today, Legal Line is 100 among the most valuable services REBNY offers its members, and Mr . Garfinkel has 50 been an indispensable resource to any 0 member in need of the acquisition and/or

May June July verification of legal information . He also March April January August February October regularly assists in interpreting issues September November regarding current events in today’s real 2013 2014 estate world, such as whether short-term apartment rental apps like Airbnb are in violation of the Multiple Dwelling Law . of 130 per month . This continued leases, reverse mortgages, drones, cease communication between REBNY and desist zones, Do-Not- Email and Do- counsel and its members has created a Not-Call rules, Yellowstone Injunctions, collaborative forum, fostering a dialogue landmarked properties and document on longstanding issues involving real retention rules for brokers . estate ethics, the law of agency, RLS requirements, advertising, licensing and REBNY: HOW TO SERIES fair housing . REBNY is proud to announce our REBNY: How To Series, a new YouTube REBNY counsel continued to issue the feature designed to promote the very popular Legal Line Question of the continuing education and professional Week, a weekly e-newsletter distributed development of industry professionals . to REBNY members . The Question Each video in the series features a tip, of the Week addresses a variety of useful experience, advice or data to residential and commercial topics, help foster success in the real estate This year, Legal Line averaged 177 including warranty of habitability issues, industry . Each video in the series will phone calls and emails per month, a 36% notarization of documents outside the provide helpful hints from REBNY increase from last year’s average United States, “burn down” provisions in members for both residential and

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 15 MEMBER SERVICES

commercial real estate professionals . includes not only sales information on Each vignette will engage viewers on every neighborhood in New York City, topics they can explore in greater depth but also an in-depth analysis of what at the many seminars and courses we the numbers mean going forward . offer . This comprehensive report analyzes what the sales market looks like for The series launched on November all property types (including coops, 11th with “How to Practice Your Pitch”, condos and single family homes), in all presented by Diane Ramirez, CEO five boroughs, and gives readers an of Halstead Property . The REBNY: unparalleled view of New York City’s How To Series is released bi-monthly, housing market ­— a perspective which and previous videos can be found on can make a world of difference in an YouTube, REBNY com. or Real Estate industry where knowledge is power . Weekly’s website . We also continued to produce our REBNY MARKETING CAMPAIGN is yet another way to identify yourself Broker Confidence Index, modeled In 2014, REBNY’s membership reached as a prestigious member of REBNY . after the popular and informative US a record high of 16,000 . In recognition Consumer Confidence Index . This of this monumental achievement, we REPORTS index is a measure of our Residential have officially launched a new REBNY In order to continue providing up-to-date and Commercial Brokerage Divisions’ marketing campaign on CBS Radio information on the latest market trends members’ confidence in the current New York broadcast and digital media and conditions, REBNY continued market and the market in the coming properties . We did this not only to issuing reports throughout 2014 . We months, with an additional section for increase the public’s awareness of our remain the only organization to produce participants to provide comments . By organization, but also to make sure that a citywide residential sales report, which New Yorkers understand that working with a REBNY agent means working

with an agent who has received Average Manhattan Retail Asking Rents

top training, has access to the best $160

resources, and can be trusted to offer $149 $150

highly skilled assistance in every real $139 $140 estate transaction . This radio ad can $129 $130 be heard on 1010 WINS, CBS-AM News $130 $118 $118 $120 $117 $116 Radio 880, and Fresh 102 7. . $115 $115 $114 $113 $112 $111 $110 $108 $106 $107 $110 Additionally, REBNY launched a digital $103 $102 $100 $97 media campaign on the CBS’s NY Foot Square Per website, www cbsnewyork. com,. which $90

will feature streaming radio spots $80 targeting New York City residents $70 and businesses . Members can log in $60 to REBNY com. to download our sonic logo for use in their outgoing voicemail

messages or ringtones . This sonic logo Source: REBNY Retail Report

16 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 MEMBER SERVICES

conducting our surveys in this manner, Total NYC Residential Home Sales and Consideration ($Millions) REBNY is able to access a vast amount $14,000 25,000 of information from our members who have direct and unique knowledge $12,000 20,000 of the real estate market, analyze $10,000 it, and present it in a concise and understandable format for the rest of 15,000 $8,000 the industry to use .

(Millions) (Millions) $6,000 Our semi-annual Manhattan retail report 10,000 is yet another report which has been well-received by brokers, tenants, $4,000 owners and the media . In New York 5,000 $2,000 City this report has proven to be an invaluable asset to those needing $0 0 information on its vibrant and vital retail market . Consideration (Left Axis) Number of Sales (Right Axis)

REBNY also provides the industry with unique reports, such as our in-depth study of the real estate industry’s incredibly beneficial effects on the city’s REBNY BROKER CONFIDENCE INDEX economy, “The Invisible Engine: The Economic Impact of New York City’s Real • The Confidence Index has a range of zero to 10 . Estate Industry”, which concluded that • An index above five indicates that brokers are confident in the market; our industry creates enough revenue more brokers responded positive than negative to the survey questions . to pay the city’s entire share of salaries • An index below five indicates that brokers are not confident in the market; for teachers, police officers, fire fighters, more brokers responded negative than positive to the survey questions . sanitation workers and corrections • An index of five indicates that the positive and negative responses were equal . officers, with more left over to fully fund numerous city agencies . REBNY also Residential Broker Commercial Broker issued “Housing Production in NYC 1010 9.6 9.4 9.4 Landmarked Properties”, a study which 9 9.18 2 9.3 9 9.0 9 5 8 8.71 8 8.8 highlighted the effects of landmarking 8.52 88 1111 8.33 8.3 8.23 on new housing production, particularly 1 77 the creation of affordable units . 66

All of these, in conjunction with other 55 regular services such as our bi-monthly 44 Numbers You Need to Know emails, 33 ensure that our members and the

eg ative 22 industry as a whole always remain in N the know . 11 00 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2Q2014 2014 3Q 3Q2014 2014

