34 minute read
The Articles
Condo-Co-op Helpline: Easements and Development
One call that managing agents dislike receiving is from a board president who is facing outraged unit owners or shareholders about to lose lot line windows. Often, there is little to do but work with the developer to close off the windows with fire-proof material such as brick and block and sheet rock and paint the new wall area.
The time to try and save lot line windows is not when the developer is knocking on the door, but before the property is in that status, when the owner might be willing to sell an easement prohibiting developing five feet or so from the wall with the lot line windows. Buying the air rights is relatively straightforward.
An easement is a right owned by one property owner that benefits his or her property at the expense or inconvenience of the other property owner. One example of an easement is a shared driveway. Generally, for an easement to be enforceable, there must be two distinct properties with distinct ownership; the benefit conferred to the first property by the second property must be real estate-related. An easement may not be used to a personal benefit, such as a loan, job security or gift. Finally, the easement must be well defined and narrowly stated so that the burdened property owner remains in control of the property.
A properly drafted easement may be used to limit the height or location of a building on the burdened property to protect the adjacent property lot line windows or provide a second means of egress for the adjacent property.
Note: Easements may lapse over time. Consider the following scenario: a developer owns two parcels of land that are contiguous. To make construction efficient and avoid disturbing a tenant in an existing building, the developer merges the lots using the consolidated floor area ratio (FAR) to build a larger building on vacant property. Following construction, the parcels are separated. At that point, the new building has the extra FAR. The developer protects the new building with an easement that restricts the use, height, density and/ or location of any new building on the now separate lot.
A few years later, both properties have new, distinct buyers. The owner of the restricted property now applies to the Department of Buildings for a building permit for a full-height, full-density building up to the property line. The proposed use is not consistent with the easement terms.
The property that holds the easement restricting the use, size or location of the proposed new building must act. The steps would likely include sending a demand letter to the developer pointing out the terms of the easement, notifying the New York City Department of Buildings that the easement is being violated and, if necessary, seeking a declaratory judgment and permanent injunction against development of the restricted property beyond the terms of the easement.
During the pendency of the injunctive proceeding, it is possible that the moving party that holds the easement rights may have to post a bond to secure the temporary or preliminary injunction. However, no bond will be requirement for the permanent injunction.
The amount of the bond will vary with court’s initial assessment of the easement. The clearer and more specific the easement, the more closely the proposed injunction tracks the express language of the easement, the less the court will be concerned with damages to the developer.
Developers will use the threat of damages to block enforcement of easements. They will also argue that the easement is overbroad, unclear or abandoned. However, New York Courts will generally enforce an express easement based on its express terms.
How can a developer not comply with an express easement that restricts development? Sometimes, the developer is careless in its due diligence and misses it. Or the developer thinks he can bluff or threaten a neighbor into accepting a building that is inconsistent with the terms of the easement. Some developers hope that the holder of the easement has “forgotten” and will not try to enforce until it is too late. Easement enforcement can be blocked by the doctrine of laches (which bars a party from raising a claim due to an unreasonable delay), so if you own an easement that restricts development, assert it as early as possible.
Sophisticated developers will sometimes try to negotiate with the easement holder for modification of the easement. As with the purchase of an easement noted above, this is a real estate transaction for which you will need appraisals and counsel to help you.
This column presents a general discussion. This column does not provide legal advice. Consult your attorney for specific legal advice.
Carol A. Sigmond Greenspoon Marder LLP 590 Madison Ave., Suite 1800 New York, NY 10022 carol.sigmond@gmlaw.com (212)524-5074
2022 Hurricane Season Preparedness For Your Real Estate Business
By Frank DeLucia, senior vice president, Hub International Northeast
From flood waters, property damage and power loss to spoiled food, coping with the aftermath of a powerful storm could be very troublesome for real estate owners and operators. During the Atlantic Hurricane season, which officially runs from June 1 through November 30, real estate businesses must take a multipronged approach to safety. This begins with crisis communications, management and business continuity planning, followed by back-up efforts with the proper insurance coverage.
