Imagine New York with no real estate



You probably missed Comments by Andrew Cuomo, July 28 Association for a Better New York, one of his last gubernatorial acts before announcing his long overdue resignation… Cuomo stepped down as governor (I know I just wrote this, but it’s interesting to repeat it), but this speech was a telling sign of how deeply concerned New York’s political and economic elite are about the economic implications of telecommuting – and how few decisions that they have, besides forcing people back to offices that they no longer need.

Manhattan’s skyscrapers may not match Borders bookstores, your local newspaper, and other businesses ruined by online alternatives. But it is clear that Zoom poses a serious threat to commercial real estate developers who have seen New York. property value almost tripled over the past twenty years. This, in turn, is a major problem for cities like New York, which have become precariously dependent on rising property values ​​as their primary engine of economic growth and tax revenues.

Of course, this urban model has led to a steady rise in rents, leaving ordinary New Yorkers in poverty and displaced from their homes. Thus, the real estate crisis is also an opportunity for socialists to put forward a different vision of the future of the city, aimed at serving the people who actually live here, instead of trying to replace them with higher-paying clients.

The picture for the New York City commercial real estate sector – hotels, shops, restaurants and entertainment venues, and most of all, offices – is ominous. It seems highly likely that many jobs will continue to allow many employees to work remotely for at least part of the week. With fewer employees working in a centralized location every day, companies will be looking to consolidate their office space to save on rental costs.

Now The newspaper “New York Times reports that vacancy rates in Manhattan’s Financial District and Midtown – the two largest business districts in the country – have doubled since the start of the pandemic and are up 20 percent even since the beginning of the year. This vacancy rate will only grow in the coming years as another 14 million square feet of office space is under construction.

Few Jacobin readers will cry over the owners of these office towers, but commercial property taxes account for roughly a fifth of New York’s tax revenue. As changes in property values ​​gradually move towards taxation, the increase in office vacancies may not immediately affect the city’s coffers. But if the value of commercial property plummets, it will hit the city’s revenues hard.

A glimmer of hope for office building owners as Samuel Stein recently noted JacobinIronically, the tech giants that have profited a lot from telecommuting are also renting and building a lot more office space. The problem is that many of these firms vanguard of private sector companies responding to employees’ demands for a constant transition to at least partially remote work. As tech companies become more of a downtown and downtown office space, their work culture, including low office density and part-time work from home, is likely to have a greater impact on nearby employees working in the city. banks or law firms.

“The authorities need to understand that this experience, which we all went through, had the same great influence on our ideas about life as any other world event in history,” says Jared Spataro, Chief Executive Microsoft, which announced that most employees can continue to work remotely for up to half of their working hours. “If you then try to run the company like in 2019, employees might say, ‘I have changed and you have not? “Then I think I need to make a change.”

Spataro and other tech executives are likely untouched by Andrew Cuomo’s call for businesses to get employees back to work full-time for the local economy. They do not seem to have been influenced by the April decision of Mayor Bill de Blasio. get city employees to return to their Manhattan offices, a move that was supposed to “send a powerful signal for the rebuilding of the city.”

Rather than face the inevitable change directly, teleworking will bring to the city, built around huge towers of booths, Cuomo and De Blasio seem to be hoping that New Yorkers will be so eager to “get back to normal” that they are willing to come back. hell rides that the last eighteen months have been largely unnecessary. But trying to get millions of workers back into overcrowded subways and overcrowded offices, even as the number of COVID cases is skyrocketing, makes it less likely that it will return to normal soon.

The Food and Drug Administration (FDA) is expected to finalize the Pfizer vaccine next month, which will likely speed up vaccinations and give local authorities more authority to impose vaccine requirements. But don’t expect New York’s political class to wait until November, when these changes can have an impact – just like De Blasio refused to provide distance learning this fall, even if students under the age of 12 are not eligible for vaccination. In what has become painfully familiar history during the course of this pandemic, these Democrats are loudly lecturing vaccine deniers about the dangers of the Delta option, while insisting on premature full disclosure that challenges science and major public health concerns.