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 17 PHILANTHROPIC ACTIVITY

PHILANTHROPIC ACTIVITY

With the help of its members, REBNY strength of our members in the fight members a chance to spend the continued its mission of serving against food poverty in our city . day playing both with and against New York City by raising resources professional tennis champions . The and funds for several groups and REBNY and the Residential Sales proceeds from the REBNY Pro-Am charities . In 2014, the Residential Deal Council were proud sponsors of the went to the Gift of Life Bone Marrow of the Year Gala raised over $100,000 REBNY Rascals this year, a participating Foundation in honor of our friend and after expenses for the Members in team in the Harlem Little League . The colleague Wendy Siegel, who, through Need Fund, dedicated to providing Harlem Little League is an all-volunteer the help of the Gift of Life Foundation, financial grants to REBNY residential organization operated entirely on is now recovering from leukemia . salespeople and brokers who are the financial support of parents, experiencing difficulties because of communities and businesses, and In addition to providing housing an unexpected illness or hardship . all funds go directly to support the to the families displaced following It also raised money for the REBNY children’s uniforms, playing equipment, East Harlem’s gas leak explosion Foundation, which provides relief for medical and liability insurance, trophies and supporting the Mayor’s Fund to victims of natural disasters and raises and field maintenance . Sponsorships Advance New York City, REBNY also money for groups that provide housing are vital to the survival of the Harlem hosted its 2nd Annual Upper Manhattan and services to New York’s neediest Little League, and REBNY gladly did its Committee Harlem Open House population . part to ensure the continuation of an Expo two weeks after the explosion . organization that shapes children into Attendees were encouraged to donate REBNY also partnered with Food Bank not only great baseball players, but to the Mayor’s Fund while experiencing for New York City for our 6th Annual great citizens . the vibrancy and spirit of the Harlem Summer Donation Drive, collecting community . food, information and support for The REBNY 27th Annual Pro-Am neighborhoods throughout all five Tennis Tournament gave participating boroughs . Food Bank provides over 400,000 free meals to New Yorkers d in need daily through its network of MAYOR’S FUND over 1,000 non-profit organizations and TO ADVANCE schools, and REBNY proudly worked NEW YORK CITY alongside Food Bank to harness the

REBNY 27TH ANNUAL PRO-AM TENNIS TOURNAMENT

18 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 NEW YORK CITY ISSUES

NEW YORK CITY ISSUES

ONE-WAY VOICE more effective and practical approach these codes, the Commissioner of Small COMMUNICATION BILL to accomplish what we believe the bill’s Business Services also has the jurisdiction Currently, only new high-rise construction intentions to be . to enforce all provisions of the codes . (buildings taller than 125 feet) requires The Fire Commissioner can enforce all the use of an emergency voice BUILDING CODES provisions of the codes relating to issues communications system . Legislation was Recently, new construction codes such as overcrowding, fire hazards, the introduced in March 2014 that would took effect in New York City . These posting and availability for inspection of require the retroactive installation of codes reflect years of research and certificates of occupancy, the installation one-way voice communication systems development and are designed and testing of fire alarms, and other items in all (new and existing) residential to provide reasonable minimum related to fire safety . buildings with more than three units . requirements and standards based on The City Council bill (Int . 0144-2014) was the most up-to-date industry knowledge, The code revision process involved in response to last January’s fire at The updating the Building Code, Mechanical more than 350 people, including Mayor Strand apartments, which resulted in Code, Plumbing Code and others . The de Blasio and Deputy Mayor Anthony one injury and one fatality when they new codes take effect on December Shorris, all of whom we thank for their attempted to evacuate the building . 31, 2014, and will be applied to all new role in improving building safety for all Although well-intentioned, REBNY has construction and alteration projects that New Yorkers . REBNY and its members concerns with this proposal, and we submitted construction documents on or were also extremely active in the conveyed them to the administration and before that date, as well as safety work Building Code revision process . Many the City Council . with plans approved on or after that of the new provisions reflect the input date . Full demolition projects must be of our members, which ensures that As an amendment to the Building Code, permitted in advance of 12/31/14 in order they are practical and workable as well the proposal appears to be applicable to to continue using the 2008 Code . as being an improvement from the older all residential buildings, not only those provisions . with more than three units . The new construction codes are a result of the New York City Department CRANE OPERATORS TESTING AND In addition, the bill would impose large of Buildings Code revision process, LICENSING REQUIREMENTS costs on the city, since the proposal would in addition to other local laws which REBNY worked alongside the City cover all NYCHA properties . Likewise, all were passed by the City Council in the of New York in the development and affordable housing developments would wake of Superstorm Sandy . Many of implementation of legislation which struggle to comply . the new updates incorporate changes established strict new licensing and to the 2009 International Building testing requirements for all New York Initial estimates suggest that installation Code, as well as allowances for the City crane operators, in order to raise costs would be in the range of $135K latest technologies, materials and safety standards for crane operations for a four-story building, to $600K for construction methods . The New York City citywide . a 40-story building . Since these costs Construction Codes themselves contain would also qualify as Major Capital several changes focused specifically These changes require new applicants Improvements, rent regulated tenants on protections against weather events to receive certification from either the would see rent increases to cover these and recommendations by the National National Commission for the Certification capital investments . Institute of Standards and Technology of Crane Operators (NCCCO) or an WTC Report . organization accredited by the National REBNY believes that an increase in Commission for Certifying Agencies public education through the FDNY’s While it is the responsibility of the or the American National Standards Fire Safety Education Unit would be a far Buildings Commissioner to enforce Institute . The NCCCO is an accredited

