Commercial, industrial and residential real estate are more than bellwether sectors of the economy—they are major drivers of growth, employment and prosperity in the United States. The U.S. real estate industry generates $4.6 trillion dollars in revenues per year and employs 17.6 million Americans, according to The Real Estate Roundtable. So, to twist a recent advertising slogan, what happens in the real estate industry doesn’t stay in the real estate industry.
After the bursting of the U.S. housing bubble and the subsequent financial crisis of 2008, over the past few years we’ve begun to see steady improvement in economic conditions. However, and particularly in the real estate industry, this growth has fallen far short of a rebound. Single-family housing starts remain significantly below historic levels; there is a yawning affordability gap, in which millions of families are paying more than half of their income for housing and have no savings; and U.S. CMBS issuances are less than half pre-2008 levels, six years into the current recovery.
Real Estate and Politics
Building requirements for better flood protections have presented owners and managers of more than 1,500 buildings with 90,000 units of public, subsidized or rent-stabilized housing with a dilemma: either pay high insurance premiums or pay high costs to lower them, according to a report called “The Price of Resilience: Can Multifamily Afford to Adapt?” released Wednesday by the NYU Furman Center.
The real estate and planning policy research organization collaborated with industry leaders, nonprofit organizations and government officials to explore the complex obligations that can leave many owners with no way to pay the bills besides switching to market-rate as they grapple with requirements crafted for single-family homes.
Back in March, President Barack Obama proposed changes to the Foreign Investment in Real Property Tax Act, suggesting (A new report from CBRE backs the president’s claims, arguing that the proposed changes could increase foreign investment in a number of major U.S. cities, particularly those with historically lower rates of return on investments, and trickle through Read More
In March of 2010, President Barack Obama announced an ambitious National Broadband Plan designed to take America’s Internet to the next level.
Among other goals, the plan aimed for “Every American community [to] have affordable access to at least 1 gigabit-per-second broadband service to anchor institutions such as schools, hospitals and government buildings” by 2020. Sounds pretty sweet, huh?
Last Wednesday, the White House officially decided that a $4-6 billion proposal to expand Internet access to 99 percent of schools was a “no-brainer,” according to the Washington Post. President Barack Obama has been campaigning for the high-speed Internet initiative in schools all summer long.
“With a relatively modest investment, we could connect 99 percent of schools all across the country to the Internet, and that would expand educational opportunities for students in a really important way,” said White House Spokesman Josh Earnest.
On Tuesday, President Obama visited an Amazon plant located in Chattanooga, Tenn.
“There is no better place to do business than right here in America,” said President Obama during his speech.
the lead indicator
When on the road, Jeffery Hayward often carries a personally customized guide, with the addresses of all the multifamily buildings that Fannie Mae has financed in the area. Then the head of the government-sponsored enterprise’s Multifamily Mortgage Business drives from building to building.
“I want to see what we are financing,” Mr. Hayward told The Mortgage Observer recently, during a series of meetings in his Washington, D.C. office. “I have actually walked a lot of the properties that we financed—I know what they look like, I have seen the tenants.”
Stat of the Week
During his State of the Union address last week, President Obama pushed for renewed investment in the country’s weakening infrastructure.
In the ranking of proposals making the rounds in Washington, this one falls low on the scales of partisanship. Party ideologies aside, the quiet majority in Congress stands to benefit from a program that would see new spending reach virtually every district in the nation. If there is one arena in which policy makers’ individual incentives might trump doctrine, this could be it.
the lead indicator
With the election next week, we thought it was a great time to (very briefly) look at a 20-year time span (which will soon include a total of six presidential elections) in the context of the Manhattan commercial real estate market. Where did the market stand at the time of each election, and what occurred under the stewardship of each president? Real estate cause and effect appears, for the most part, much more local, and doesn’t have a close relationship with the person or party in the highest office. Nevertheless, elections are great reference points.
After the jump, each of our last five elections is listed, showing the overall vacancy rate and asking rent in Manhattan, ending with where we stand today, exactly one week before the next election.
Last Friday’s jobs update showed the national unemployment rate slipped to 7.8 percent in September, the lowest level since the end of 2008. That result prompted former General Electric CEO Jack Welch to posit the Bureau of Labor Statistics numbers – the penultimate release in advance of the November election – had been doctored in the president’s favor.
Erstwhile responsible Senator John McCain gave indirect support to Mr. Welch’s musings saying, as part of a CNBC discussion of WARN Act violations, that he “would not put anything past this administration.” Congressman Allen West added, “Chicago style politics is at work here.” News of the data conspiracy has spread quickly across the Twitterverse. In the age of information, fact, fiction and baseless speculation are each accorded the same courtesy.
As it turns out, attempts to manipulate the jobs data for political advantage have at least one historic precedent. Under President Nixon, the White House compiled a list of Jews working at the Bureau of Labor Statistics. Nixon believed this group might be adjusting data in an effort to undermine his position.
In September 2008, Governor Paterson strode into a Friday luncheon of the New York Building Congress, and pledged he would succeed where the past three people with his job have failed: His administration would carry out the long-desired but ever-elusive plan to expand Pennsylvania Station.
Now, with little heard on the topic since, it Read More