In 2021, there were 20 separate billion-dollar weather and climate disasters. The total cost for these events was $145 billion, according to the Colorado State University Tropical Meteorology Project. For this year, its team predicts an “above-normal” Atlantic hurricane season with 19 named storms, including nine hurricanes, four of which will be major hurricanes.
Taking the proper steps before a hurricane can lessen the impact. Generally, the three main goals of any disaster management plan are to manage the business during the crisis, resume normal operations as quickly as possible and recover losses when it is over. By taking these goals into account when surveying the most critical areas of the business, companies can determine what steps to take to be fully prepared for hurricane season and beyond.
Having a crisis communications, management and business continuity plan in place will help ensure employee stability. Pre-determined employee notification channels will be critical to disseminating information. Similarly, understanding individual risk is key to necessary business continuity planning. Try isolating the business risk first. Is it wind, power outage or hurricane damage? Will your business be down for a week, a day or a month? Review your business assets and make sure the most critical operations have built-in redundancy or are covered by insurance.
It’s important to examine insurance policies (and any potential gaps in coverage) in advance with your advisor, as there are a variety of policies to help coastal and non-coastal businesses recover from an event — each involving a different aspect of the restoration.
Business Income Coverage
Review your business income coverage limits, which include loss of income as a result of an event, to ensure they are sufficient. Extra expense coverage often accompanies business income coverage for necessary costs, such as temporarily relocating business operations.
Flood Coverage
Most business property policies exclude flood coverage. In addition, businesses typically buy minimum flood coverage limits, but don’t consider that floods can come from even minor storms or no storm at all.
Note: The Federal Emergency Management Administration (FEMA) has rolled out a new risk methodology for flood insurance pricing called Risk Rating 2.0, resetting flood insurance rates for the first time in decades. As of April 1, this revised rating methodology for National Flood Insurance Program (NFIP), flood policies applies to all policies, new and renewing.
In addition to elevation, the location of machinery and equipment and the cost to rebuild, the new structure accounts for flood frequency, distance from a water source and the likelihood for multiple flood types such as river overflow, storm surge, coastal erosion and heavy rainfall.
Examine Deductibles
What type of deductible do you have on property coverage — percentage or flat? Calendar year or occurrence? If your business has a lot of locations, occurrence or percentage deductibles could be more costly. Additionally, many policies will have lower deductibles for wind and hail events than for a named storm.
Currently, the insurance market is very turbulent with rate increases across the board. Insurance carriers are much more strict regarding inspections and recommendations.
With your insurance advisor, demonstrate why the marketplace should want your business:
• Proactive on safety to reduce claims. • Proactive on contractual risk transfer. • Demonstrate property upgrades where possible, i.e., roof, electrical, plumbing, etc. • Implement outstanding recommendations from previous insurance carrier inspections. • When implementing risk control measures, first consideration should be given to improvements that have the greatest influence on loss severity. • Regarding past losses, be prepared to explain corrective actions taken.
Hurricanes can pose a major challenge for the real estate industry. By taking the appropriate steps ahead of time and working with experts, real estate companies can help to ensure that they can weather any storm. Review your policy with an experienced insurance advisor now.
Frank DeLucia Hub International Northeast Woodbury, NY frank.delucia@hubinternational.com (212)338-2395
Direct-Owned Real Estate in an IRA
By James M. Philbin, CPA, PFS, MST, CFP, partner, Marcum LLP
Assets in individual retirement accounts (IRAs) totaled $13.9 trillion at the end of 2021. As of 2020, there were over 28,000 individuals with IRA accounts exceeding $5 million. IRAs are generally invested in financial assets, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs). Another investment option is to hold directly-owned real estate. Direct-owned real estate refers to properties in which an investor (or subsidiary company) has a fee or tenancy-in-common (TIC) ownership of the property.
Real estate held in IRAs can also create unique planning challenges not normally associated with traditional investments. Direct-owned real estate must be held in a self-directed IRA as an alternative investment accepted or offered by a qualified custodian, an entity specializing in self-directed accounts that may manage the investment and complete required financial and tax reporting, including IRS Form 5498, IRA Contribution Information. The real estate property must be solely for investment and not used as a vacation or second home, or as an office for a related business. These rules apply to the owner of the IRA as well as to related people deemed disqualified by the Internal Revenue Service, including the owner’s spouse, parents, children, grandchildren, service providers of the IRA and any entity that owns more than 50% of the real property.