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 19 NEW YORK CITY ISSUES

non-profit organization that develops EAST MIDTOWN STEERING review process, would allow for larger performance assessments for safe crane COMMITTEE development through the purchase operations worldwide . Exams offered by REBNY is committed to promoting a of air rights from Grand Central or the NCCCO are updated frequently to reflect plan that enhances the commercial commitment to complete major transit emerging technologies, and the exams character of the East Midtown district infrastructure improvements in the Grand also require applicants to be tested on a and builds upon the transit and open Central area . Any new development variety of cranes as opposed to a single space assets already in place . Therefore, that wishes to take advantage of the piece of equipment . we were a strong advocate for the higher permitted FAR would have to rezoning of East Midtown to preserve go through a special permit process . the quality of this premier office district The second phase would focus on the through targeted new development and remaining area covered in the earlier to enhance transit infrastructure and rezoning proposal . Councilmember Dan the public realm through contributions Garodnick and Manhattan Borough to a district improvement fund as a President Gale Brewer, with the support condition for building above the current of the administration and the Department base FAR . Mayor de Blasio committed of City Planning, have established to the general goals of the rezoning a Steering Committee comprised but thought changes were needed to of stakeholders, such as REBNY, address the concerns raised by a number preservation and civic groups, and the of stakeholders to the earlier plan . The local community boards, to develop a set of principles and guidelines that Applicants are now required to pass new East Midtown initiative was divided would inform City Planning’s written and practical exams tailored to into two phases: the first phase would development of a new East Midtown the specific equipment for which the focus on the Vanderbilt Avenue corridor, from 42nd to 47th Streets between rezoning plan, which is scheduled for license is to be issued . This ensures that each operator has adequate experience Vanderbilt and Madison Avenues . This late summer or early fall 2015 . and knowledge pertaining to use of the phase, which is in the city’s land use appropriate crane model .

Prior to these changes, national certification was only required in order to operate the smallest mobile cranes in the city .

REBNY is committed to these safety reforms, and has strongly encouraged the administration not to amend these safety standards, which has led to a safer environment for construction workers and New Yorkers alike . In a time in our city’s growth where construction is taking place on a larger scale than ever before, it is important to prioritize safety above all else . Grand Central Station Photo: One Vanderbilt Credit: KPF

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GARMENT CENTER/SOHO REZONING artists . Based on a survey done by the EAST HARLEM EXPLOSION We have continued to advocate with city following the enactment of this In March, a gas leak in East Harlem the new administration for amendments provision, as many as two thirds of caused an explosion which destroyed to the Zoning Resolution that would the units were occupied by individuals two apartment buildings north of 116th eliminate outdated and ineffective who were not certified artists . SoHo Street . This explosion resulted in eight provisions in the Garment Center and has changed from a manufacturing fatalities, injuries, and the displacement in SoHo . The Garment Center zoning district to a residential community with of families in the surrounding buildings . has a preservation provision on the vibrant ground floor retail . Community REBNY stepped in to identify among mid-blocks that requires permanently members are embarking on a study to its members available apartments for setting aside one square foot of determine the number of lofts currently those individuals and families who were space for apparel production for every occupied by certified artists, to displaced by the explosion . By working square foot converted to office use . demonstrate that this requirement is no with Mayor de Blasio and other city This attempt to protect apparel jobs longer effective and, based on these officials, REBNY was able to provide has been ineffective in stopping the results, to advocate for amending this 39 apartments on the east side for the migration of these apparel production outdated provision . families temporarily displaced, as well jobs to low-cost areas throughout the as find long-term housing solutions city, country and around the globe . for families whose apartments were destroyed by the explosion . The New The SoHo zoning requires that lofts York State Association for Affordable can be converted for residential use Housing assisted in acquiring temporary only if the unit is occupied by an artist and long-term housing, as well as The certified by the Department of Cultural Durst Organization, Glenwood, Sidney Affairs . Since the enactment of the Fetner Associates, Stahl Real Estate and artist certification requirements, units Urban American . in the area continue to be occupied by residents who are not certified In addition to providing housing, REBNY proudly supported the Mayor’s Fund to Advance New York City, which developed a strategic relief plan with service providers that were leading the relief effort . REBNY donated $100,000 towards a victims’ assistance fund, counselling services and community outreach . In total, the Mayor’s Fund raised $430,000 and greatly contributed to restoring essential building services as quickly as possible, making the necessary repairs and meeting the needs of the victims .

REBNY Chairman, Rob Speyer, Mayor Bill de Blasio and city officials addressed the media about the East Harlem explosion.

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REAL PROPERTY TAX CHANGES — rate and affordable housing . The city for building renovation or rehabilitation INCOME & EXPENSE should be doing all it can to facilitate reviewed and signed off by Landmarks . REBNY has been advocating for construction; however, a City Council bill Being calendared by the Landmarks structural changes in the real property (Intro . 17) proposes to place strict limits of Preservation Commission, but not being tax system . We have continued to construction taking place on weekends designated a landmark, has placed these advocate for fair and accurate treatment and after hours . REBNY strongly opposes properties in a state of limbo, which for of the operating expenses that income- this bill . some of these properties has continued producing properties incur . These for nearly 50 years . expenses are not properly treated in the After-hour permits are critical to timely assessment process, particularly capital and efficient construction . Outside of We released a report entitled “Housing improvements, leasing commissions and regular business hours is typically the Production on NYC Landmarked tenant build out costs . The New York best time to install cranes and deliver Properties”, which analyzed the City Department of Finance informed us materials that would seriously disrupt diminished housing production in that they will no longer ignore amortized vehicular and pedestrian traffic . After- historic districts throughout the city . capital improvements on the Income and hours work can expedite construction, Our report concluded that landmarking Expense statement of commercial and which would lower cost and limit the significantly impedes the creation of new residential rental property . Though these amount of time a new project takes to affordable and market rate units in all amounts are capped and the capital complete . After-hours work currently five boroughs . Several factors, including improvement allowance will escalate over has restrictions intended to minimize any lengthy public review, increased design the next three years, owners may still adverse impact on the local community . and construction costs, and height and submit the actual expenses incurred and density restrictions related to land- This bill would extend the burdens on bring these higher costs to the attention of marking, make the already-challenging the surrounding communities, delay DOF as part of their Income and Expense process of housing construction even needed development and add to its cost . submission . Likewise, DOF will raise the more arduous and uninviting . Between Currently, the city has full discretion over caps on leasing commission payments 2003 and 2012, a total of 206,819 new the hours of the work permits they issue, and tenant improvements from $2 and residential units were constructed in the and any policy issues about after-hours $3 respectively to $4 60. and $5 65. city, only 1,318 of which were constructed construction should be considered by per square foot . An increase in these on landmarked properties . Less than the Mayor’s Office . expense items will cover 90 percent of one percent of the new residential construction during this period is on the properties . A more accurate treatment LANDMARKING landmark sites . We must recognize that of these expenses will produce a more Landmarking and its impact on housing landmark designation places significant accurate market value assessment for production, both affordable and market restrictions on a property and balance these income-producing properties . rate, continued to be a critical issue with the critical need of the city to produce REBNY in 2014 . In 2014, REBNY President Steven Spinola more housing with its landmarking was appointed to the DOF Commissioner In December, the Landmarks activity . Jacques Jiha’s Policy & Administration Preservation Commission proposed to In 2015, REBNY will continue to work Advisory Board . de-calendar a number of properties . This towards preserving the best of New York administrative action would release these INTRO 17 city’s architectural, historic and cultural properties from the jurisdiction of the As our population continues to grow, heritage, while not obstructing the city’s Landmarks Preservation Commission, so does the need for more market ability to produce affordable housing . which required them to have all plans

