(CHPC)

After improving in the first half of last year, the Case-Shiller Home Price Index began to plummet in the middle of 2011, and it has reached a new low with the release of the November numbers yesterday. As one of the stronger measures of the U.S. housing market, the index is closely watched, and any negative movement is seen as a problem for both housing and the economy. Now, analysts are predicting national housing prices will not recover at least until the spring.

Does this have any bearing on New York, considering the Case-Shiller only tracks single-family homes? In short, yes. "Obviously, housing weighs on the larger economy, so that has an impact on us," said Harold Shultz, an analyst at the Citizens Housing and Planning Council, which closely follows the Case-Shiller from a city perspective.

There are more direct implications, as well. While Manhattan is an island unto itself, with very few single-family homes, this is the case in large swaths of the outer boroughs. "Manhattan is unique and different," Mr. Shultz said. "But the rest of the city is like the rest of the country. You do see a problem in Queens and Brooklyn and Staten Island."

He pointed to his own home in Queens, a single-family rowhouse on a block with higher-occupancy buildings, as well. Mr. Shultz estimated his home had probably lost 30 percent of its value from the peak, a fact he was not too terribly worried about having bought the place in the 1970s. But he pointed to a neighbor whose home was underwater. "Even if you live in an eight-unit building down the block, these problems affect you," Mr. Shultz said.

And so a sinking tide floods the market. "I think we're just bumping along the bottom here, waiting for things to turn up," Mr. Shultz added.

mchaban [at] observer.com | @MC_NYC

John Burger

After hearing that real estate brokers have been suffering in the recession, we decided to call John Burger, recently named America's top broker, to see his take on the recession's lingering effects on the industry.

"I think that what were seeing is that 20 percent of the brokers are doing 80 percent of the business. The sellers and the buyers want to align themselves with the brokers that have the track record," he told The Observer. And while Mr. Burger himself happens to be in the favored 20 percent, his comments seemed informed rather than self-serving. When times are rough, sellers and buyers want to ensure they're getting the biggest bang for their buck, and are reaching out to the city's gilded agents to help them, Mr. Burger explained.

Accessibility of information has also played a significant factor in the industry's steep divisions. "I think that the Internet is driving the volume of business that goes to the overachieving  brokers. Ten years ago there was no information on the web, now its all there. It's almost like the buying public is able to rate their broker and choose their broker in the same way they choose their mutual fund," he explained. So many brokers are feeling the heat in the cool economic climate, but it's been boom times for the top few.

And all those foreign buyers? By his estimation, foreign buyers are comprising about 20 to 25% of condo buyers, but only about 5% of coop buyers. It's mostly the new building's they're after anyway, particularly well placed Midtown developments like Extell's One57. "It’s a great pied a terre location for the international buyer. It puts you in the heart of everything," he said.

In terms of the luxury market, he explained why some properties have been flying off the market while others have been slow to sell. "People are responding to instant satisfaction as opposed to delayed satisfaction," he said.  "When things are in move-in condition or in mint-condition, I think people will reach for them and will pay a premium for them. I think when somebody  is confronted, a great apartment, with work restrictions and renovations and board approvals, they know it’s a year year and a half of their life."

Here's what we gleaned from our fireside (OK, office phone) chat with good sir Burger.

1. A lot of brokers are in fact broke.
2. The Internet is a powerful tool
3. Foreigners like shiny things
4. It's no longer en vogue to buy a project apartment.

eknutsen@observer.com

"Good busy!" they quickly qualify.

Well aware that these days are a far cry from the pre-Lehman boom times, The Observer thought foreign investments were buoying the market, and that everything was moving along nicely. Not so, it would seem. A new survey by direct-to-consumer title insurance company ENTITLE DIRECT claims that New York brokers have been quietly suffering over the past three years. When the company asked 200 brokers in the five borough about the effects of the recession on their business, the responses were surprisingly abysmal. Almost every broker, 92% of them, claimed to have lost money since the onset of the credit crisis, and a full 30% have taken on a second job to supplement their income.

And how about the future? Not so hot. "When asked about their outlook on the real estate market, 60% of New York City agents and brokers stated that things are only going to get worse, which is in stark contrast to the 6% that claimed we are in a market upswing," the survey states.

Even one broker claims the recession led to a divorce, but when you think about it, that's probably way better than average. Maybe things are better than we though after all.

eknutsen@observer.com

The ARC. (Bergen Record)

Robert Moses built as often with expressions and syllogism as with stone and steel. “The important thing is to get things done.” “If the end doesn’t justify the means, what does?” “Either you want it or you don’t want it, and either you want it now or you don’t get it at all.”