Purchasing real estate inside of an IRA is easiest when doing so with 100% cash. Financing the transaction is possible but adds a layer of complexity. Financing the property could subject any rental revenue from the property to be considered unrelated business taxable income (UBTI). UBTI is a tax on income from a trade or business that is not significantly related to charitable, educational, or other designated purposes of an exempt organization. UBTI applies when the earned income is over $1,000.
If the self-directed IRA uses a non-recourse loan to buy the real estate, the debt-financed part of the profits is subject to UBTI. The profits generated from the non-recourse loan’s percentage of ownership would be taxed. This would be considered Unrelated Debt-Financed Income (UDFI), or income derived from the use of “acquisition indebtedness” in the self-directed IRA. “Acquisition indebtedness” is income from a property where debt is acquired during the purchase of the property.
There are certain instances where UBTI does not apply, including when investing in a subsidiary entity taxed as a C Corporation. The C Corp (or an LLC electing to be taxed as such) will pay any income tax associated with the net rental real estate income. Since the entity will have already paid any required tax before paying out any dividends to the IRA, the distribution would be tax-deferred or tax-free depending on the type of IRA. UBTI would not apply if, instead of the IRA investing directly into the property, it makes a loan to another real estate investor. The loan can then be secured by a lien on the property. Also, when property is not leveraged and was acquired via direct purchase, UBTI would not apply to its rental Income. Despite the myriad rules and requirements involved with holding real estate in an IRA account, there are benefits. Real estate helps diversify a portfolio, often moving counter to financial markets. Real estate has historically appreciated over time, ideal for an IRA’s longterm investment horizon. Real estate can provide a steady income stream from rents, and any rental income collected grows tax-free within the IRA.
The drawbacks are that a self-directed IRA needs to be set up with a custodian, and deductions for property taxes, mortgage interest, depreciation and other property-related expenses cannot be claimed unless a C Corp entity is used. In addition, all expenses, repairs and maintenance costs and third-party management fees must be paid with IRA funds, hopefully, and a net of rents to cover.
IRA owners subject to annual required minimum distributions (RMDs) and holding direct-owned real estate need to be mindful of the overall liquidity of aggregate IRA holdings. The real estate portion may not have available funds for distribution and the investor will need to draw from other IRA sources.
It is also important to emphasize that the owner of the IRA and their relatives can’t live in or run a business out of the property.
James M. Philbin Marcum LLP Boston, MA james.philbin@marcumllp.com
Deb’s Retail Dish and Deals:
A SEASON OF CHANGE
In pre-pandemic years, one of the highlights of the annual ICSC conference in Las Vegas was Marcus & Millichap’s industry overview. The pandemic shifted the event online and a bit before the conference, a format and timing the firm kept in 2022 as we all prepared to gather in person again for the first time in three years.
The lingering effects of COVID-19 were an early topic for discussion.
“Everything has changed, and everything has continued to change,” said Hessam Nadji, president and CEO of Marcus & Millichap.
Unlike the last major crisis, the Great Recession of 2008, quick and massive intervention helped save the day. Government response in 2008 took 13 months and totaled 6% of gross domestic product (GDP). In 2020, the response came in seven to eight weeks and ultimately totaled 26% of GDP. Also remember, Nadji said, that the economy was in much better shape in 2020 than in 2008.
Two years out from a global shutdown, the jobs that were lost have been recovered and the U.S. is almost back to full employment, he continued.
And yet — inflation, the result in large part of so much money being injected into the system with few places to spend it during quarantine, as well as supply issues and the ongoing war in Ukraine.
Even so, inflation is better than undershooting the stimulus, which could have resulted in a depression during the pandemic, he observed. Though the Federal Reserve Board will have to be “very aggressive” to bring inflation back down to a range of around 2%, “This is a good problem to have.”
Remember, he noted, that even if interest rates rise quickly, they’re still well below historical averages (other speakers at the event noted that they could be a full point higher by this time next year). And, unlike 2008, the economy is not dealing with a troubled banking or housing system; fundamentals are strong.