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LIVING WAGE EXECUTIVE ORDER predictable and timely permit approvals HOUSING RECOMMENDATIONS/ Mayor Bill de Blasio issued Executive for developers, and provide greater REBNY INVOLVEMENT Order No . 7 in September, which regulatory certainty of ecological success Prior to the Mayor’s issuance of his mandated the payment of a living wage of wetland mitigation projects . Housing New York plan, REBNY to employees of tenants, subtenants, members prepared a series of ideas to leaseholders, sublease holders and In 2014, REBNY actively supported assist the administration in achieving contractors of a financial assistance this initiative, served on the Technical its bold and lofty goal of preserving recipient . The living wage executive Advisory Committee and shared our and building 200,000 units in 10 years . order defines a financial assistance members’ experiences of the economic These ideas were based on the collective recipient as an entity who receives and operational inefficiencies that result experience of our members and discretionary financial assistance from from the existing regulatory framework . reflected what policy ideas worked and the city of more than $1 million and The current average time to receive why . Some of our ideas were also part whose consolidated gross revenues wetlands environmental permits is of the Mayor’s plan, such as increasing are more than $3 million . At the time of approximately 3 5. years and can cost density where appropriate, expediting its enactment, the living wage rate was up to $2 million per acre of mitigation . the environmental review, expanding set at $11 50. and the health benefits The Mitigation Bank would serve as inclusionary housing and preserving supplement was $1 63. per hour . The a third-party entity that completes the existing affordable housing . Other ideas living wage rate will be adjusted annually restoration work off-site in advance, we presented included the impact of based on changes in the Consumer generates mitigation credits, and then legislative mandates on housing costs, Price Index and announced no later sells these credits to developers who controlling the rising construction costs than January 1 by the Commissioner need to offset future wetlands impacts . for housing production, creating other of Consumer Affairs . REBNY has been This program will benefit applicants options to create affordable housing working closely with the administration by providing a more streamlined and in Geographic Exclusion Areas (GEA); to clarify the many issues which have predictable permitting process, and will permitting off-site affordable housing in been raised by our members (such allow the city to rehabilitate larger and selected communities to generate tax as what are the as-of-right incentive more critical wetland regions . or floor area benefits, and establishing programs that do not trigger a living The city has identified Saw Mill Creek wage requirement) concerning the Marsh in Staten Island as the first location implementation of this executive order . for the MARSHES project . As it stands MARSHES PROJECT now, Saw Mill Creek Marsh is rife Last year, the NYC Economic with dumped waste, infill, weeds and Development Corporation, along with obstructions to the flow of the tide . the Mayor’s Office and the Departments MARSHES will remedy these conditions of Parks and Recreation, Environmental and return Saw Mill Creek Marsh to Protection, and City Planning, began to its original healthy ecosystem, which create the city’s first wetlands mitigation will provide the added benefit of a bank . The MARSHES (Mitigation and natural buffer from coastal flooding . Restoration Strategies for Habitat and It is anticipated that the first round Ecological Sustainability) Project seeks of wetlands mitigation credits will be to create a mechanism that will facilitate released in 2015, and we hope the city larger wetland restoration in ecologically will look to expand this cost-effective sensitive coastal areas, foster more mitigation program .