They peppered his conversations and correspondence and were bellowed at rooms full of subservient staff, intransigent politicians and hostile citizens. The most influential and enduring of his maxims is undoubtedly: “Once you sink that first stake, they’ll never make you pull it up.”

More than the thousands of miles of roads and bridges and tunnels, the grand parks and parkways, the exhibition centers and fairs, more than the innumerable demolished homes and displaced families, the congestion and pollution, the social unrest—more than anything that Moses built or destroyed, this idea, get the shovels in the ground and there will be no stopping us, shaped the country’s public works ethos.

While his projects were largely confined to New York, his ideas about how, and why, to build persisted across the country. Sure, there were the acolytes who parroted Moses' ideas of urban renewal in cities across America, but they fell out of favor not long after their patron fell from power. His ideas, on how to build, and more importantly how to keep building, persisted for decades after Moses was deposed. For almost 30 years after he was laid to rest in 1981, Moses’ spirit lived on in infrastructure.

Sink those stakes, and the money will follow for more. It always does.

Then, almost over night, we gave up the ghost. It did not start with New Jersey Gov. Chris Christie and his decision to cancel the ARC Tunnel—recall the Congressional fight over much-maligned stimulus spending—but that was certainly the clarion call.

So what if the motivations were more political than practical? So what if Mr. Christie listened to the complaints of his wife about the 10 flights of stairs up from the new 34th Street station that she dreaded, rather than the counsel of transportation experts? Whatever the outcome of Mr. Christie’s decision to nix the tunnel—longer commutes, an abortive presidential run (twice!), more money for highways—the simple fact remains that he pulled up the stakes, and once he did, others began to follow suit.

During his election run in Wisconsin, Gov. Scott Walker launched NoTrain.com. An open letter, aimed at the president and his gubernatorial predecessor, declares, “I am drawing a line in the sand Mr. President: No matter how much money you and Governor Doyle try to spend before the end of the year, I will put a stop to this boondoggle the day I take office.” He returned the $800 million his state had been promised.

Florida Gov. Rick Scott went even further, turning down a $2 billion grant—almost as much as Mr. Christie gave up—that would have helped fund high-speed rail between Tampa and Orlando. This was the Obama administration’s signature stimulus project, bullet trains some day running from coast to coast, the kind our rivals in Europe and Asia are building with frustrating regularity, and here were some of the nation’s top political leaders turning their noses up at this free money.

What has gone missing is “the civic state,” as the great Moses biographer Robert Caro put it in an interview. “When you talk about building these things, it’s about improving the overall environment we live in,” Mr. Caro said. “It’s worth paying to do that.”

People have been declaring the death of Robert Moses while he was still alive and even while in power. However, America may be witnessing the true twilight of his influence, the final stake, this one through his heart. At a time when we need to be building, not only to repair our aging infrastructure, but to dig ourselves out of a recession, we are doing anything but.

The Tappen Zee. (Getty Images)

New York has always had a strong tradition of public works, one that long predates Moses. The Erie Canal, the New York Street Grid, all the parks of Olmstead and Vaux, the subways, the bridges, the tunnels. Party lines, then, did not matter, and in fact some of our greatest builders were Republicans: Rockefeller, Pataki, Bloomberg. That is what makes the current gubernatorial administrations so vexing.

It may be too early to judge New York Gov. Andrew Cuomo’s public works legacy, of course, but the past 10 months do tell a story.

Governor Cuomo was swept into office with a mandate, the kind President Obama had, the kind that tends to lead to visionary thinking. And indeed, the governor has achieved much, in terms of property tax reform, an on-time budget, and his marquee victory, marriage equality. But all of these issues have been addressed in an environment of austerity. It is something the Governor Cuomo has preached from the start.

For much of that time, the administration kept the two master builders, former MTA head Jay Walder and former Port Authority head Chris Ward, in place, if at arm’s length. Infrastructure issues, most general investments, were barely mentioned. Only last week did the administration begin accepting applications for a Race-to-the-Top-style economic competition. The priority was fixing the budget before expanding it again, if ever.

However, in the past month, all of that has changed. Joe Lhota, a Giuliani budget boss, was placed atop the M.T.A., and Pat Foye, Eliot Spitzer’s downstate economics czar, was named his counterpart at the Port Authority. Both come from the state’s conservative firmament, though their loyalties are to efficient bureaucracies above all else. They are numbers guys. Even critics speak highly of them, and this is not to doubt their capabilities or the possibility of success, but the question remains exactly what sort of transportation system they will shepherd, one of expansion and vision or cuts and moderation.

