New Yorkers start to return to offices, in hybrid mode for now – ET RealEstate

NEW YORK: From large corporations calling employees back to business district skyscrapers to the return of lunchtime lines at salad bars: signs that workers are returning to New York’s offices, albeit in “hybrid” mode for now, are multiplying.

Several companies emblematic of America’s financial capital are preparing for a huge in-person return of staff after 14 months of widespread teleworking and a vigorous vaccination campaign.

JP Morgan Chase bank led the way at the end of April when it announced that it would bring all of its US staff back to the office on a “rotational” basis starting in early July.

Then last week, fellow New York financial giant Goldman Sachs sent employees a memo telling them to prepare to return to the office from June 14.

The instructions came around the same time that New York Governor Andrew Cuomo announced that most of New York’s pandemic-era restrictions will be lifted on May 19 as Covid-19 positivity rates, now around two percent, continue to fall.

Local government is also making moves: city hall brought back 80,000 employees last Monday.

The announcements accelerate a return-to-work movement that was just getting under way in America’s largest city. New York has taken a cautious approach to reopening after finding itself the early epicenter of the US’s outbreak in spring 2020.

Just 16 percent of workers had returned to offices at the end of April, up from 13 percent in January, according to Kastle Systems, which specializes in building security.

“There’s definitely an upward trend, but it is an incremental trend,” Kastle Systems chairman Mark Ein told AFP. “It is a slowly building wave.”

New York occupancy rates are below the US average but some insiders are predicting a sharp increase in the next two months.

“We’ve seen a dramatic shift,” said Craig Deitelzweig, president of Marx Realty, a company managing seven buildings in Midtown and Wall Street.

Its occupancy rates passed 30 percent last week, against less than 20 percent previously.

“The tenants who weren’t back were saying September and now we’re hearing June or July, some even in May,” he said.

– ‘Optimism’ – Potential clients scouting out new offices have also picked up, he said, with many expressing a demand for outdoor spaces and windows that open — not always the case in Manhattan skyscrapers.

“Before I would look through my window at the avenue and there would not be a single person on the sidewalk,” said Robert Byrnes, president of the East Midtown Partnership, a business association.

“Now, it is still not packed, but I can see a few dozen people from my window. There’s definitely a sense of optimism,” he added.

Yet, many employees remain reluctant, especially when they have long commutes on public transport to get to their desks.

Nadjeda Estriplet, human resources manager at a financial technology company, returned to her office in Manhattan, an hour from her home in Brooklyn, for the first time Thursday.

But she’s in no rush to return more regularly, especially since she prefers to wait until the summer before getting immunized to make sure there are no adverse reactions to the vaccines.

Her company, like many others, has surveyed its employees and is “leaning towards a hybrid” model from September, with two or three days a week of work in the office mandatory.

Jordan, 34, who works at a large financial firm, also hopes that he can continue to work from home at least two or three days a week and save himself two hours of commuting a day.

– Apprehensions – “I sleep better when I work from home, and I also eat better — healthier food when I make it myself,” said Jordan, who declined to give his full name because he was not authorized to speak to the press.

So far, his employer hasn’t “put on any pressure” to return to the office but he expects, with apprehension, new instructions soon.

Companies seem aware that some employees might have reservations about returning. In its memo, Goldman Sachs — where young executives recently denounced endemic overwork — said staff would have the opportunity to discuss their situation with their superiors.

Some 72 percent of American employers say they are open to a hybrid mode, but generally on the condition that staff are in the office for at least 20 hours a week, according to a study released in late April by Arizona State University and the Rockefeller Foundation.

The flexibility could be explained by the companies’ reluctance to force staff to get vaccinated. Forty-four percent want to impose immunization on all their employees, while 32 percent preferred to “encourage” it, the study found.

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States in US struggle to get rent relief to tenants amid pandemic – ET RealEstate

Representative image

Gov. Andrew Cuomo announced last July that New York would spend $100 million in federal coronavirus relief to help cash-strapped tenants pay months of back rent and avert evictions.

By the end of October, the state had doled out only about $40 million, reaching 15,000 of the nearly 100,000 people looking for help. More than 57,000 applicants were denied because of criteria set by lawmakers that many said was difficult to meet.

New York’s experience played out nationwide, with states failing to spend tens of millions of federal dollars aimed at helping renters avoid eviction. Burdensome requirements, poorly administered programs and landlords refusing to cooperate meant tens of thousands of tenants never got assistance. Some states also shifted funding away from rental relief, fearing they’d miss a year-end mandate to spend the money – a deadline that got extended.