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HIGHLIGHTS FROM “HOUSING a better balance between the value of NEW YORK — A FIVE-BOROUGH, the benefit to the builder and the cost of the benefit to the city; encouraging the TEN-YEAR PLAN” conversion of underutilized commercial space for housing; aligning the period 1 . CHANGE AND EXPAND THE RANGE OF INCOMES WE SERVE • 60% preservation; 40% new construction of the tax benefit with the period of the • 8%---Extremely Low---less than $25,150---less than 30% AMI affordability requirement . Lastly, we have • 12%---Very low---between $25,150–$41,950---between 31-50% AMI had an in-depth discussion with the • 58%---Low---between $41,951–$67,120---between 51-80% AMI • 11%---Moderate---Between $67,121–$100,680---between 81-120% AMI administration about the renewal of the • 11%---Middle---between $100,681–$138,435---between 121-165% AMi 421a which expires in June 2015 . This 2 . REVAMP PLANNING PROCESSES AND LAND USE POLICIES program has been the critical incentive • Place-based, community-based planning . Involving the communities at for housing production and needs to be the beginning of the process . This must occur citywide . renewed . • Accelerating the pre-ULURP and CEQR process . • Review parking requirements, transfer of development rights and other rules that have stymied new development . MAYOR’S HOUSING PLAN • Develop a program to develop small vacant sites . In early May, Mayor de Blasio released his eagerly awaited housing plan to 3 . ECONOMIC DIVERSITY: THE CORNERSTONE OF HOUSING DEVELOPMENT • Housing must be mixed income — 80/20 has been successful . Develop preserve and build 200,000 units of new models that generate more affordability (50-30-20) . affordable housing . “Housing New • Mandate affordability where rezonings unlock substantial new housing York — A Five-Borough, Ten-Year Plan” capacity . • Promote senior, supportive and homeless housing . outlined the administration’s priorities, • Promote quality jobs as part of this new development . devoting 60 percent of the units for low 4 . DEPLOY MUNICIPAL TOOLS AND ASSETS MORE EFFECTIVELY income households (between $42,000 • Better utilization of underused publicly owned land . and $67,000) . In addition, 60 percent of • Maximize affordable housing production using 421a, inclusionary housing, the 200,000 will be achieved through low-income tax credits and tax-exempt financing . preservation; the remaining 40 percent 5 . STRATEGICALLY PROTECT PAST INVESTMENTS (80,000 units) will be achieved through • Preserve the affordable housing that we have already built from Mitchell new construction . The administration Lama to the low income units created through the 80/20 program with simple, flexible tools . will better utilize publicly-owned land • More challenging, protect privately owned affordable housing from market- and will seek to maximize the amount driven rent increases or conversion in changing neighborhoods that would of affordable units from the benefit take them out of the affordable housing stock . programs (tax-exempt financing, tax 6 . AGGRESSIVELY PROTECT RENT-REGULATED TENANTS credits, inclusionary housing) now • End harassment and probably overleveraging of affordable projects expecting to have sizeable rent increases as the units go to market . available . In addition, the city will double • Rents are rising faster than incomes, increasing the number of households HPD’s capital budget for housing in the which are rent burdened . 55 percent of rental households are rent burdened . five-year plan . (See the sidebar for more • Stem the tide of deregulation . details about the Mayor’s plan ). 7 . LEVERAGE TODAY’S FAVORABLE MARKETS • Promote building in this low-interest rate environment . • Possibly use high-end market rate development to generate revenue to fund affordable housing . 8 . INCREASE CAPITAL FUNDING • Capital plan will double HPD’s annual capital budget in the five-year plan . • Funding infrastructure investment to make land available for housing . • Use loan securitization to maximize HDC resources . • Work with pension funds to leverage private capital . • Work with state and feds to identify new resources .

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Advisory Board for residential building workers . REBNY was pleased with the outcome of these negotiations and what it means for the real estate industry and the city as a whole .

The contract was reached on April 20th, nine days before its expiration . It covers more than 30,000 residential building service employees who work in over 3,000 residential rentals, coops, and condo buildings . The contract includes an average wage increase of 2 71%. each year over the four-year contract, or 11 3%. total, and brings total wages (not including benefits) for a typical doorman or porter from $44,389 to $49,402 by the end of the contract in April 2018 .

Building service worker jobs are an TRANS-HUDSON CONNECTIONS REBNY has been active in an effort to important component of the real estate Investment in the Gateway project and secure the $2 million required to fund related activity in New York, which the 7 line connection to Secaucus is vital the next phase of a study to evaluate accounted for $15 .4 billion in tax revenue for several reasons, such as Amtrak’s the cost, the alternatives and the last year . growing demand along the northeast operational issues with extending the 7 corridor, the increasing number of city line from Hudson Yards to a new multi- The new contract continues a tradition workers coming from west of the Hudson, modal terminal at the Frank Lautenberg of providing solid middle-class jobs the age and condition of our existing rail Station in Secaucus, New Jersey . With with good wages and benefits – critical tunnels under the Hudson, the need to the suspension of the Access to the elements to ensuring an economically provide redundancy and resiliency for Region’s Core (ARC) project, the region diverse city . REBNY looks forward to Trans-Hudson connections, and the lack has lacked a regionally acceptable continuing a long-term productive of capacity at the Lincoln Tunnel and solution to address the myriad problems relationship with the hard-working Port Authority Bus Terminal to meet the as a result of the region’s growth and members and leadership of SEIU 32BJ . growing demand for bus commuters aging infrastructure . Promoting the and the problems it presents in the development of critical Trans-Hudson Hudson Yards neighborhood . Gateway connections for the northeast and the continues to have the strong support New York region is essential for our of our members and our local elected continued growth and prosperity . officials in Washington . Important steps have been taken in the development UNION CONTRACTS/32 BJ of Hudson Yards to accommodate the CONTRACT SETTLEMENT construction of Gateway . A new four-year contract was reached between SEIU 32BJ and the Realty

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ECONOMIC IMPACT office buildings, hotels, retail stores and This total was more than personal “The Invisible Engine: The Economic utility property (excluding real property, income tax and sales tax combined . Impact of New York City’s Real Estate transfer and mortgage recording taxes These taxes could pay the city’s entire Industry” was a report commissioned from 1-3 family homes and coop and share of salaries for teachers, police by REBNY and prepared by AKRF . The condo units) and the real estate activity, officers, fire fighters, sanitation workers report identified the annual taxes and the such as building service workers and real and correction officers, with $2 3. billion economic activity generated by the real estate brokers, directly associated with left to fully fund numerous city agencies . estate industry . We defined the industry real property . In a year, the real estate (See the following page for more results as all revenue-generating property, industry generated $15 4. billion, or 38 from the report ). such as residential rental buildings, percent of New York City’s tax revenue .

SUSTAINABILITY

For more than a decade, the real estate community has been working on addressing environmental and sustainability issues . Many leaders in our industry are also leaders in the environmental community in New York City . REBNY’s members have been taking significant concrete steps to reduce emissions, strengthen climate resilience and minimize the effects that their properties have on climate change . Hurricane Sandy exposed a number of vulnerabilities in many buildings all over New York City . Our industry has taken note of these vulnerabilities and has begun to address them . By optimizing our energy usage and continuing to work on green projects, members of our industry are setting an example for all of New York City to follow, and proving what can be possible when a city works to the best of its abilities .