And as we have found a way to cope with the virus, and the world has reopened, we are seeing changes in retail real estate as people return to stores while remaining committed to online shopping. More stores opened than closed last year, a welcome reversal from previous years.
“We’ve seen people who didn’t use e-commerce use e-commerce now,” Nadji said, so physical retail will really have to up its game to compete. “What’s really important is that the experience of retail, fitness and food that was on fire before the pandemic will be on fire now. That is normalcy. You’ll see an explosion of experiential retail.” The day-to-day retail also will remain strong, as noted in the report that accompanies the annual presentation.
“Necessity retailers, value stores and restaurants with drive-throughs will continue to perform well, while other, more buffeted concepts are poised for a comeback. Improving leisure travel and anticipated office returns will boost foot traffic in commercial hubs and tourist destinations,” the report said.
Investors should, in fact, be looking for lower-tier, tired shopping centers that can be reinvented, Nadji said.
“We cannot judge the retail book by its cover,” he observed.
There are headwinds, the report said. Supply chain issues continue to restrict inventory, limiting retail growth as it can’t keep up with pent-up consumer demand. Service-oriented retailers still face staff shortages and unexpected absences.
As interest rates continue to rise, capital remains constrained for ground-up development. Redevelopment is key in the current environment. Investor demand is back to pre-pandemic levels, especially for properties in the Sunbelt and for proven single-tenant assets such as large fitness centers, auto part stores and fast-casual restaurants.
It was an interesting start to what will be a fast few days of reconnecting and, with luck, a lot of dealmaking. I’ll keep you posted.
Debra Hazel Debra Hazel Communications North Las Vegas, NV (201)618-5247
“Good Cause” and Effect: What Good Cause Eviction Means for NYC Landlords
By Robert Rahmanian, principal of Real New York
New York State’s legislature has been considering a bill that would require “good cause eviction,” which would set rent increase limits and allow for automatic lease renewals in most circumstances. This legislation had been introduced previously by state Senator Julia Salazar of Brooklyn and Assembly Member Pamela Hunter of Syracuse in 2019 and 2021, without coming up for a vote.
Given recent market conditions, including a spike in rent prices coupled with the recent end of New York’s eviction moratorium, the momentum is building for city council members and other elected officials to do something to help struggling tenants cope with the high and continuously increasing cost of living. But what about landlords?
What is Good Cause Eviction?
The Good Cause Eviction bill, should it pass on a statewide level, would guarantee tenants in market-rate leases the right to a renewal, so long as they pay on time and remain in compliance with their traditional lease agreements. The bill would also make it more difficult to fight evictions that are contingent upon rent hikes above 3% per year.
This legislation could very well apply to nearly all rental buildings with few exceptions and would also require landlords to propose their desired rent increases in court to ensure it is reasonable. This, along with many other elements of the bill, presents a multitude of limitations for landlords which will trickle down and result in additional issues that will ultimately affect tenants as well.
How exactly will this bill affect tenants and landlords?
1. Reduced inventory: If this bill goes into effect, there will be an extreme reduction in the amount of housing available for renters because there will naturally be less turnover with existing tenants. 2. Less affordability and lower quality: While one of the elements of the bill is to cap rent increases, this does not necessarily mean that rents will be affordable. In fact, it will result in the total opposite, forcing landlords to raise and keep rents extremely high due to the reduced inventory, which is already very low in the current market. Due to the bill’s proposed rent caps and policies surrounding traditional lease agreements as we know it, homes will end up priced well below market rate for many years throughout a tenancy, which can negatively impact building operations. Rents need to increase to coincide with higher costs of living, services, vendors and compensations for building staff. This means fewer repairs and upgrades due to lack of funds. 3. Value depreciation and tax increases: A property or building’s value will plummet, and fewer properties will sell and/or trade.
This will lead to a huge decrease in the taxes that the city receives on an annual basis, which is not good for any New Yorker.
What can be done to prepare for the possibility of Good Cause Eviction?