In the face of an unprecedented technological challenge from mainstream New York City, the local planning elite are urging the same.

“The city should attract people for reasons other than coming to the office,” says Katherine Wilde of New York Partnership, a business association founded by David Rockefeller. “The ability to work remotely means New York City needs to compete more fiercely to attract and retain residents – especially the educated and highly profitable – than ever before,” says the Conservative. Manhattan InstituteArpit Gupta. New York is “in international competition” for high-yielding remote workers, Cuomo said, and can benefit from lower taxes and tough measures to combat crime and homelessness.

This is classic neoliberal urbanism, which sees cities not as communities but as sports teams competing to attract expensive free agents, and seeing the many poor and working class who actually live there as a major problem that needs to be addressed (preferably through getting rid of from them). None of this should change with the likely replacement of Mayor De Blasio by Eric Adams, whose commitment to enhancing law enforcement and tax breaks for real estate developers is impeccable.

Stein expects Adams to use the commercial real estate crisis to call for even more “tax breaks and tax-cut strategies,” including the notorious 421a tax exemption, which was supposed to boost affordable housing growth, but was instead $ 1.7 billion giveaway to luxury goods developers… “These programs tend to have a self-reinforcing logic,” Stein says, “when in bad times they say, ‘We need these breaks, otherwise we can’t afford to keep going.’ And in good times, they say, “It’s too expensive to work without tax breaks.” So any real estate policy that is worth billions of dollars in good or bad times is a problem. “

Who will fill these new office buildings? We may not like the neoliberal policies of making wealthy people live in New York with the promise of low taxes and brutal police, but at least we can understand their logic. But what does tax breaks and homeless sweeps have to do with getting people to unnecessarily travel to centralized business districts every day? By pushing for a return to full-time office work, Cuomo and De Blasio are essentially calling on the public and private sectors to subsidize the real estate industry with artificially high rents and millions of unnecessary hours spent by their workers in crowded and infectious offices. , trains and buses.

The good news, Stein notes, is that these important questions about the future of New York arise at a time when “the working communities are saying, ‘We’re not going to accept the status quo of massive corporate giveaways.’ to build things in our neighborhoods that we cannot afford, and we are just told to be happy because it brings more income to the city, which ultimately comes back to us in the form of programs. ” In recent years, there have been elections for the state legislature – and soon the New York City Council – for socialists who campaigned strengthening tenants’ rights and government land use policy; strengthening the fight against gentrification plans to change zoning; and historic victory in 2019 this stopped a massive giveaway for Amazon’s second headquarters.

While even Andrew Cuomo is asking business leaders to invest extra money for the greater good, the left can argue that we will take these corporate contributions in the form of higher taxes that can be distributed democratically rather than artificially. high rents to bolster wealthy real estate titans. And Cuomo’s replacement, Katie Hochul, could sign Decent Housing Act for Our Neighbors passed by the legislature in June, allowing New York State to fund the conversion of vacant hotels and office buildings into affordable housing.

Just as important as these legislative decisions are numerous labor disputes over telecommuting in the months and years to come. After all, at the heart of the commercial real estate crisis is employee reluctance and sometimes refusal to return to jobs they consider unsafe, unnecessary, or both.

The gap between workers whose jobs may and may not be done from home has put workers on opposite sides of the huge income and mortality gap during this pandemic, and similar violent fights could arise between office building workers who wish to continue working remotely. as well as maintenance and cleaning workers who fear dismissal.

This is a complex picture. But what should be clear is that we are not yet close to “getting back to normal,” and this is especially true of the office towers that have long defined New York’s skyline and economy.

Of course, this is not just a New York story. Stein writes in Capital: gentrification and state of real estate that worldwide real estate accounts for an astounding 60 percent of the world’s tangible assets. But it only adds to the importance of whether New York’s burgeoning socialist movement will be able to wrest control in the coming years from the developer kings who have long been in power. To paraphrase song from the beginning of this dying eraif we take it here, we take it anywhere.


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