WEBVTT - Kathryn Wylde Talks NYC Real Estate, Housing

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Gottie Wild, Great to see you. We're here in Hudson

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<v Speaker 2>Yards at HSBC's new trading floor, shiny and new. But

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<v Speaker 2>it really does send another message about Wall Street's ambition

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<v Speaker 2>in New York. And I suppose there is the battle

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<v Speaker 2>against Miami. But what do you think it says to

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<v Speaker 2>the global community. I buy Hudson Yards and New York Finance.

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<v Speaker 3>Well, no contest with Miami. Let's start there.

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<v Speaker 1>But what it says really is that New York is

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<v Speaker 1>constantly reinventing itself and Hudson Yards represents more than twelve

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<v Speaker 1>million square feet of new office space built in New

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<v Speaker 1>York in the last seven years, and it's basically renting

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<v Speaker 1>like hotcakes at the highest commercial rents we've ever had,

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<v Speaker 1>and the space is fantastic. Part of the motivation for

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<v Speaker 1>that is that a lot of our older real estate

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<v Speaker 1>needed to be rebuilt and so companies have relocated. But

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<v Speaker 1>it also is because remote work has created a phenomenon

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<v Speaker 1>where people want to come to a great place to

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<v Speaker 1>work and getting people back to the office. Part of

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<v Speaker 1>the secret sauce is having a place like Hudson Yards

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<v Speaker 1>and a trading floor like the one you see here.

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<v Speaker 2>And that's essentially what Michael just said. He's the HSBC CEO.

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<v Speaker 2>He doesn't want to dictate people coming back. He wants

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<v Speaker 2>people to come back to nucleus like this. But if

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<v Speaker 2>I look at the commercial property empty spaces in New

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<v Speaker 2>York that is at a record high, Katy. And the

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<v Speaker 2>question is is the city doing enough to regenerate those properties,

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<v Speaker 2>either for homes or regeneration full stop.

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<v Speaker 1>Well, the state and city together just in the last month,

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<v Speaker 1>has passed new legislation that creates the proper zoning and

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<v Speaker 1>tax incentives for the conversion of our older commercial buildings

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<v Speaker 1>to residential use. And downtown we saw that after nine

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<v Speaker 1>to eleven, Remember everybody thought New York was going to

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<v Speaker 1>be deserted, and with a very short period of time

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<v Speaker 1>with incentives for how in conversion, it became the fastest

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<v Speaker 1>growing residential community in the country.

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<v Speaker 2>Do you think we can replicate that?

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<v Speaker 3>Absolutely?

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<v Speaker 2>So we're not on a doom loop.

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<v Speaker 3>No, quite the contrary.

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<v Speaker 1>I mean in New York, it really takes because property

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<v Speaker 1>values are so strong here and the demand is so

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<v Speaker 1>high that it takes a crisis to kind of free

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<v Speaker 1>things up. And reinvent yourself. And that's what's exactly going on.

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<v Speaker 1>So it's the opposite of a doom move. It's really

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<v Speaker 1>the next plateau for the next era of New York's

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<v Speaker 1>growth and prosperity.

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<v Speaker 2>And here's the thing. Is a global city and it

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<v Speaker 2>is it is destination number one for competal markers. But

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<v Speaker 2>if we look at the two burning issues at a

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<v Speaker 2>global level, one is affordability of heising. It's not just

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<v Speaker 2>a New York problem. It's a global problem with cities

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<v Speaker 2>and safety. I want to square away safety. The National

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<v Speaker 2>Guard are on the subway. There's more police on the subway.

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<v Speaker 2>Do you look at that as a reassurance or is

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<v Speaker 2>actually things are getting pretty out of control here.

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<v Speaker 1>We're still in recovery from the pandemic in terms of

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<v Speaker 1>the subway's, subdy safeway safety. During the pandemic, when people

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<v Speaker 1>were not traveling to work, when we had a lockdown,

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<v Speaker 1>we had a period of time where there was a

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<v Speaker 1>lot of takeover of the subways by what might say

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<v Speaker 1>undesirable elements. We're losing a lot of money.

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<v Speaker 3>Through fair evasion.

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<v Speaker 1>Folks are moving into the subway and they're finding some

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<v Speaker 1>opportunities for crime, and so.

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<v Speaker 3>We need police in the subways.

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<v Speaker 1>We've got a great programs in the case of people

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<v Speaker 1>who are mentally ill who have moved into the subways.

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<v Speaker 1>You know a lot of patients and prisoners were moved

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<v Speaker 1>out of institutions during the COVID to prevent infection, and

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<v Speaker 1>we've ended up they ended up many of them in

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<v Speaker 1>the subways.

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<v Speaker 3>So we are really working hard.

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<v Speaker 1>The MTA has made this a top priority, and in fact,

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<v Speaker 1>last month's subway subway crime was down substantially, so we're

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<v Speaker 1>in the right direction on that.