New York City is facing a very serious and real housing shortage, and if Good Cause Eviction passes, it will only exacerbate the issue further. These types of regulations can have a negative impact on affordability in an already high cost of living location. In turn, rent will continue to skyrocket as housing supply dwindles. Real New York is advising landlords in various creative ways, including building micro roommate apartments for transient clients as well as pricing smart, with higher gross rents paired with complimentary months.
What’s next for Good Cause Eviction?
Recently, Rochester’s City Council voted against Good Cause Eviction, making it one of the latest as well as largest municipalities to reject this bill. Several other localities in New York have supported or passed some form of this under their own jurisdictions, however Rochester’s failure to pass the bill indicates the reduced plausibility of it on a statewide level.
The legislation as it currently stands would result in higher property taxes, higher rents, lower inventory, more court hearings and other adverse effects on landlords and tenants alike. However, the probability of this bill being revisited in its current form in the near future is still on the table, so it is important for all property owners to take the appropriate measures now to ensure economic stability and safety.
Robert Rahmanian Real New York 164 Ludlow St. New York, NY 10002 robert@realnewyork.com
Lessons Learned from the Pandemic
So, what have we learned in the more than two years of the pandemic? It’s been a time when we had to quickly adopt new systems and procedures to fight COVID-19, analyze what we had in place and move forward. In doing so, we saw that many of the established procedures helped and we found areas where we could improve. The result: property managers found innovative ways to manage and upgraded systems to help keep residents and staffs safe and healthy.
When the pandemic initially hit, a supply drought created supermarket shelves bare of toilet tissue and paper towels as well as many cleaning and disinfectant products. Those were the days when it was thought the virus could spread by touching a surface. Matthew Adam Properties represents many institutions which have protocols to maintain sufficient supplies. This contrasts with many properties that utilize just-in-time deliveries. We had sufficient supplies on hand for these properties. Importantly, we also had relationships with suppliers of the products and the supply chains, so we could ramp up orders faster than most. We were experienced in ordering and getting the essentials to the buildings as rapidly as possible.
The institutions also had procedures in the event of an emergency, such as elevator protocols that we were able to immediately adapt to our other properties. We quickly established requirements for masks, screened guests based on rules established by the board and significantly increased the cleaning of all public areas, including gyms, meeting rooms and children’s playrooms. We are continuing this increased cleaning. In adopting procedures, we followed recommendations from the NYC Department of Health and the Centers for Disease Control.
By the way, as part of our green initiative to help maintain a healthy environment for residents and staff, several years ago we adopted the use of non-toxic products in many of our buildings. Residents and staff have overwhelmingly supported this effort.
Going forward, we must remain vigilant as we may not have seen the last of COVID-19, with the possibility of unknown new variants. I believe that in the future we will manage COVID-19 as we now manage the seasonal flu, always aware of its presence and taking the necessary steps, including vaccinations, to prevent serious illness and hospitalizations. This requires us, and everyone, to be proactive.
Another area where we learned much is with Zoom meetings. We find them more productive than in-person sessions and easier to have a quorum. Now, rather than requiring attendees to be physically present, those participants who are away on business or personal trips can join the meeting. This reduces the need for postponements. The meetings, interestingly, have become more businesslike with reduced chatter adding a new level of professionalism and fewer interruptions. We email the board package prior to the meeting, giving board members an opportunity to review the material prior to the meeting. We have also successfully held multiple annual meetings via Zoom for many of the same reasons we made the switch for board meetings. We have found that attendance is greater, as it is more convenient for residents to join via Zoom rather than leave their apartments to go to a meeting, often held off site. Again, this allows people who are out of town to participate and increases transparency.
One final note: We are grateful to the staffs of our buildings and to the employees of Matthew Adam Properties for their performances in this most trying of times. From the beginning, staff at our properties adjusted and went the extra mile with the new guidelines for visitors and residents as well as helping those who were homebound and needed assistance.
The years of ongoing training along with the relationships built up with individual employees contributed to the overall quality and caring performances. There were many examples of individual staff members going beyond their normal duties to assist residents. Our staff at Matthew Adam Properties, back-office, administrative and asset managers all met the challenges of the pandemic as we were able to keep building operations functioning.
