New York Governor Kathy Hochul to Reinstate MTA Congestion Pricing Program

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New York Governor Kathy Hochul to Reinstate MTA Congestion Pricing Program

By Manhattan Real Estate Tracker, November 14, 2024

Governor Kathy Hochul intends to reinstate the MTA’s congestion pricing program with a $9 base toll for passenger automobiles, which is $6 less than the price originally authorized by the MTA. Governor Hochul paused the implementation of the program during the recent election, but it was expected to be brought back after the election. 

The program, which will charge drivers a fee for entering Manhattan south of 60th Street, was initially approved in 2019. Prior to June 30, the MTA had intended to impose a $15 base toll. The program’s proceeds must be used to pay for $15 billion in necessary transportation system maintenance for the MTA. Transit advocates argue that if the tolls are implemented before President-elect Donald Trump enters office, it will be more difficult for him to repeal them.

Over the past 20 years more and more streets in Midtown and Downtown Manhattan have been turned into pedestrian malls, bike lanes and parking lanes that are now almost in the middle of the roadway. These projects began with Mayor Bloomberg approximately 20 years ago. The sidewalk restaurant sheds also take away space on the streets. As a result, the congestion has been increased by these “green” projects.

According to the New York City Department of Health and Mental Hygiene (Health Department), the air quality in the city has improved dramatically during the 2008-2022 period. This survey concluded the following:

Citywide, annual average levels of four key pollutants have gone down between the first year of monitoring, 2009, and the most recent year of data, 2022.

Fine particles (PM2.5): -46%

Nitrogen Dioxide (NO2): -41%

Nitric Oxide (NO): -58%

Sulfur Dioxide (SO2): -97%

The data shows that air quality has improved significantly after local regulations required building owners to convert to cleaner heating oils by 2015. These heating oils were a major source of SO2 in New York City. In 2022, only eight of our 90 sites detected any SO2, and the levels at those sites were similar to SO2 levels measured on Whiteface Mountain in the Adirondack Mountains, demonstrating the success of the clean heating oil requirements.

The Fairness in Apartment Rentals (FARE) Act Passes in New York City’s Council 42-8

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The Fairness in Apartment Rentals (FARE) Act Passes in New York City’s Council 42-8

By Manhattan Real Estate Tracker, November 14, 2024

A bill was enacted yesterday in New York that eliminates broker fees for residential apartment renters. The New York City Council enacted the Fairness in Apartment Rentals (FARE) Act, which was introduced by Brooklyn City Councillor Chi Ossé. It takes effect 180 days from now. Typically, on a “no fee” apartment, the tenant pays the broker commission that normally ranges from one month’s rent to 15% of the first year’s annual rent. This bill would now require whoever hires the broker to pay the broker. Now as a result of this act, if the landlord/owner wants his broker to market an apartment as “no fee”, the landlord/owner will pay the broker an agreed upon commission. If a tenant retains a broker to find an apartment, then the tenant would pay the broker he retained an agreed upon commission.

According to REBY, “For five years, REBNY has been fighting against harmful legislation that threatens brokers’ livelihoods. The newest version of the FARE Act, like its predecessor, is bad legislation that would harm tenants and kill jobs. The revised FARE Act (Intro. 360-A) will hurt New Yorkers by and could limit their ability to learn about rental opportunities. The FARE Act could also lead to increased rents.  The FARE Act will certainly limiting housing access, raising rents, and jeopardizing the livelihoods of hardworking real estate agents.” 

Mayor Adams, a former real estate agent did not support the bill since he agreed with REBNY that the landlords/owners will simply add the broker commission they had to pay to the rent each month so that the tenant will be paying more for the apartment in the long run.

