INCREASED TAXES HURT OUR real estate market. Higher taxes mean reduced consumer spending based upon reduced disposable incomes. Reduced consumer spending affects the retail sector, placing downward pressure on rents and resulting in increased vacancy. If people leave New York for a lower-cost alternative, we will experience lower home prices and residential rents. If businesses decide to relocate because of the local tax environment, it will cause office rents to drop and vacancies to rise. As budget deficits continue to grow, real estate taxes become a bigger target as a source of filling the gap. All of these issues affect the long-term health of our real estate market and our city.
When we see those in government, both locally and in Washington, consistently come up with new ways to tax and spend, it must make us think: Why aren’t they worried about the impact of their actions? Do they really believe that we are completely immune to their effects? America is indeed the strongest nation in the world. Do they just take this for granted and believe that, no matter what they do, they cannot damage the country? There are ramifications for every decision and every action, whether they’re felt in the short term or the long term.
In New York, we have emerged from every form of adversity-and there have been many, going all the way back to the 1600s-and we have done so bigger and stronger than before. I remain optimistic about the future of our great city and remain hopeful that those in power will embrace fiscal responsibility. This will take a long-term perspective and a willingness to do what is right, not necessarily what will be popular or what will enhance one’s ability to get reelected.
Our challenges are many, and while they are difficult, they are not insurmountable. New York will ultimately thrive, but we will get there much sooner if legislated policy helps us to. It is incumbent upon each of us to do what we can to try to make a difference for our future and the future of New York.
Robert Knakal is the chairman and founding partner of Massey Knakal Realty Services, and has brokered the sale of more than 1,000 properties in his career.