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THE INVISIBLE ENGINE: THE ECONOMIC IMPACT OF NEW YORK CITY’S REAL ESTATE INDUSTRY

THE INVISIBLE ENGINE: THE ECONOMIC IMPACT OF NEW YORK CITY'S REAL ESTATE INDUSTRY

HIGHLIGHTS FROM THE REPORT

ANNUAL TAXES FROM THE REAL ESTATE INDUSTRY1 • $15.4 billion, which is 38% of total NYC taxes collected, is from the real estate industry, including taxes from revenue-generating properties (such as residential rental buildings, office buildings, hotels, retail stores, and utility property; it excludes property and transaction taxes from 1-3 family homes and coop and condo units) and real estate activity • These taxes could pay the City’s entire share of salaries for teachers, police officers, fire fighters, sanitation workers and corrections officers, with $2.3B left to fully fund numerous City agencies

ANNUAL REAL ESTATE INDUSTRY CITY FUNDED PAYROLL EXPENSES SHARE OF NYC TAXES THAT COULD BE PAID BY REAL

($ in billions) ESTATE INDUSTRY TAXES ($ in billions)

Other 13% Sales $5.1 13% $5.4 Real Estate Industry 38% Owner-occupied $15.4 Properties 16% $6.5 Personal Income 20% $7.8

* $2.3 billion remaining can fully fund the following agencies: Parks, Libraries, Homeless Services, Youth and Community Development, and all 5 District Attorney offices

TOTAL ECONOMIC IMPACT2 OF THE REAL ESTATE INDUSTRY • $106 billion in total economic output • Approximately 13% of Gross City Product (GCP) • 519,000 total jobs—representing approximately 11% of the City’s total jobs • $33 billion in total wages • $61,430 = The average salary for a worker directly employed in the real estate industry

1 Annual taxes include real estate related taxes (property, mortgage, transfer, hotel, and commercial occupancy) from revenue generating property (all properties in Class 3- utility and Class 4- office, hotels, etc. and all residential rental buildings in Class 2; it excludes property and transaction taxes from 1-3 family homes and coop and condo units) and taxes (personal income, sales, corporate and other business taxes) generated by real estate industry activity. Activity includes individuals employed in the real estate industry (e.g. Brokers, property managers) and the goods and services this employment generates. 2 Total economic impact is the combined direct, indirect, and induced effect on the local economy, including jobs, wages, and tax revenue and includes construction and non-construction real estate activities.

THE INVISIBLE ENGINE: THE ECONOMIC IMPACT OF NEW YORK CITY'S REAL ESTATE INDUSTRY| HIGHLIGHTS

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 27 NEW YORK STATE ISSUES

NEW YORK STATE ISSUES

BROWNFIELDS The New York State Brownfield Cleanup Program has been one of the most successful environmental remediation and economic development programs of recent memory . 161 Certificates of Completion have been granted by the Department of Environmental Conservation through the program since its inception in 2003, decontaminating hundreds of acres of blighted land .

The BCP was set to expire in December 2015 . As a result of successful advocacy by REBNY and several other organizations, the New York State Legislature passed a bill to extend Albany, State Capitol Building the program through March 2016 . In December 2014, Governor Cuomo vetoed the legislation .

ATTORNEY GENERAL MEMO ON operate the affordable units as income REBNY will continue to advocate for CONVERSIONS (80/20) restricted rental (a “partial sales program”) . a more substantial extension of the The Attorney General’s Real Estate This forecloses a potential means of program this year as part of the ongoing Finance Bureau, responsible for coop and preserving affordable housing and, program reform discussions . We look condo offering plans and conversions, potentially, expanding its quantity . Going forward to continuing our conversation issued a memorandum in October that forward, DOL will use its authority to grant with the Governor’s office and the State outlines how an owner may seek an exemptions from these regulations in Legislature to put in place a long-term exemption to convert mixed income service of that objective . reform of the BCP that will continue to (80/20) buildings to condominiums or benefit the State and its inhabitants Specifically, exemptions will be granted to cooperatives . REBNY and its members through the effective cleanup of allow a partial sale program if, and only if, advocated for such a change both to brownfields . facilitate the conversion of market rate the applicant has obtained the support for rental housing, which in part would the exemption from the relevant housing RENEWAL OF ECONOMIC INCENTIVES alleviate the shortage of inventory for finance agency (HPD, HDC or HFA) FOR NEW YORK CITY middle income buyers and preserve the because the conversion will preserve As part of the approval of the State stock of low-income units . existing affordable housing following the Budget, a number of important expiration of existing requirements and economic incentive programs were Under Department of Law (DOL) may add additional income-restricted renewed and extended for two years regulations, an owner does not generally units — rental or homeownership — to the as a result of our support . We have have the option to offer for sale only the project . We think that this exemption will been long-time advocates for targeted market rate rental units in an occupied benefit the housing market for low and economic incentives to spur growth in building while continuing to own and middle-income households .

