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Stimulus to Offer Limited Help to NYC Real Estate Industry

LAUREN PEACE, HOST: New Yorkers have been ordered to shelter in place, and almost three weeks in, that means whatever place they’re in right now. As people hunker down, the real estate industry has ground to a halt. And experts say federal stimulus money probably won’t be enough to ward off a deep slump. Aseem Shukla reports on renters and realtors caught in the middle.

ASEEM SHUKLA, BYLINE: When Aidee Frescas signed a lease on a new apartment in Forest Hills a few weeks ago, she expected a simple move. That’s not how it turned out.

AIDEE FRESCAS: It was weird, it was just so weird.

SHUKLA: By moving day last week, she and her boyfriend had decided not to hire movers. Too much potential disease exposure, not that much stuff. Same for the elevator in her new building… too many people constantly coming in and out. Instead, they carried everything up six flights of stairs.

And they sterilized everything in the new place -- surfaces, floors, bathroom.

FRESCAS: I think we overdid it. Um, we over cleaned the house. Like all the products and chemicals that we put into this little apartment.

SHUKLA: Going out to stock up on home goods turned out to be equally harrowing.

FRESCAS: It was very scary, because like, everybody was acting like nothing was happening. And I'm talking about just last week. Um, the Target was full of people. There was children running around us and I was just like, what is happening? This is so weird.

SHUKLA: Frescas and her boyfriend had scheduled their move well before the pandemic brought a chill to the real estate market. Now, there are far fewer apartments available to rent.

Raymond Keller, a realtor at Halstead, is actually telling people who have flexibility to wait… even though that means he’s not getting their business.

RAYMOND KELLER: We're certainly not advising new rentals to launch if they don't have to. I think in general, the most responsible people are really putting health and safety first. For real estate that means not doing our jobs.

SHUKLA: According to New York State guidelines, real estate agents are not essential workers. That means no in-person walkthroughs by renters, buyers, or agents. Virtual walkthroughs can only be led by an owner or current tenant. But most prospective renters won’t want to commit to a new home that way.

JONATHAN MILLER: You know, it's gonna be a tough time to be a tenant and a tough time to be a landlord and a tough time to be a property owner. I don't think anybody really benefits.

SHUKLA: Jonathan Miller runs the real estate appraisal firm Miller Samuel.

MILLER: So I feel that both parties on the either side of the transaction are equally trapped. How do you as a tenant go look for another property right now in New York? Right? And then the landlord is looking at people not paying rent. So it's I think, both parties will be commiserating.

SHUKLA: It’s too early to know how big an impact the pandemic will have on rentals and sales, but Miller thinks many firms will have to cut staff.

MILLER: Despite maybe reality shows that you see on TV, it’s actually… they’re actually low margin industries. And so, you know, you save for a rainy day, but not a rainy year.

SHUKLA: There may be some relief for the industry in the stimulus that Congress passed last week. It includes direct payments of $1200 to many Americans, expanded unemployment insurance, and even tax benefits for real estate investors. The bill temporarily removes the cap on how much property depreciation they can write off on their taxes.

MILLER: I see it as helpful, and probably necessary. But I think the scale of this is so much larger in terms of, you know, housing and paying rent, because there's this forward looking uncertainty. And the problem we have now is we don’t have any idea of when this will be over.

SHUKLA: Miller says that past crises, like 9/11 or the 2008 financial collapse, were singular events, followed by some kind of recovery. This time around, nobody knows how long we’ll be locked down. For Columbia Radio News, I’m Aseem Shukla.


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