The problem, housing advocates said, was that the federal government didn’t specifically earmark any of the coronavirus aid for rental relief, leaving states scrambling to set up programs with no guidance on how the money should be allocated. As much as $3.43 billion in federal aid was spent on rental assistance, according to National Low Income Housing Coalition. But advocates said more should have been done, given tenants faced as much as $34 billion in unpaid rent through January, according to a report released by the National Council of State Housing Agencies.

States’ rental relief programs “were a very mixed success. It was sort of a patchwork of programs,” Maryland Democratic Sen. Chris Van Hollen said in February. “There was a lot of experimentation – some successful, some not.”

Several states have since made changes, hoping to be better positioned to handle their portion of more than $45 billion in rental assistance coming from Congress in the coming months.

Last year, Pennsylvania, Louisiana, Mississippi and Kansas were among the states that struggled to distribute rental assistance. Kansas set aside $35 million but siphoned off $15 million for other uses, realizing only on Dec. 27 that it had more time to spend the money.

Mississippi allocated $18 million for rental relief but committed less than $3 million by December. The state said the U.S. Department of Housing and Urban Development determined the grant program it relied on could not help tenants behind on rent, only those at risk of homelessness. A HUD spokesman denied that, saying the money could be used for rental aid.

In New York, difficulties were blamed on lawmakers’ criteria, including that tenants show they were paying over 30% of their income toward rent. Applicants also had to show a loss of income from April to the end of July, when some saw an increase from extended unemployment and other benefits.

“When you have $100 million to help and only 40% is spent, something is wrong. There is no question there are a lot of people in need,” Justin La Mort, a supervising attorney at Mobilization for Justice Inc., a nonprofit legal services provider in New York.

He said the program was too focused on preventing fraud – at the expense of helping people.

Bonney Ginett, whose massage therapy business dried up during the pandemic, applied for help in July and said she was denied in October because she failed to prove loss of income. The 66-year-old New York City resident now owes more than $26,000 in back rent on her one-bedroom apartment and fears eviction.

“It’s a well-meaning program and probably should and ought to be fixed, but it’s hard to say because of how much overload their system experienced and might still be experiencing,” Ginett said. “The types of relief that could help me are supposedly there. But then you run into a brick wall.”

Lennard Katz, her landlord and a partner at Sussex Realty, said he didn’t understand how Ginett couldn’t get help.

“We believe it’s a travesty that NY State has been unable or unwilling to get money to the tenants and landlords that desperately need assistance during the Covid crisis,” he said by email.

Charni Sochet, a spokesperson for New York State Homes and Community Renewal, said the affordable housing agency “worked intensely for months to ensure rent-burdened households received the assistance for which they qualified” and that “the rent relief program quickly delivered funding to renters most in need in accordance with the specific requirements established by the Legislature.”

Pennsylvania had similar problems, spending $54 million on rental assistance and $10 million on mortgage assistance, out of nearly $175 million dedicated for the program. Just over one-third of applicants got help.

Facing the Republican-controlled Legislature’s Nov. 30 deadline to spend the money, the state Housing Finance Authority returned the bulk of it. Some of it went to the corrections department.

“There were a lot of sort of roadblocks put up for people to really effectively and easily get into the program, get the assistance and stay in their homes,” said Bryce Maretzki, director of the housing authority’s Office of Strategic Planning & Policy.

Perhaps the biggest problem was a $750 monthly cap. That’s below the median rent in Pennsylvania, making it inadequate in bigger cities with higher housing prices.

Applicants also had to be 30 days behind on rent, which Maretzki said meant someone might fall behind to qualify, only to “run the risk of losing your house and then not qualifying for the program.”

“There were many tenants who didn’t think the money would come in time, so they moved in with a family or doubled up or found less suitable housing because they didn’t think they could make the next month’s rent,” said Rachel Garland, an attorney at Community Legal Services in Philadelphia.

In Louisiana, $24 million in assistance for renters facing pandemic-related financial problems was announced July 16, with about half coming from federal funding.

Just $2.3 million has been distributed to 956 applicants, said Keith Cunningham of the Louisiana Housing Corporation, the agency administering the effort. The program was so swamped with inquiries, the online system shut down within days. And there was a lengthy application.

“Do you think the person who is reaching out to you has a fax machine or solid enough internet or a printer in their house to handle a 50-page application?” said Andreanecia Morris of the Greater New Orleans Housing Alliance.

Cunningham said the program’s size was daunting, made more challenging by a busy tropical storm season.

“No one in the state has done anything on that scope,” he said. “There was no infrastructure, no system to deliver. … We had to really build it from scratch.”

Yaeko Scott, who lost her housekeeping job during the pandemic and owes $6,000 in rent on her family’s two-bedroom apartment in New Orleans, said she’s repeatedly tried to get help.

“I’m aggravated,” she said. “Nothing is being done. Everyone is calling asking about the rent. I’m not getting anything. It’s really, really rough right now.”

