Impact of Bill de Blasio’s Loss of Power on NY Real Estate- The Real Deal

Mayor Bill de Blasio

“The most charitable assessment,” Neal Kwatra said of Mayor Bill de Blasio last week, “is that his mayoralty is currently on life support.”

The remark, made to the New York Times, was devastating not just for what it said but for who said it. Kwatra is a Democratic strategist steeped in New York politics who has worked for de Blasio and whose most important client, the Hotel Trades Council, is a de Blasio ally.

That Kwatra had reasons to downplay de Blasio’s problems but chose not to illustrates the magnitude of the moment. Police-reform backers were first galvanized by the killing of George Floyd, then infuriated by the mayor for defending the NYPD as it pummeled, pepper-sprayed and arrested protesters. The damage to de Blasio’s political capital was severe because the reformers were his base, leaving him with no clear constituency.

That’s bad news for real estate, industry insiders say.

“Developers are nervous,” said George Arzt, a publicist and political operative whose clients include Extell Development, Gilbane and Lendlease. Some are refraining from taking projects through the rezoning process, he said, “because they’re unsure of the politics in this city [and] unsure of the clout of the mayor, especially as he heads toward his lame-duck year.”

Others were even less generous.

“His political capital being completely obliterated certainly doesn’t help the real estate wheels go forward,” said one representative of a major developer, speaking anonymously because the firm has business before the city.

And development was not a priority for de Blasio in the first place, the source added.

The mayor’s office did not respond to a request for comment.

Indeed, de Blasio’s political demise dashes any hopes that he might rescue his housing plan, which began in 2014 with the goal of adding hundreds of thousands of market-rate dwellings, as well as 80,000 income-restricted ones. It hinged on $8 billion in subsidies and neighborhood rezonings that increased density, sparing developers from trudging through the city’s land-use review process for every large project.

The rezonings lost momentum first. Individual Council members in the South Bronx and northern Brooklyn claimed – in defiance of the laws of economics – that adding supply would increase rents. The mayor gave the members a pass, rather than call them out and risk his standing with their constituents.

That was an example of the lack of “leadership” that his former deputy mayor Alicia Glen, the architect of his housing plan, referred to repeatedly during a June 3 TRD webinar, albeit without mentioning de Blasio by name.

Then the subsidies vanished, a victim of pandemic-related, de Blasio-proposed budget cuts that Glen called “one of the most short-sighted things I’ve ever seen,” because the funding would leverage much…

Read MoreImpact of Bill de Blasio’s Loss of Power on NY Real Estate- The Real Deal

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