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<v Speaker 2>What does the city say when Mayor Adams will be

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<v Speaker 2>here a little bit later on, I'm just wondering what

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<v Speaker 2>you're gonna say to him in terms off does he

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<v Speaker 2>need to do more on bail reform. I know there's

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<v Speaker 2>political obstacles in Albany to this. You're the voice of

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<v Speaker 2>this city. What are you going to say to him?

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<v Speaker 1>Just to be clear, the state, not the city, is

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<v Speaker 1>in charge of the laws controlling criminal justice. So Mayor

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<v Speaker 1>Adams can as an advocate for stronger enforcement for criminal

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<v Speaker 1>justice reform. But right now bail reform is really not

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<v Speaker 1>so much of an issue. We've got issues in what's

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<v Speaker 1>called discovery laws that were reformed that make it very

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<v Speaker 1>difficult for the prosecutors, for the district attorneys to bring

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<v Speaker 1>a case. So we've seen dismissal of cases go up

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<v Speaker 1>fifty percent on technical grounds because of the laws, and

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<v Speaker 1>that's where the challenge is. And I think we're going

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<v Speaker 1>to make sure that something is done about that in

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<v Speaker 1>the legislature next year to try and get that fixed.

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<v Speaker 3>But it is a small course correction.

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<v Speaker 1>We actually have a very balance criminal justice system, and

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<v Speaker 1>we're working hard to make sure that we enforce it.

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<v Speaker 2>The second issue is housing. Ninety five percent of New

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<v Speaker 2>York's housing is technically unaffordable for workers on average wages.

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<v Speaker 2>So let's talk about big New York, not the top

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<v Speaker 2>one percent. What more, there's no quick fix on this.

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<v Speaker 2>What more can New York and the city do in

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<v Speaker 2>this regard converting older premises to housing? What are you advocation?

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<v Speaker 1>Once again, it took a little extra time, like two years,

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<v Speaker 1>but we have now past legislation which creates a new

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<v Speaker 1>housing Production program, which provides for, as we mentioned before,

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<v Speaker 1>the conversion of older commercial buildings to residential. It provides

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<v Speaker 1>for upgrading illegal basement apartments so that they're safe and sanitary.

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<v Speaker 1>It increases the zoning allowances so that higher density housing,

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<v Speaker 1>more units can be built. We are on track to

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<v Speaker 1>address our housing problem. As you say, there is a

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<v Speaker 1>leg time, but we're definitely on track.

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<v Speaker 3>It is top priority.

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<v Speaker 1>We want that young talent to be able to move

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<v Speaker 1>to New York and not have to live five to

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<v Speaker 1>an apartment, so we're working hard on that issue.

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<v Speaker 2>Do you think they're moving fast enough and hard enough.

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<v Speaker 3>I think they're moving as fast as they can.

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<v Speaker 1>Housing is tends to be an issue that is complicated

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<v Speaker 1>because you have tenants rights versus landlord rights versus development rights,

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<v Speaker 1>so it's a complicated issue.

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<v Speaker 3>I'd love to get your opinion.

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<v Speaker 2>We're going into full electioneering mode between now and November.

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<v Speaker 2>What is the sentiment, what is the partnership talking about

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<v Speaker 2>it in terms of the upcoming presidential election, highest risk

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<v Speaker 2>and host opportunity.

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<v Speaker 1>Well, I would say the upcoming presidential election. We're a

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<v Speaker 1>little worried that all of president ex president Trump's criminal

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<v Speaker 1>trials have been brought in New York, or several of them,

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<v Speaker 1>so that you know, we're concerned that if he's elected,

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<v Speaker 1>he not take it out on New York fully because

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<v Speaker 1>he's a queen's boy from New York.

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<v Speaker 3>He won't and I hope not. I'm just saying that's

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<v Speaker 3>a worry go to York.

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<v Speaker 1>But and then on the on the on the upside,

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<v Speaker 1>our New York economy is doing well. We're driving the

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<v Speaker 1>national economy in a positive way. And I want to

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<v Speaker 1>say that we're the capital of finance because companies like HSBC,

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<v Speaker 1>who are global giants, a couple centuries of global giants

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<v Speaker 1>have chosen to make a commitment to New York, to

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<v Speaker 1>move into a place like Hudson Yards, to invest here,

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<v Speaker 1>and they're very committed here. So that's really important to

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<v Speaker 1>keeping us a global financial capital, regardless of who's president.

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<v Speaker 2>What's the talk in the partnership like Jamie Diamond going

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<v Speaker 2>to Washington?

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<v Speaker 3>Would you be would you be all cheering that on?

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<v Speaker 3>Is there?

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<v Speaker 2>Is there? Is there a discussion Aby domald Well.

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<v Speaker 1>We certainly don't want him to leave before his new

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<v Speaker 1>building opens on Park Avenar because that's a billion dollar, no,

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<v Speaker 1>a multi billion dollar investment in New York City and

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<v Speaker 1>we want to see JP Morgan safely ensconced in their

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<v Speaker 1>new build. So but we could do worse as our

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<v Speaker 1>next Treasury secretary.

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<v Speaker 2>Thank you very much Kathy for joining me on Bloomberg today.

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<v Speaker 3>Thank you for having me on