What Will COVID-19 Mean for Housing Development in NYC?
Herrick partners Jonathan Adelsberg and Brendan Schmitt were quoted by City Limits in an article discussing New York City's housing market in the time of COVID-19.
"The housing market, particularly the higher end housing market in New York City was [facing] real challenges. There was a substantial decrease in volume and a substantial decrease in pricing," said Jonathan. Given those challenges, the article mentions that Jonathan added, "developers, including some of his clients, will need to renegotiate the terms of their loans with their existing lender and condominium sales will have to be reevaluated for potential extensions or deferral of payments."
When discussing the situation for landlords during COVID-19, Jonathan likened it to dominoes, "If enough rents aren’t paid out of the building and the landlord still has to pay his or her real estate taxes, [unless] the city is going to forgive the payment of real estate taxes on buildings where tenants are not paying rent," landlords are in a challenging situation. Jonathan added, "You still have to pay the individuals who clean, repair and service the building."
Brendan Schmitt, who focuses on real estate development and construction law, discussed the issue of there being very little federal assistance for developers.
"If there’s any comparison to a hurricane, a blizzard, an earthquake, a natural disaster or a building that’s burning down, we’re at the epicenter of that crisis, meaning the hurricane has not blown over, the snow is still piling up in the streets and has not been plowed yet," says Jonathan. "It is an unprecedented phenomenon that a construction has been halted, that people are not allowed to leave their homes. All of these components are so unprecedented and so immediate."