Does A Famous Real Estate Mogul Need To Leave New York For A Market Bounce?

Real estate values in New York City could get a lift if one of its more high-profile occasional residents, President Donald Trump, permanently moves to Florida after he leaves office, real estate agents claimed.

Online news tabloid TMZ reported, without quotes or identifying its sources, that a Trump departure could boost real estate values in New York City. If he does leave the city, as he pledged in October 2019, the tabloid notes that security measures at his buildings would be downgraded and access to the building and surrounding areas would improve.

“If Trump scrams ... most, if not all, of that goes away -- which our sources say would help in bringing prices back up,” the report read.

The Real East Board of New York recently found that investments and residential sale volumes were down considerably from 2019. Year-over-year investment and residential sales dropped 34% between October 2019 and October 2020.

And it’s not necessarily a New York problem alone. In September, Ari Rastegar, founder of Rastegar Property Co., said “we are seeing people trade in their expensive life in high rise apartments, in favor of more space in vintage multifamily apartments in more manageable cities while working remotely.”

Roughly half of the tax revenue in New York City comes from real estate, however. The state and city of New York combined for $1.4 billion in lost tax revenue because of the slump in the real estate market, the REBNY found.

“This $1.4 billion in lost tax revenue represents another 1.4 billion reasons why the federal government must deliver a new stimulus package to help address New York’s economic crisis,” REBNY President James Whelan said in a statement.

But is it a Trump problem entirely? Not exactly. Economic stagnation has left many households strapped for cash. New York, meanwhile, has one of the highest unemployment rates in the nation with 9.7% of the population off the payroll, according to federal data. The unemployment rate was 3.6% in January.

Closed office buildings and a work-from-home culture left many people fleeing Manhattan for the suburbs. Addressing the Trump question head on, conservative magazine The National Interest found it’s not necessarily straight forward. But for Steve Kaufman, whose Kaufman Organization manages 20 or so office buildings in Manhattan, the answer is an easy one.

Trump has “made a couple of good deals in his career, but he’s not regarded as a serious real estate investor,” he told the magazine. “People in real estate are afraid to do business with him because he and his family and his organization are not honest people.”

The National Interest adds that New York City voted overwhelmingly in favor of former Vice President Joe Biden in the Nov. 3 election.