Ira Meister President and CEO Matthew Adam Properties, Inc. 375 Pearl St., 14th Floor New York, NY 10038 (212)699-8900 imeister@matthewadam.com
Six Ways to Appreciate — and Share — The Value of the Backyard
By Kris Kiser, president & CEO of the Outdoor Power Equipment Institute and the TurfMutt Foundation
By using and caring for the green space around our homes, schools, municipal parks and other managed areas, the outdoors can be available to anyone at any time. If we have learned anything in the last few years, it is the stress relief and health benefits available through connecting with nature.
Understanding and supporting our natural world starts at our own backdoors. The following tips will help all homeowners appreciate the value of their backyards, parks, school yards and other managed green spaces, year-round.
Think of the ways you can move activities normally done indoors to the out-
doors. From playing to working and from exercising to dining, more people are finding their front and backyards are an extension of their home. Consider what you can take outside instead of settling for the artificial light and closed spaces of our indoor areas. They’re wonderful in inclement weather, but the outdoors is terrific for grabbing some Vitamin D, fresh air and stress relief.
Create a five-star event space. The pandemic made traditional celebrations and gatherings challenging. But the outdoors came to the rescue for events. Now we all know the family yard and community park are five-star event spaces that are always easy to book for graduation parties, family reunions, birthday celebrations and holiday gatherings.
Utilize the best video call backdrop, nat-
urally. No need to turn to technology when outdoors. The natural setting created by your yard’s living landscape — trees, flowers, bushes and other plants — is the best video call background, bar none.
Enjoy a truly “green” spa. The healing power of nature is only a few steps away. Let stress blow away in the breeze as you swing in a hammock. Clear your mind with a few breaths of fresh air. Meditate to the sounds of nature. Do yoga to the soundtrack of songbirds. Make your lawn your exercise mat.
Explore a living laboratory. Your backyard or park is an active and growing place for learning even when school isn’t in session. Take online classes under the shade of a tree. Do homework at a patio or picnic table. Brush up on STEM education by planting and studying flowers, insects, wildlife and weather watching.
Sign up for Mutt Mail, a monthly e-newsletter with backyarding tips and all the news from the TurfMutt Foundation. To learn more about creating the yard of your dreams, visit turfmutt.com.
Kris Kiser Outdoor Power Equipment Institute 1605 King Street Alexandria, VA 22314 turfmutt.com opei.org (703)549-7600
Set the Stage for Backyarding
Creating a yard that supports all aspects of your family’s outdoor lifestyle means taking stock of what you might need to care for your green space. Take an inventory of your yard, your individual needs, landscape and equipment needed to care for it to make sure your space will always be there for backyard memory-making. Then follow these steps from the TurfMutt Foundation to set the stage for backyarding.
Plant with purpose. Location, maintenance, sunlight and watering needs should all be considered, as well as your climate zone and lifestyle.
Select the right grass. There are hundreds of varieties of turfgrass, and some of them — like Buffalo and Bermuda — even do well in drought-prone areas and also will survive foot traffic, children’s play and pets.
Mix native plants with adaptive plants
and grasses. In man-made cities and suburbs, we must incorporate plants in areas with a lot of concrete, asphalt, people and traffic. You will need to utilize both native plants and drought-resistant adaptive species that can thrive in these conditions.
Keep pollinators in mind. Remember that bees, butterflies, bats and birds are backyarding, too. Your yard and our community green spaces are part of the connected ecosystem that provide food and shelter to them, year-round.
Plant to slow and capture water. Grass and plants slow down and capture the water that sheets off hard surfaces in cities and suburbs, recharging underground aquifers.
Water wisely. Only water your yard when it is necessary. Install watering solutions — like smart controllers on irrigation systems — to help you use less water while maintaining a living landscape.
U Und nderstanding tax planningerstanding tax planning can be a taxing experience. can be a taxing experience. It requires a dynamic knowledge of ever-It requires a dynamic knowledge of everchanging codes and regulations, plus a deep understanding of your individual needs and goals.changing codes and regulations, plus a deep understanding of your individual needs and goals.