“I think it’s a far greater priority to make sure those projects are tightly controlled, on time and on budget, and that the rest of the system is made more efficient and cost-friendly,” a former Giuliani aide who worked closely with Mr. Lhota told The Observer following his appointment. Consider his stiffest competition for the job, Neil Peterson, a competitive dancer and serial entrepreneur who started a car-sharing company later purchased by ZipCar. He also ran three transit agencies out West.

This is not a question of the capabilities or capacity of the people appointed by Governor Cuomo. It is a question of vision, of operating principals, the bean counters versus the visionaries.

Robert Yaro, president of the Regional Plan Association—its predecessor organization thought up the W.P.A.—said he thinks Mr. Lhota and especially Mr. Foye will endeavor to reshape the region. The old projects will finally be finished, but what about the ones coming after? "There are some big projects moving ahead," Mr. Yaro said. "Does this mean we shouldn't be thinking about the next generation of projects? What about high-speed rail? What about trans-Hudson mobility?"

Consider the Tappen Zee Bridge—just do not drive across it. The span is 56 years old, but for almost a decade it has been one of the states worst, in terms of structural safety. It handles 140,000 drivers a day, almost five times the amount for which it was originally designed. (This is at the heart of the nation's infrastructure challenge—more users on older spans with less money to pay for them.)

If Andrew Cuomo had been indifferent to infrastructure, this is one major exception, and arguably the best indication of his approach. For the past nine years, the fate of the aging Hudson River viaduct has been debated. There were over 300 public meetings. Even before he took office, Governor-elect Cuomo came and visited the bridge, promising to come up with a solution before it collapsed. On Nov. 10, the administration announced it had reached a deal with the federal government to rebuild the bridge, even going so far as to expedite the onerous environmental reviews so construction can begin sooner.

The new bridge will cost $5.2 billion in total. But it will be lacking in a rail connector or even a pedestrian walkway, as had long been lobbied for, a decision that cuts the cost of the project in half but limits its capacity.

"I’m the cheapest guy around in government," Westchester County Executive Robert Astorino recently told WNYC. "We’re cutting costs left and right. But if you’re going to spend money, spend it efficiently. And right now you’re going to replace this outdated bridge with another outdated bridge the day you cut the ribbon."

The Cuomo administration argues that it is building a bridge capable of adding the popular features in the future, when there is money available, while keeping the structure from falling down now. His approach is as valid as Moses', but it lacks the desire to tackle the whole problem, not just the 20th Century piece of it. The entire reason advocates wanted mass transit on the bridge was to reduce the number of cars already clogging it.

There is no question the Tappen Zee needs to be fixed, but there remains the issue of what should replace it—not to mention the other infrastructure in the state. The World Trade Center still has a far way to go, and Mr. Foye has promised to revive projects from his previous portfolio, such as Moynihan Station. What sort of compromises might be made there?

The World Trade Center. (Port Authority)

“Even if we weren’t in this enormous recession, we wouldn’t be seeing the gas tax go up or other measures because there’s no trust in the federal government, and that they’ll do something right with the money,” said Brian Deery, senior director of the highway and transportation division at the American Association of General Contractors.

It is not fair to place all the blame on the current generation of politicians. The world today is obviously a very different one from the one in which Robert Moses and his cohort were building. The nation is highly developed, with little room for new projects. We are building on top of ourselves. Robert Moses was simply content to bulldoze those who got in his way. America cannot, and should not, pursue such means, and by and large it does not.

This is something people often forget when they point to China and wring their hands. Columbia real estate dean and former Manhattan City Planning director Vishaan Chakrabarti likes to compare the booming dragon to its neighbor, the cantankerous tiger. “India has a big vibrant democracy, and it is struggling to build a competitive infrastructure. China does not worry about such problems, it just builds,” he said.

Robert Caro said this has been the case since before Moses, and it was part of the reason a singular planner was needed to produce the change in New York and beyond that he did. "For better or worse, the city would be a very different place if it were not for him," Mr. Caro said.

"It’s a problem that democracy hasn’t solved, and democracy still hasn’t solved it," he added.

But there is a desparate need to do so—the nation's infrastructure deficit stands somewhere between $1 trillion and $3 trillion, depending on who is doing the estimating.