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critical areas of our city and to partially SCAFFOLD LAW based on their proportional share of and temporarily mitigate the high tax New York State’s “Scaffold Law”, or the fault . burdens in New York City . The following NYS Labor Law Section 240, contains programs were extended: the Industrial an absolute liability clause against REBNY is also negotiating with and Commercial Abatement Program contractors and property owners for all important stakeholders in hopes (ICAP) and the Relocation Employment gravity-related injuries . This provision of resolving this matter, as well Assistance Program (REAP), which are is directly related to the dramatic as engaging in discussions with citywide programs; the Commercial increases in general liability insurance the leadership of state legislature, Revitalization Program (CRP), which is costs . For example, the New York City including Assembly Majority Leader targeted to Lower Manhattan, and the School Construction Authority saw their Morelle, author of the Scaffold Law Commercial Expansion Program (CEP), insurance costs nearly triple following reform bill . Our proposed solution which provides benefits in selected the expiration of their last policy, would maintain workers’ compensation commercial districts in the other equivalent to the cost of building 10 and medical benefits and would permit boroughs; sales tax exemptions for new schools . employees to pursue claims against eligible areas in Lower Manhattan, as well their employers who were negligent . as an energy cost reduction program . Under this clause, workers’ negligence STATE BUDGET These programs have been a catalyst for is not a consideration when determining For the fourth consecutive year, the capital investment and job retention and liability . This absolute liability standard New York State Budget was adopted creation, and critical to economic activity deprives owners and contractors and passed on time in 2014 . This is in New York City’s high tax environment . (defendants) the opportunity for a something which has not occurred (NOTE: ICAP provides tax exemption jury trial on the issue of whether the since the time of Governor Nelson benefits for commercial, industrial and worker’s actions contributed to the Rockefeller over four decades ago . retail development, new construction accident . Plaintiffs are also routinely 2014 was also the fourth consecutive or renovation, subject to geographic awarded summary judgment even in year that spending growth was held and use eligibility requirements . REAP instances where the accidents are below two percent and taxes were not provides a 12-year tax credit of $3,000 unwitnessed . raised . This is a state budget that is per employee for relocating employees Reform is badly needed . Because of very beneficial to our industry and all from Manhattan to the boroughs and for this, REBNY has joined the Lawsuit New Yorkers . employees outside the city relocating Reform Alliance in their efforts to to Lower Manhattan . CRP provides a implement a comparative negligence Among the items REBNY ardently tax abatement and a commercial rent standard . This new standard would supported in the State budget tax reduction for five years for firms that limit owners’ and general contractors’ agreement was the extension of sign a lease in Lower Manhattan . CEP liability to a percentage of the liability economic incentive programs, such provides a tax abatement for tenants in selected geographic locations in the boroughs outside Manhattan . New York State Sales Tax Exemption is available in eligible areas in Lower Manhattan to offset the cost of tenant build out . The Lower Manhattan Energy Program provides tenants that meet the eligibility requirements a rebate in the form of a reduced energy bill ).

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as the Industrial and Commercial lowering of the corporate tax rate to However, it was unclear how extensive Abatement Program and the Relocation 6 .5 percent from 7 1. percent . the asbestos contamination was, and Employment Assistance Program, whether the vermiculite used in New which were both extended for an TRANSFER TAX REDUCTIONS York City’s buildings actually contained additional two years . These programs FOR REITS asbestos, and if so, what percentage of provide significant economic benefits Since the early 1990s, with the the vermiculite was contaminated . for eligible projects in New York elimination of the State’s tax on the City . The Commercial Revitalization gains derived from certain real property To address these uncertainties, REBNY Program property tax abatement, transfers and amendments to the New hired Dr . Eric Chatfield and Dr . William Energy Cost Savings Programs, Sales York City and State Transfer Taxes, Esposito, acclaimed environmental and Use Tax Exemptions, and the Real Estate Investment Trusts (REITs) consultants and laboratory scientists, commercial rent tax reduction were have facilitated real estate transfers to create a testing method to determine also extended for eligible projects in and capital investment in numerous the asbestos content of the vermiculite Lower Manhattan . These programs are properties, especially in New York used in buildings . We are pleased to incredibly important in attracting new City . We have strongly supported report that as of November 1st, the capital investment and jobs to both those changes as well as a proposed method of testing for asbestos in established and emerging commercial state extension for three more years vermiculite developed by Drs . Chatfield centers throughout the city, such as of the transfer tax reduction for REIT and Esposito is the only approved Lower Manhattan and Downtown transactions that meet the law’s non-proprietary method, and the Brooklyn . requirements . procedure is currently being rolled out to laboratories throughout the state . As part of corporate tax reform, VERMICULITE captive insurance entities (or entities In November, the State approved that self-insure) would have been two new methods of testing for taxed as regular businesses, not as asbestos within vermiculite . These insurance companies . REBNY worked new methods will continue to protect on a modification to this provision, the public’s health and safety and which states that captive insurance avoid unnecessary abatements . entities will only be taxed if they are These changes come as a result of overcapitalized, such as if their assets close collaboration between some of are greater than their liabilities . the world’s most respected scientists regarding vermiculite, government The budget also included funding officials, REBNY and some of our for statewide, universal, full-day pre- members most familiar with this issue . kindergarten, $1 .5 billion in property tax relief for homeowners outside of New For decades, vermiculite was used for York City, the elimination of the bank tax fire protection and replaced asbestos . and inclusion of banks in the modified It was later learned that the type of corporate franchise tax (Article 9A), an vermiculite that was mined in Libby, increase in the exclusion threshold for Montana, could be contaminated with the estate tax from $1 million to $5 25. asbestos . The Libby mine was shut million (the federal level), and the down due to asbestos contamination .

