New York, NY—Charles Giovanni Vanzan Coutinho wears and has worn a variety of hats. He used to teach history at St. Francis College in Brooklyn Heights, but then abandoned the position to take over his family’s real estate business. He's one of numerous hosts of the podcast, New Books Network, where he had the honor to interview Jeffery Sachs, a leading American economist. And he’s the president of the Sutton Area Community since 2017, a civics organization that works hard to maintain the quality of life in the East Side enclave.
It’s been a fulfilling role to be SAC’s president, but he’s had his share of distress.
For example, SAC was deeply involved in organizing the neighborhood's opposition to stop the city from building a ramp for bicyclists that would run along Clara Coffey Park on E. 54th Street and link a bridge over the F.D.R. Drive to a new esplanade along the East River. It’s part of a plan to complete an unbroken bike-and-pedestrian path around Manhattan.
The organization, Cannon Point Preservation Corporation, was formed to initiate litigation against the city, but it recently lost an appeal in New York State Supreme Court. While CPPC's counsel advised against challenging the decision further, the plan is obviously on hold because of the fiscal distress the city is now facing.
“It could very well be that the mayoral administration will rethink the project—the lowest base cost was $100 million. Given the financial difficulties the city is experiencing due to COVID-19 and the concomitant recession, or if you like, depression, they may rethink the project given the costs,” Coutinho said.
According to Coutinho, the construction of the ramp amounts to “destroying” the Park because it will force the area’s elderly residents to compete with bicyclists to access the park’s benches, and they may not be able to dodge bikes fast enough.
“For starters, this particular park is the only park in the area which doesn’t require someone to use steps. We have some small pocket parks on 58th, 57th, 56th and 55th Streets but all of those have steps and ramps, this is the only pocket park which does not have that, and again, for an elderly demographic that is a very big advantage."
Coutinho is the managing director of Coutinho Properties, which owns 100 units in the Upper East Side. Like the city’s budget, no economic sector has been untouched by the coronavirus, including real estate. But his firm has been fortunate because it owns only two retail spaces. And while there was fear early on among landlords about rent collection, the collection rate, at least in Manhattan, has been around 85 to perhaps 90 percent.
That could change quickly, however, if Congress and the White House don’t agree soon on a new bill that extends the $600 weekly enhanced unemployment benefits.
Also, a problematic scenario for the real estate sector during COVID-19 is the depreciation of valuations in terms of properties, which Coutinho said was already going south.
“It was already on a downward trajectory because of changes in the rent law and uncertainties about irresponsible people talking about universal rent control, but COVID-19 and the concomitant recession or depression just increased the downward slope in valuations.
“In essence, to purchase property right now is like trying to pick up a falling knife, a very dangerous exercise.”
He’s a member of the influential Real Estate Board of New York, a trade association for the real estate industry. A legislative priority for the group during the pandemic is that when the city’s Department of Finance releases its tentative assessment of properties for purposes of taxation in January 2021, it reflects the current financial crisis.
Coutinho said that, essentially, the real estate industry has been used as a milk cow to provide revenue to the city.
“To some extent a plausible exercise because valuations were going up, rents were going up, positive cash flows were increasing, etc.
However, he bemoaned the fact that the tentative assessments that were sent out in January 2020 did not reflect an impending fiscal crisis, but the hope and expectation of the real estate industry come January 2021 is that there will be a substantial reduction, 5 or 10 percent, in the assessed valuations of properties, particularly in terms of multi-family residential and landlords who own retail on a significant scale.
“To have increases in real estate taxes when their cash flows have been reduced anywhere from 10 to 20, 25 percent is quite ridiculous,” said Coutinho.
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