Brooklyn City Councillor Chi Ossé at City Hall on November 13, 2024

Heating and Hot Water Requirements for Apartments in the Five Boroughs of New York City

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Heating and Hot Water Requirements for Apartments in the Five Boroughs of New York City

By Manhattan Real Estate Tracker, November 13, 2024

Residential tenants are legally entitled to hot water and heat from building owners. A consistent minimum temperature of 120 degrees Fahrenheit must be maintained for hot water throughout the year. During the “Heat Season,” which runs from October 1 to May 31st, heat must be supplied under the following circumstances:
Day
If the outdoor temperature drops below 55 degrees between the hours of 6:00 am and 10:00 pm, the interior temperature must be at least 68 degrees Fahrenheit.
At night
The inside temperature must be at least 62 degrees Fahrenheit between 10:00 p.m. and 6:00 a.m.

From NYCHPD

City Council to Vote on FARES Act Tomorrow

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City Council to Vote on FARES Act Tomorrow

By Manhattan Real Estate Tracker, November 12, 2024

Tomorrow the City Council will be voting on the FARES act, a bill that is sponsored by Brooklyn Council Member Chi Osse (D).

A day before the bill is anticipated to pass the chamber, Mayor Eric Adams voiced reservations on Tuesday regarding City Council legislation that would exclude the majority of renters from paying real estate broker fees. Adams stated during his weekly off-topic news conference on November 12 that although he supports the FARE (Fairness in Apartment Rentals) Act’s premise, he thinks it will have unexpected consequences. If the FARE Act is passed, the person who hires a real estate broker would have to pay the fee, which is typically passed on to the renter. Adams argues that the law would force landlords to pay for brokers themselves, despite supporters’ claims that it would remove a significant upfront financial burden for renters.

According to Adams, “Some of the ideals collide with the reality of the operationalizing implementation,” Adams said. “We got to get it right, make sure that we reach the goals that we’re looking for, and at the same time don’t hurt small property owners and try to get some relief to some of those who are trying to live in the city … I think the bill has the right intention, but sometimes good intentions do not get the results you’re looking for.”

In response to the mayor’s remarks, Brooklyn Council Member Chi Ossé (D), the bill’s primary sponsor, wrote on social media on Tuesday that the measure would result in lower rent payments rather than higher rent. Minutes after claiming that Democrats lost the presidential election to Donald Trump due to the party’s failure to address “pocketbook issues,” Ossé also criticized the mayor for not fully endorsing the proposal.

If the measure is passed, renters will no longer be able to choose from apartments that are listed with or without broker fees.

Ares Management to Acquire a Large Hell’s Kitchen Residential Building

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Ares Management to Acquire a Large Hell’s Kitchen Residential Building

By Manhattan Real Estate Tracker, November 12, 2024

The majority (75%) of 525 West 52nd Street will be purchased by Ares Management. The deal was structured to incorporate an assumed $200 million loan at a below-market rate. This building was designed by Handel Architects. According to the building’s website, the apartments include state-of-the-art appliances, including in-home Bosch washers and dryers, high ceilings, and rooms are framed by oversized windows showcasing city and river views. Current availabilities range from approximately $3600 for a studio to $8000 for a two bedroom. It’s great living in Hell’s Kitchen.

Saks Fifth Avenue to Reduce Holiday Lighting This Year

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Saks Fifth Avenue to Reduce Holiday Lighting This Year

By Manhattan Real Estate Tracker, November 13, 2024

Saks Fifth Avenue announced today that the light display that radiates over the entire front of the building will not be up this year. The company did however say that the windows will be decorated for the holidays. A Saks spokesperson stated, “We look forward to welcoming customers to our holiday windows throughout the season and invite them to discover inspiring gifts and unique holiday offerings within the Saks Fifth Avenue New York flagship.”

Saks Fifth Avenue holiday lights in 2020

Corcoran Group Data Indicates Number of Signed Residential Leases Continues to Decline

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By Manhattan Real Estate Tracker, September 13, 2024

The latest residential leasing report by Corcoran indicates that while average rents continued to increase by 4%, the number of reported signed leases has declined in eight of the last nine months. The number of signed leases decreased annually by 15% to fewer than 4,800 lease – the lowest level since the early stages of the pandemic in June 2020. Corcoran concludes that “a larger portion of Manhattan’s renters have decided to stay put.”