30 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 FEDERAL ISSUES

FEDERAL ISSUES

TRIA Association, and many more associations of the 2008 economy . As underwater The Terrorism Risk Insurance Act (TRIA) and organizations sent a letter to Senate mortgages and foreclosures increased, is instrumental in protecting many Majority Leaders Harry Reid and Mitch they experienced substantial losses, and businesses from the monumental McConnell urging them to pass the several proposals have been submitted consequences which can be suffered Menendez/Enzi proposal to provide to rectify this . These proposals range as a result of acts of terrorism . Without relief from the Foreign Investment in Real from shuttering GSEs in their entirety, TRIA, there is real concern that projects Property Tax Act (FIRPTA) . to more modest reforms such as will be unable to receive or afford increasing down payments and financing insurance coverage which could push REBNY supported this letter for several requirements, limiting types and sizes these buildings into default on their reasons . of backed mortgages, shortening term financing . Likewise, new developments loans, and raising interest rates . The Menendez/Enzi proposal includes would not be able to secure construction two critical provisions to mobilize foreign or permanent financing to proceed . TRIA United States Senator Charles Schumer capital for investment in the United is important to the real estate industry reached out to REBNY to assess the States . First, it would remove the tax in New York as well as to development impact of these reforms, both in the penalty that FIRPTA imposes on foreign projects in other cities and suburban multifamily lending market and single pension funds that invest in US real areas across the nation . family home loans . Representatives estate and infrastructure . Second, it from his office have met with our staff Since its enactment there have been no would increase the ownership stake that and Board Members . As a result of claims filed . TRIA is a prime example of a foreign investor can take in a publicly these discussions, Senator Schumer something New Yorkers would rather traded company whose assets consist has written a letter to FHFA urging them have and not need than need and not largely of US real property without to avoid implementing further arbitrary have, and something essential for the triggering FIRPTA liability and extend the reductions or placing caps on Fannie stability of New York’s real estate market . provision to certain collective investment Mae’s and Freddie Mac’s origination vehicles . levels and securitization activities with We were very disappointed that regard to multifamily finance . REBNY Reforming FIRPTA would not only make despite a great effort to extend TRIA will continue to monitor this activity and New York more appealing to investors in December 2014, issues completely convey our concerns with any revised around the world, but also open up separate from the goal of providing a reform proposals to Senator Schumer . national backup insurance program for opportunities for job creation here at acts of terrorism failed to pass Congress . home . ILSA However, the bipartisan effort to extend With the strong and unrelenting GSE REFORM this critical program will continue . We support of our federal elected officials Following the economic downturn will work with both Houses of the new and working in partnership with the in 2008, Congress and the Obama Congress and both sides of the aisle to Real Estate Roundtable, REBNY has Administration have been working move a bill, because the economy of our succeeded in having the Interstate through the Federal Housing Finance country, well-paying jobs and enormous Land Sales Act (ILSA) amended . This Agency (FHFA) in an effort to reform tax revenues for the nation and local amendment closes a damaging loophole the way Government Sponsored municipalities depend on it . which allowed condominium purchasers Enterprises (GSEs) such as Fannie to rescind valid purchase contracts . FIRPTA Mae and Freddie Mac operate . These In November, the Institute of Real organizations are essential in the flow of Originally passed in 1969 to protect Estate Management, The Real Estate capital into mortgage products and were consumers from being fraudulently Roundtable, the National Apartment not immune from the negative effects sold property due to misleading

THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 | 31 FEDERAL ISSUES

advertising, ILSA was applied to vertical condominiums beginning in the 1980s . Following the real estate market crash in 2008, many prospective purchasers sought to void their pre-crash contract by claiming technical violations of ILSA . The amendment exempts condominium developments from ILSA filing and registration requirements .

Not only did this amendment provide administrative relief from myriad duplicative filings, but the Interstate Land Sales Disclosure Act Update of 2013 also retains ILSA’s anti-fraud provisions, ensuring that ILSA can still continue to serve its original purpose .

REBNY commends the leadership of Senator Charles Schumer and Congressmember Carolyn Maloney, along with Senators Dean Heller and Kirsten Gillibrand, and Congress- members Michael Grimm, Jerrold Nadler and Patrick McHenry in securing passage of this legislation . Finally, our efforts would not have been successful without the hard work of our partners at the Real Estate Roundtable .

32 | THE REAL ESTATE BOARD OF NEW YORK ANNUAL REPORT 2014 CONTACT REBNY

REAL ESTATE BOARD OF NEW YORK 570 LEXINGTON AVENUE • 2ND FLOOR • NEW YORK, NY 10022 President • Steven Spinola • 212-616-5227 Executive Assistant • Gladys Roman

COMMUNICATIONS BROKERAGE SERVICES & EDUCATION 212-532-3100 212-616-5236 Press Inquiries Broker & Salesperson Licensing & Continuing Education REBNY Marketing Campaign REBNY Listing Service (RLS) REBNY com. NY1residential com. Facebook: facebook com/REBNY. onFB Membership Luncheons Twitter: twitter com/REBNY. Brokerage Committee Meetings Real Estate Weekly Column REBNY; How To Video Series Senior Vice President: Eileen Spinola Vice President for Brokerage Services: Jeanne Oliver-Taylor Senior Vice President for Communications: Jamie McShane Director of RLS: Freddy Sarabia Vice President for Digital Media and Technology: Brokerage Services: Ossie Shemtov Amanda L . Wood Executive Assistant: Indi Jaipal Communications Associate: Johann Hamilton Administrative Assistants: Angela Donovan, Desiree Jones, Yesenia Perez OWNERS & MANAGEMENT 212-616-5232 GOVERNMENT & PUBLIC AFFAIRS 212-616-5237 Green Buildings & Sustainability Energy City, State & Federal Relationships Coops & Condos REBNYActionCenter com. Rent Stabilization Campaigns Construction Issues REBNY PAC Labor Arbitration and Ethics Residential & Commercial Management Senior Vice President for Government Affairs: John Doyle Senior Vice President: Angela Sung Pinsky Senior Vice President for Public Affairs: Jim Whelan Assistant Vice President: Ali Davis Executive Assistant: Angela Caldwell Policy Analyst: Ryan Baxter Executive Assistant: Cindy Ramotar RESEARCH 212-616-5209 OPERATIONS Market Reports 212-532-3100 Zoning & Planning Chief Financial Officer: Bill Auerbach Real Estate Taxes Vice President for HR/Member Benefits: Kathleen Gibbs Government Development Incentive Programs Assistant Comptroller: Tracey Mallin Accounts Receivable/Payable: Rukminie Sudhai Senior Vice President: Mike Slattery Board Services: Jessenia Villarroel Vice President for Urban Planning: Paimaan Lodhi Vice President for Membership/Publications: Mary Ann Aviles Vice President and Economist: Brian Klimas Director of Compliance: Shelly Harris Research Analyst: Alison Wasserman Membership: Shameza Johnson, Yvette Schmidt, Director of the Durst Library: Carolyn Dunn Erica Maldonado, Marta Posner Executive Assistant: Pamela Choy Director of Computer Services: Farida Fadhil

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