The New York Real Estate Mafia
Sometimes your conspiracy theory turns out to be absolutely true.
Over the past few years, primarily due to conversations I’ve had at my weekly Alt Banking meetings, I’ve become increasingly concerned about the crazy real estate industry in New York City and New York State. A few pertinent facts:
- There’s been a crazy luxury housing boom. Specifically, more luxury housing is being built than there are people who could reasonably afford them.
- Except perhaps the way to look at such apartments is that they are not apartments at all but financial instruments for rich people.
- Specifically, rich people who want to hide or launder their money. The disclosure laws are suspiciously lax.
- On the side of “affordable housing,” which the Alt Banking group wrote about here in our Huffington Post blog, there are ridiculous tax abatement laws that benefit builders. Specifically, the “421a” law, which Dean Skelos, Republican majority leader in the State Senate, is somehow involved with.
- Specifically, it seems that Skelos demanded money for his son in return for playing nice with developers.
- The ironic thing is how small the pay-offs are: on the level of $200K. Compare that to the $1.2 billion of taxes that have gone uncollected by the 421a law.
- In the meantime, the construction unions are being decimated by the real estate industry, even in this outrageously flush time. They are trying to organize around repealing the 421a law.
I am really hoping we can clear up this mess and end the corruption in the New York real estate market soon. Housing is a big deal.