That’s where Janover comes in. We get to know both you AND your business. We then leverage That’s where Janover comes in. We get to know both you AND your business. We then leverage our knowledge of the system to tailor a detailed tax plan that is unique to your specific needs.our knowledge of the system to tailor a detailed tax plan that is unique to your specific needs. At Jan At Janover, our greatest value is the ability to help you look at the whole picture - numbers, over, our greatest value is the ability to help you look at the whole picture - numbers, family, business. You’ve worked hard to have it all... wouldn’t you like to keep it? family, business. You’ve worked hard to have it all... wouldn’t you like to keep it?
New York City New York City 485 Madison Avenue 485 Madison Avenue New York, NY 10022 New York, NY 10022 212.792.6300 212.792.6300 Long Island Long Island 100 Quentin Roosevelt Blvd. 100 Quentin Roosevelt Blvd. Garden City, NY 11530 Garden City, NY 11530 516.542.6300 516.542.6300 www.janoverllc.com www.janoverllc.com
Women In Construction
By Carla Giarrusso, senior project manager, Suffolk Construction and REBNY fellow
As New York continues its post-pandemic recovery, industries statewide are making valiant efforts to bounce back. Workforce development is a critical piece of that effort. Within the construction industry — vital to the role of economic recovery — steps to grow and diversify the field have been slightly lacking. But they don’t have to be.
We need to meet the growing demand for key infrastructure projects, tackle the housing crisis and help promote the creation of sustainable cities. But to equitably build toward this future, an equal balance and partnership between women and men is necessary. Only then can this sector reap full benefits and drive recovery forward in a more substantial way.
We must build women up in our workforces. This is integral to help with the current labor shortage and is especially needed because COVID-19 has also increased the pressure on working mothers, with many becoming unemployed due to a lack of childcare. If this continues, the widening gender disparity in the labor market will only expand. New York City-based organizations like NEW (Non-Traditional Employment for Women) are key to supporting women as they help prepare, train and place women in careers in the skilled construction trades. Also, the Real Estate Board of New York (REBNY) is committed to helping the real estate sector cultivate diverse talent and build a leadership pipeline that brings new ideas, experiences and relationships to the table via its Fellows Leadership Program, which I’m honored to be a part of this year.
To that end, we must go back and challenge the gender-based ideologies that persist in the construction industry and hinder women from seeking out what I believe to be such enriching work. The first step of that process is to dispel some common industry misperceptions that I’ve seen firsthand, so that other women feel more comfortable taking it on as a profession.
People often perceive construction as strictly blue-collar, consisting of “just” manual labor. But it truly is a science. It is a profession that requires much knowledge and continued learning, along with problem solving and working with people from different walks of life. No one project is the same and, within each project, there are many vital roles tailored to individual skill sets. Championing construction will help balance the perception of degree versus trade, as well as bolster young people, women in particular, to get involved. It is also a perfect opportunity for people who don’t want to work in an office and aspire toward more onthe-ground field work.
One of the most remarkable things about my 25-year career is the extent to which I feel at home as a woman in construction. My experience with all my colleagues or mentors, past and present, have been nothing short of positive. I hope that sharing my positive experiences encourages other women to join in the trade. It’s also important to do your homework on the companies you’re applying to. A company like Suffolk Construction values diversity and inclusion and has a DEI department that helps to ensure women play a central role in the business. This is invaluable.
Every day, people take for granted the spaces that we live, work, play and eat in. A career in construction allows you to take that step back and really appreciate the physical world because you know you had a hand in building it. Not only is every project unique, but every day brings new challenges and lessons. Immediately, you’re brought on as a partner in the development of communities, whether it be a tower, bridge, school or factory.
A career in construction is something that all women can aspire to. We can be a driving force for change, not only as laborers, but also as managers. There are several opportunities for long-term growth and it helps to note that the gender pay gap in the construction industry is lesser than the national average.
In the face of economic recovery, a once male-dominated industry is finding itself in need of women — and we must oblige. It’s ultimately a win-win scenario. Women will re-enter the workforce, secure their footing in the labor force and close the gender pay gap while the industry gains access to diverse, qualified and talented men and women.