On the high end, that is one-fifth the annual GDP. It would cause massive expenditures to fix this problem, but it is also an opportunity for an even larger investment in the country. Most advocates point out that construction spending creates a 50 percent return on investment, not to mention the hidden costs of driving on potholed roads, suffering delays at airports, rebuilding bridges at 20-times the cost after they collapse.

Part of the challenge for politicians is that if they expend political capital on capital construction, they may not live to see it through. Many of these big projects now take decades, surpassing the typical four- to eight-year political cycles most elected officials are limited to in this country. George Pataki was a champion of the World Trade Center, Atlantic Yards, the Second Avenue Subway, Moynihan Station, a new Javits Convention Center. It has been five years since Mr. Pataki left his third term in office and still none are finished. Had Mayor Bloomberg not taken a third term, dozens of projects, from Willets Point to Governors Island to the transformation of Broadway might never have been realized.

Financing is also a big part of the challenges facing infrastructure investment. Projects are not simply more expensive because of the maturity of society or the complexity of environmental reviews or the cost of labor and materials, but also more nuanced factors like inflation, global competition—even government itself—which as it grew over the past century began to serve more constituencies.

“When Robert Moses was building in the 1930s and '40s, the social safety net was just beginning,” said Richard Anderson, president of the New York Building Congress. “Now there is a lot more competition for spending.”

There is also just less money to go around. A good portion of capital for infrastructure investments comes from the gas tax, which has not been raised since Bill Clinton’s first year in office. Because the tax is set at an exact amount (currently 18.4 cents) and not on a proportional basis, as gas prices have risen, cars have become more efficient and people generally drive less, it has meant falling revenues. It is also a terribly unpalatable tax. Critics contend Christie killed ARC to pay for road repairs rather than raise his state’s gas tax, the lowest in the nation.

"We have always built fabulously in this country, from the Erie Canal to the intercontinental railroad to the Interstate Highway System," construction attorney and author Barry Lapatner said. "But we have stopped investing, so we are no longer building. If we don’t put this money into our roads and bridges now, it will cost us even more down the road."

The Big Dig. (ArchPaper

But ultimately the biggest issue hamstringing infrastructure at the moment is politics. Public investments, especially large ones, have been lumped in with the general sense of government malfeasance sweeping the country. Political distrust is at such high levels, elected officials cannot be counted on to build the country back up.

And yet the public should come in for their fair share of the blame as well. “Infrastructure is just not sexy anymore,” Mr. Deery said. “These things used to be brand new and shiny and cause a spurt of national pride. But rebuilding a bridge, repaving a road—that is vital but hardly inspiring business.”

The turning point that may well have soured the country on public investment may also have been the moment at which it was saved. The Surface Transportation Act of 2005 contained more than 6,000 earmarks, among them the reviled Bridge to Nowhere, serving 50 residents on Alaska’s Gravina Island at a cost of $398 million.

“There was a real backlash to that bill,” said Robert Puentes, a senior fellow at the Brookings Institution. “But in response, I think there is an understanding that the peanut butter approach, where we spread a thin layer of money across the entire nation, is not working.”

President Obama also comes in for a good deal of blame on this count. While the 2009 stimulus bill may have saved jobs, it did little to transform the nation’s infrastructure, because the projects supporting the jobs were shovel-ready. In other words, just another road-widening beside a strip mall. Yes, the Brooklyn Bridge was repaired, along with other critical pieces of infrastructure, but Havermayer’s grand invention has not changed travel patterns in the city since it was built.

"You have to view the whole picture, the good, the bad and the ugly, but what we don’t need anymore of is the token investments done just for the photo op ribbon cutting," Mr. Lapatner said.

Mr. Chakrabarti of Columbia faults the president’s high-speed rail plan, which dedicated only $8 billion, spread across a few states (some of which rejected it). He argues there was an opportunity to do something truly bold, propose a $250 billion to $300 billion nationwide network that could have started a year ago. And don’t build Washington-to-New-York-to-Boston. “Do we really need a faster train to Harvard?” he said, arguing it was a city in decline. He prefers Charlotte-to-Washington-to-New-York, maybe a spur to Atlanta. The rights of way are cheaper and clearer. “And it would cross blue to purple to red states, maybe help knit this country back together,” Mr. Chakrabarti said.

“Some people just can’t be bothered to wait around,” Mr. Yaro said. He cites Denver, Chicago and of course New York as cities where local officials have all taken up the cause of public investment. Just this past election day, Texas and Arkansas voted to approve new taxes to invest in water and road infrastructure, respectively. The American Road and Transportation Builders Association tracks such ballot measures and has found between 60 and 70 percent success rates, which strongly suggests Americans want to invest in their infrastructure. It is the politicians who most often stand in their way, whether they are building the wrong projects or simply not building them at all.

