GATEWAY PERSPECTIVES: Dark Clouds Can Lead to New Opportunities

Richard Haggerty | February 19, 2019

2018 was a solid year for real estate in the lower Hudson Valley. However, as the year progressed, we did experience slowly declining sales numbers. Whether this had to do with prospective purchasers having concerns about the SALT deduction limits is probably too early to tell, and we should have a better feel when we see the first quarter sales numbers in the beginning of April.

Unfortunately, I do see some dark clouds on the horizon and we need to aggressively work with all stakeholders to arrive at solutions to ensure the viability of continued economic growth in our area. The proposed gas moratorium for new customers for two thirds of Westchester County is one of the dark clouds. I think many of us are wondering how did this crisis just seem to appear out of the blue? However, the bottom line appears to be that either we start providing for the creation of new gas pipeline infrastructure, or we find other energy sources to fill the gap. If we fail to do that here are the grim consequences according to Westchester County Executive George Latimer:

• Lost Rental Income- $576 million/year
• Lost Construction Jobs—Multifamily Projects- 25,000
• Lost Number of Residents- 48,000
• Lost Number of New Residents to Westchester County- 20,000
• Lost Commercial Rental Income- $60 million/year
• Lost Number of Permanent Retail Jobs- 5,000-7,500
• Lost Number of Construction Jobs—Commercial Projects – 3,500

These are scary numbers, and some of these projects have been years in the development pipeline, and to see them derailed in the final stretch would be painful indeed. HGAR moved its headquarters two years ago to make way for a large multi-family development. Currently it’s a big hole while the developer get’s final approval on new plans. I hope it’s not destined to be a block-sized hole in the ground for the next 10 years. To be clear, this is not just a Westchester issue—the same type of moratorium is reportedly being discussed for Long Island. We need to find solutions now and not engage in finger pointing and posturing.

Speaking of finger pointing and posturing, I think that Amazon’s cancelation of plans to build a second headquarters in Long Island City is another dark cloud. I don’t want to take sides on who’s right or wrong in terms of the politics of the deal, but I do believe that it sends a negative message to those companies that maybe interested in relocating to New York. Again, we need to learn from our mistakes, get all of the stakeholders at the table, and figure out how to stimulate responsible economic development that truly makes a positive impact for everyone, not just a select few.

The final dark cloud has been hovering for sometime, and we need to take the proverbial bull by the horns. We have an affordable housing crisis in the New York City and the greater suburban area, and it continues to be a drag on economic development and sustainable growth. The shortage of affordable housing has a significant impact on our workforce, and ultimately drives residents away. One part of the solution would be enacting NYSAR’s first time homebuyer’s savings account program.

From my perspective the dark clouds pose challenges, but they also pose opportunities–opportunities to create new dialogues and engage new stakeholders. However, we need to move forward aggressively and in a spirit of innovation and cooperation. One thing that I am sure about is that we are not going to solve these problems with finger pointing and posturing in the press—we need to have real, substantive and immediate engagement on these issues to arrive at viable solutions.

Richard Haggerty