Some states have made changes with new federal aid coming.

In Louisiana, roughly 7,000 applicants who were initially considered will get priority for $161 million, Cunningham said.

Pennsylvania fixed its $750 rental cby reinterpreting the law and said a different agency would handle the new funding.

New York expanded the program’s eligibility and will reconsider applicants who were initially denied.

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BlackStone to expand headquarters at 345 Park Avenue – ET RealEstate

BENGALURU: BlackStone Group Inc has signed a deal to expand its presence at its Park Avenue, Manhattan headquarters, the asset manager’s landlord the Rudin family said on Thursday.

345 Park Avenue, the building where BlackStone’s current headquarters is housed, has been the company’s home for more than 30 years.

BlackStone will lease an additional 80,000 square feet of office space, bringing its total property to about 720,000 square feet. It also extended all its leases in the building for an additional year until 2028.

“This expansion marks a significant commitment by one of the financial industry’s leading firms and signals an important part of New York‘s recovery,” said Bill Rudin, chief executive officer of Rudin Management Company, the operating arm of Rudin Family Holdings.

BlackStone’s move to acquire more office space in Manhattan comes as COVID-19 vaccines are being rolled out in the city.

The company had completed a nearly 150,000 square feet of expansion in the building in 2018.

Other notable tenants in the building include global auditor KPMG and the National Football League.

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New home sales in U.S. increase by 4.3% in January – ET RealEstate

WASHINGTON: Sales of new U.S. single-family homes increased more than expected in January, boosted by historically low mortgage rates and an acute shortage of previously owned houses on the market.

The report from the Commerce Department on Wednesday suggested the housing market would continue to underpin the economy’s recovery from the COVID-19 recession. Momentum could, however, ebb in the near term after winter storms wreaked havoc this month in Texas and large parts of the South region.

Higher house prices because of the tight inventory resulting from lack of land and very expensive lumber could push homeownership out of the reach of many first-time buyers.

“There is an insatiable demand for homes right now, and it can’t be met by resales of existing homes, so people are signing contracts for new homes,” said Holden Lewis, home and mortgage expert at NerdWallet.

New home sales rose 4.3% to a seasonally adjusted annual rate of 923,000 units last month. December’s sales pace was revised higher to 885,000 units from the previously reported 842,000 units. Economists polled by Reuters had forecast new home sales, which account for 12.1% of U.S. home sales, climbing 2.1% to a rate of 855,000 units in January.

The median new house price increased 5.3% from a year earlier to $346,400 in January. New home sales are drawn from a sample of houses selected from building permits and tend to be volatile on a month-to-month basis. New home sales surged 19.3% on a year-on-year basis in January.

Sales increased in the South, Midwest and West, but declined in the Northeast. They were concentrated in the $200,000-$749,000 price range. Sales below the $200,000 price bracket, the sought-after segment of the market, accounted for only 6% of transactions last month.

Stocks on Wall Street were trading higher, with the PHLX housing index outperforming the broader market. The dollar gained versus a basket of currencies. U.S. Treasury prices were lower.

Supply tight

The National Association of Realtors reported last week that the supply of previously owned homes available for sale plunged to a record low in January. That has pushed buyers toward the market for new homes. Demand for housing is being driven by Americans seeking more space for home offices and schooling as the year-long coronavirus pandemic drags on.

Though mortgage rates have risen in recent weeks in tandem with U.S. Treasury yields as investors anticipate stronger economic growth and higher inflation, the 30-year fixed rate remains well below 3%.

A separate report from the Mortgage Bankers Association on Wednesday showed applications for loans to buy a home decreased 12% last week from a week earlier. Mortgage loan applications were 7% higher compared to the same period last year.

Economists believed the week-to-week decline in applications reflected disruptions caused by the snow storms, which left large swathes of Texas in the dark and without water supplies.

“We would expect a bounce-back over the next few weeks as activity resumes,” said Veronica Clark, an economist at Citigroup in New York. “Housing sector activity should continue to be supportive of GDP growth at least through the first half of 2021.”

Housing and manufacturing have outperformed other sectors of the economy during the pandemic. The government reported last week that building permits soared in January to their highest level since May 2006. But expensive inputs and lack of land pose a threat to continued robust housing market gains.

According to a survey of single-family homebuilders this month, record-high lumber prices were “adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects.” Softwood lumber prices jumped by historic 73% on a year-on-year basis in January.

There were 307,000 new homes on the market last month, up from 299,000 in December. At January’s sales pace it would take 4.0 months to clear the supply of houses on the market, down from 4.1 months in December. About 72.4% of homes sold last month were either under construction or yet to be built.

“Strong demand, a shortage of supply and rapidly rising prices is the perfect combination of factors that should convince builders that now remains a really good time to get the shovels in the ground,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

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