It seems there are little Robert Moseses running around the country.

Brookings' Mr. Puentes champions these efforts but says the biggest deficiency is a lack of a national approach to building. Rejecting peanut butter, America needs cookie dough ice cream—a lot of vanilla with chunks of goodness concentrated in the mix. Starting from the position that the nation's wants to double exports, Mr. Puentes points to ports, rail freight and roadways as critical investments, which politicians should focus on, and wrest some control from states and municipalities when it comes to investments.

"Take the Bayonne Bridge in New York, it's too low, and when they widen the Panama Canal, and the huge ships start floating up the East Coast, they won't be able to fit under it," Mr. Puentes said. "That's not Bayonne's problem, that's the nation's problem. Same thing in Detroit, there's a bridge they want to build between there and Windsor, Ontario. It's the largest bi-national trading corridor on the planet, critical to any conversation around exports and global trade. It's Detroit's bridge, it's not a national bridge, but it's still a critical piece of infrastructure. I'm not saying the federal government has to step up and make money rain down, but we have to figure out ways to address these critical problems."

Environmental reviews could be streamlined and labor contracts modified, public-private partnerships may someday abound, but the fact remains, sometimes you have to just build.

Look at Boston, where the Big Dig is consistently held up as model of government overreaching and fecklessness. Initially estimated to cost $2.8 billion when it began in 1982, the project took a decade longer than expected to complete, and when adjusted for inflation, cost almost four times as much as planned. But it got built, Boston was stitched back together, with a nice park running through it and new development springing up on both sides.

The same thing goes for the pit formerly known as Ground Zero. It took five years longer than expected just to complete the memorial, costs are soaring for the PATH terminal, two of the towers may be decades away from completion. And yet when visitors began streaming onto the site on the 10th anniversary of 9/11, almost no one complained.

Sometimes you just have to sink that first stake.

mchaban [at] observer.com | @MC_NYC

Curbed has a nice list of the 10 New York buildings that have fared the worst since the downturn, which includes all the usual suspect, like Robert Scarano and Karl Fischer, but there are also some big disappointments, like SHoP and Richard Meier falling short.

This list obviously could have climbed to 100 or even 1,000, but we think it's worth it just for the side-by-side of Julian Schnabel's inimitable Palazzo Chupi.

mchaban [at] observer.com | @MC_NYC

We don't feel so well. (Getty)

For almost five years now, the housing crisis has been a drag on the U.S. economy, the U.S. psyche, the U.S. spirit. It turns out it is also dragging down Americans’ health.

A new study by two economists finds a relationship between the number of foreclosures in a community and the number of hospital visits, according to The Wall Street Journal. Princeton’s Janet Currie and Erdal Tekin of Georgia State University studied residents in Arizona, California, Florida and New Jersey, and they discovered “an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49.” There has also been a rise in suicides.

The Journal notes that general financial stress could be as much to blame as the housing bubble, but since the two are so intimately intertwined, the case either way seems strong. Furthermore, because there was not a corresponding rise in cancer or elective surgeries at hospitals, it appears that the hospitalizations were more stress related than anything.

There is evidence of these problems outside the states studied, too. The Journal found Patricia Graci, a Staten Island woman whose husband lost his job as a painter in 2008, which led to two years of dwindling savings spent on mortgage payments until nothing was left. "Everything was going downhill. My savings were going down to nothing," Ms. Graci told the daily. "When I realized the money wasn't there anymore, I started getting very anxious and depressed."

Then there is the unfortunate case of Norman Adelman.

In 2008, Norman Adelman of Freehold, N.J., called his lender to ask for a forbearance of three or four months, saying he was about to undergo knee-replacement surgery. The lender complied and Mr. Adelman, who runs a home-energy business, says he began scaling back his work. He underwent needed tests and doctor visits.

After two months of not paying his mortgage, he successfully applied for a loan modification, taking his monthly payment from $2,700 to $1,900. But then the loan was sold—and a new servicer didn't recognize the terms of the arrangement, he says.

Mr. Adelman is fighting the new lender but says he has been in and out of the hospital for the last two years. He never had his knees replaced and is now on antidepressants and antianxiety medication.

"He's deteriorated. He's had sleepless nights," says his wife, Shulamis. "You always have this fear of being thrown out. He's just gotten worse and worse from not sleeping."

So which do we need more—chicken soup or loan modifications?

mchaban@observer.com