Hi, my name is Andrew Weltchek. I’m a partner at the law firm of Cohen, Hochman, and Allen. I do commercial real estate transactions, litigation, and other disputes.
Today, I want to refer to a famous quote from Carl von Clausewitz that, ‘war is politics continued in another way.’ Murdered it but you get the general idea. When people can’t reach agreement, they start killing each other. I often wonder if real estate is also politics conducted by another way. On the latest example of that is the New York State changes in tenant laws: additional protections for rent-stabilized tenants, chiefly. The politics of that is pretty simple. There are more tenant voters than there are landlord voters.
Traditionally, there were more landlord dollars contributed to politicians. But in today’s more distributed fundraising environment and more explicit progressive complaints about the distribution of power in our society, tenants have a larger voice. And in New York state, Democrats finally took control of all three branches and had a governor who was willing to sign a statute like that, which, after all, favors more voters. Landlords, of course, complain about that.
They see it is class warfare — a threat to their pocketbook. And they particularly will claim sympathy for smaller landlords— families, and individuals who are going to have a harder time making money. And it is true that no matter what happens, generally speaking, those with more money and power end up benefiting because they’re in a position to do so.
They can wait out the market. They can use their wealth to their advantage. But that’s just because war has casualties. But it does eventually, one hopes, lead to peace and a steady state of relationship that everybody can get along with, manage to make enough money, provide housing, and make a living.
That’s what I think will happen here but right now we’re in the middle of the battle and everybody is unclear and upset, or at least a lot of them are, about what’s going to happen.
I’ve had a couple of deals that crashed because the purchasers were unsure whether it would be worthwhile to buy small apartment rental buildings on the Upper West Side under the new regime because nobody knows how it’s going to work.
Well, that’s what makes business for me, and I’m grateful. Thank you.