It’s imperative that we take advantage of this chance to transform our industry for the better, so that other trades can also begin to take notice. Women have just as much of a place in the construction industry as we do anywhere else. Let’s continue to pave the way toward more female involvement and job growth as we continue to recapture the essence of our great city.
Carla Giarrusso Suffolk Construction One Pennsylvania Plaza, Suite 5500 New York, NY 10119 (646)952-8000 cgiarrusso@suffolk.com
New York 212.292.4430 Nassau & Suffolk 516.307.0907 Donald Gelestino
President and CEO
Westchester 914.287.7353 Connecticut 203.350.3550 New Jersey 908.996.7800 Pennsylvania 215.770.6679
Harlem is Back With a Vengeance
I recently met with a politician friend at Harlem Shake to enjoy the performance of C. Kelly Wright, who is one of the partners of Harlem’s Late Night Jazz, an organization that promotes musical events around the five boroughs. I wanted to chat about our new mayor, Eric Adams. In my opinion, Adams will be a great lawand-order mayor for our city. While many will disagree with his stop-and-frisk tactics to clear the city of weapons, I completely agree with his decision.
During our conversation, we discussed the real estate market and what’s new in Harlem, including the fact that more Hollywood personalities are looking to invest in properties in New York, especially Harlem.
“They had better hurry; every plot of land and nook and cranny in Harlem that I’ve seen has a project on the site,” I said, as my friend mentioned that the Bronx is the new frontier. I reminded him that I am a realtor and I had just joined Coldwell Banker Warburg. He congratulated me on joining this esteemed real estate company with another round of drinks.
A Changing Harlem
As we strolled the corridors of Harlem after dinner, it was great to see new stores and restaurants that have opened their doors in the community and finally, seeing the stores and restaurants that survived the pandemic.
Sylvia’s continues to overflow with tourism business. My favorite place, Jacob’s, is enlarging its space. When the famous Red Rooster shut down, the community was concerned that it would not be re-opened, but Red Rooster is back in business! The Apollo Theatre has opened its doors, too, and Minton’s Playhouse is back, as well. Good food and music are seemingly around every corner of Harlem.
As we continued to stroll down 125th Street, we noticed all the new skyscrapers — in fact, 125th Street is beginning to mirror Madison Avenue without the hefty price tag. Even so, I was shocked when I found the perfect place for my commercial client to open a coffee and pastry shop. It was absolutely what he needed. When I contacted the broker about this property on Fifth Avenue and 111th Street, she informed me that this 670-square-foot storefront’s asking rent was $65 per square foot — that adds up to a cost of more than $43,000 per month! Harlem is not inexpensive anymore; those days are gone. On the residential side, the average monthly rent has soared — a cozy, walk-up, two bedroom/two bathroom, no doorman building, has risen from from $2,600 to $3,000. Yet some would say that’s still an excellent price, even with no amenities.
Harlem is Back — But Different
It is a beautiful sight, sound and feeling to walk along the streets of Harlem, seeing different people from all walks of life. When the pandemic hit, the area around Lenox Avenue and 125th Street was a ghost town — except for the near-constant, mile-long line to get into Whole Foods. Now that COVID-19 is subsiding and somewhat under control, new construction has started again (unfortunately for residents at 7:30 a.m.).
It’s back: 125th Street is alive again. The tour buses and walking tours are back. Tourism is back. Sidewalk vendors are competing with the name brand stores. If you chat with the street vendors, they will let you know that business is as complex as it’s ever been, and that maintaining their business among the growing construction projects all over Harlem is changing things in a big way.
The mom-and-pop stores have vanished. They have been replaced by Victoria’s Secret, Mac Cosmetics, T.J. Maxx, Spectrum and Whole Foods. Wells Fargo bank has taken the space of the legendary Lenox Lounge, where Billie Holiday, Miles Davis and John Coltrane performed. The community took it hard, and there was even a local uproar about the design of Wells Fargo Bank. Harlemites were dismayed that the architect did not consider the rich history of Harlem and of the Lenox Lounge. Many feel that Wells Fargo is an eyesore to the community, and that the building developers showed a lack of respect for the rich history and the community of Harlem.