Gary Malin, Chief Operating Officer, The Corcoran Group stated:

“Median rents in both Manhattan and Brooklyn continued their rise during June and are now at new all-time highs in both boroughs. However, it is important to note that the number of lease signings slowed on both sides of the East River, falling a substantial 14% and 23% in Manhattan and Brooklyn, respectively, when compared to May. Historically, activity increases as we enter summer, so the record-high pricing might be keeping some apartment seekers on the sidelines or choosing to explore options in other boroughs or locales. It will be interesting to see if this trend reverses as we move through the season. At a certain point, there is a limit to how much a renter is willing — or able — to pay. Barring a turn-around, landlords may need to increase incentives or make the necessary adjustments to spur greater numbers of tenants to act.”

Trader Joe’s Opens in Harlem at 123 West 125th Street

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By Manhattan Real Estate Tracker, July 26, 2024

Photo: Crains New York Business

Trader Joes is coming to Harlem at 123 West 125th Street. This will be their first store in Harlem. The store is 18,000 sq. ft. in size and the company said that over 100 employees will be hired. The 125th Street corridor has transformed over the past 10 years into an amazing blend of local and national retail stores and restaurants. Neighbors to this new store include Whole Foods, Marshall’s, Old Navy, Shake Shack, McDonald’s, Bath and Body Works, Chipotle, Wingstop and Checkers.

Trader Joe’s was founded in California in 1967 and has grown to 571 stores nationwide. There are now 10 stores in Manhattan.

Affordable Housing Opening in Midtown’s Garment District

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By Manhattan Real Estate Tracker, July 2, 2024

The lottery for a newly constructed 19-story building at 339 West 38th Street is open until August 19, 2024. The Department of Housing Preservation and Development states that the apartments in this building have washers and dryers. There is also a lounge, outdoor terrace, fitness center, ping pong center, bike storage, tenant storage, and conference center in the building. The building will also have a 24-hour lobby attendant and two package rooms. Tenants will pay for electricity including electric cooking and heating, the rent includes hot water. The eligible household income range is $31,612 to $218,010. More information can be found at the HPD website at Lottery Details -Housing Connect (nyc.gov)

Photos of 339 West 38th Street from HPD

American Strategic Investment Company to Sell 9 Times Square for a Big Loss

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By Manhattan Real Estate Tracker, June 27, 2024

Manhattan Real Estate Tracker has learned that the financially troubled American Strategic Investment Company (ASIC) has entered into a contract to sell the building at 9 Times Square for $63.5 million. The company will be taking a huge loss on the sale price since according to company records, the property was purchased for $162,291,000 prior to 2015 – a loss of more than $98 million. Formerly New York City Reit trading under the NYC symbol, the company changed the name to American Strategic Investment Company in an effort to purchase property outside of the city. This REIT has been a disaster for investors who have lost a huge amount of their initial investment. The stock went public 2021 and has dropped approximately 90% in value. After paying off the loan, the sale is expected to net only $13.5 million which the company claims will be used to buy other properties outside of Manhattan. The sale price of 9 Times Square reflects how the Midtown office market has plunged since the pandemic resulted in many employees working remotely.

Manhattan Real Estate Tracker spoke with a couple of law firms this week who have shuttered their Manhattan offices giving back large chunks of space to the landlord. Some companies have most of their employees working remotely with only a receptionist and a few conference rooms to meet with clients. Other law firms outside the city in New Jersey and Long Island have also closed offices and are working remotely. The same business model change has also occurred in the insurance industry with many adjusters now working from home.

Michael Anderson, the Chief Executive Officer of ASIC stated, “We expect this sale to generate approximately $13.5 million in net proceeds at closing, which we intend to use to pursue the expanded asset acquisition and diversification strategy into higher yielding assets that was announced last year. Additionally, if completed, we expect that this strategic disposition will strengthen our balance sheet.”

More information on the sale of 9 Times Square can be found on the ASIC website.