New York Is About To Go Back To Hell
In case you missed the inauguration of DeBlasio, it bode rather badly for real estate in New York. The pastor who spoke, Harry Belafonte who spoke and one of the new department heads all spoke about how New York is a plantation, slavery, the need to redistribute the wealth, raise taxes and wages, and force less quality in schools by ending charter schools and several of the programs Bloomberg initiated which have improved the schools and lives of the minority kids. In addition, the extremely successful police programs which prevented any terrorist attacks from succeeding, and dropped the murder rate to the lowest since the fifties-down from 2300 under Dinkens to 330 in 2013, will be ended. The anti terror programs which kept watch on radical Muslims will be ended. Lastly, there are no existing union contracts in place. DeBlasio owes his election to the unions. There is already a $2.5 billion budget gap to be filled before he gives retroactive raises to the unions, which he says he will do even though there is no money to pay it. It was Guiliani’s policy to clean up the small crimes and enforce the law in a tough way, which led to the broken window policy of fix the broken windows (petty crimes) and then the neighborhood gets repaired and upgraded. DeBlasio supporters specifically stated they want this policy ended. They want petty crimes to be overlooked. That is exactly how New York went into so much crime and problems in the Dinkens era.
Guiliani and Bloomberg did a magnificent job to resurrect a destroyed city, and make it the envy of the world. It is the safest big city in the US and one of the safest in the world. There are more tourists than ever. Formerly desolute and dangerous areas are now thriving neighborhoods with new jobs and taxes being generated. Minority kids actually now have a chance to get an education. Minorities are safer in their neighborhoods than they have ever been and the home values have risen as a result. The subways run efficiently and are more used than ever. The air is cleaned up. The streets are cleaner than ever and panhandling is almost non existent. In short, the city has never been in better shape. DeBlasio and his friends derided this at the inauguration and railed against the success of the city. It was all quite astonishing and very bad for the future of New York. This group makes Obama look right of center.
If you are a real estate owner in New York, you will be in for an unpleasant four years. Development of high end assets will be stymied at every turn. It will be much more costly and getting approvals will take far longer unless you want to build housing for the homeless. Everything you knew to be the reason to invest in New York for the past twenty years, just went out the political window.
For real estate investors, you need to take a step back and see where this all goes. Luckily only the state can raise taxes. That is not likely to happen because Cuomo wants to be president and doesn’t want to raise taxes. However, everything else is subject to the mayor and city council and the council is now controlled by the left wing.
It is going to be a long four years of a socialist experiment which will go very badly. Real estate is going to bear the brunt.