What’s at Stake for Real Estate if Socialists Breach City Council

Shaniqua Juliano

The Democratic Socialists of America are scheming to expand their constituency, decommodify housing and undermine the real estate industry. (iStock) Just a few months after nearly sweeping their state primary contests, socialists in New York City aren’t putting down their hammers and sickles. The Democratic Socialists of America are scheming […]

The Democratic Socialists of America are scheming to expand their constituency, decommodify housing and undermine the real estate industry. (iStock)

The Democratic Socialists of America are scheming to expand their constituency, decommodify housing and undermine the real estate industry. (iStock)

Just a few months after nearly sweeping their state primary contests, socialists in New York City aren’t putting down their hammers and sickles.

The Democratic Socialists of America are scheming to build on those wins, including by establishing a City Council caucus.

The group also plans to take advantage of the economic crisis to decommodify land and housing by “systematically undermining” the political power of the real estate industry, according to an internal document obtained by The Real Deal. It also aims to organize working-class tenants of color against displacement, the document says.

To accomplish those goals — although the group has not won much besides elections since a crushing victory over landlords in the 2019 rent law battle — it is turning increasingly to city politics.

“[The City Council] doesn’t have a lot of power to enact a socialist agenda”

— anonymous DSA member

The project will be a multi-year endeavor, the document explains. The strategy is still under development but some plans are beginning to take shape, notably one to field a slate of socialist City Council candidates next year.

Using its blueprint from the state Assembly and Senate races, DSA will ask potential candidates to make a case for the group’s endorsement by filling out a questionnaire which asks, among other things, if the candidate will run openly as a socialist.

Candidates who come through the grilling would get the socialist juggernaut’s support, including a door-knocking, phone-banking ground game that few foes have overcome.

Should socialists gain a foothold in the New York City Council, it would surely alarm real estate developers and business leaders, even if it is not yet clear what the group could accomplish.

Chicago offers some clues. There, a campaign to peel back a state restriction on rent control catapulted the coalition into legislative power: a socialist caucus of six aldermen. That group represents just 12 percent of the City Council, however, so it needs help from other members to accomplish its goals, which include making universities pay property taxes and raising the real estate transfer tax on properties that sell for more than $750,000, according to Medill Reports.

Chicago alderman Jeanette Taylor (Chicago City Clerk)

Chicago alderman Jeanette Taylor (Chicago City Clerk)

One of the Chicago socialists, Jeanette Taylor, the alderman of Chicago’s 20th ward, was able to negotiate a community benefits agreement with developers for affordable housing around the Obama center. And Carlos Ramirez-Rosa, representing the 35th ward, successfully fought for a 100 percent affordable development.

However, the caucus’ legislative demands for housing relief in light of Covid were not met, according to Robin Peterson, co-chair of the Chicago DSA, largely because of Chicago Mayor Lori Lightfoot.

In September, Chicago’s socialist members teamed up with progressives to introduce a plan requiring developers to set aside more affordable units in new buildings.

Socialists’ next big election is a City Council contest in Los Angeles, where the DSA chapter endorsed Nithya Raman, an urban planner who worked with slum-dwellers and squatters in India. She faces incumbent David Ryu in a run-off Nov 3. Raman has made ending homelessness her top priority and toward that end says she would push for tenants to have a right to counsel, a rent freeze and emergency cash if they face eviction.

In New York City, where socialists have already enjoyed significant electoral success, winning several of the 51 City Council seats is well within the realm of possibility.

But a socialist perch at City Hall would not lead to an overhaul of city taxes, as that authority largely belongs to the state, as does any expansion of rent regulation.

One DSA member said the City Council, which derives most of its power through its control of land use, can in theory “enact a capitalist agenda, but it doesn’t have a lot of power to enact a socialist agenda.”

“It has the potential to be immensely counter-productive”

— Paul Selver, land-use co-chair, Kramer Levin, on an obstructionist strategy on development

However, the New York City DSA’s co-chair, Chi Anunwa, said, “By engaging in land use and development fights, socialist Council members can work with state candidates to bring social housing to New York.” Social housing is not a familiar term in the city, but she identified the goal as “housing for all in New York.”

Winning seats would position socialists to win land-use fights in districts they represent, as the full council typically defers to the local member on rezoning proposals. A socialist caucus could also draw more attention to zoning proposed in colleagues’ districts, potentially obstructing real estate development in New York City.

But there’s a rub: In interviews with half a dozen DSA members who have a hand in crafting the strategy for such a caucus, it emerged as likely that socialists would flout City Council customs, notably deference to the local member on land use matters.

Members who break that tradition could not expect deference from the rest of the chamber when a development project came to their own districts.

One DSA member said on condition of anonymity that rules including member deference would certainly be publicly disrespected by any DSA-backed Council member. Those elected under DSA’s mantle would be expected to “play hardball” with the speaker of the City Council, the person added, emphasizing that they would not just be “part of some gentleman’s club.”

On social media, one DSA member opined that a socialist City Council could block rezonings, holding the real estate industry “hostage” to extract legislative wins on the state level, such as repealing the Affordable New York tax benefit for developers, passing Sen. Julia Salazar’s Good Cause eviction bill, and putting more units under rent stabilization.

Paul Selver, Kramer Levin

Paul Selver, co-chair of land-use at law firm Kramer Levin, likened that strategy to a “Mitch McConnell tactic,” referring to the U.S. Senate majority leader.

“It has the potential to be immensely counter-productive,” Selver said. “We’re not really in a position where people should be stopping development or foreclosing the potential for good projects to move forward in order to achieve some other objective that is otherwise unrelated to the project.”

It is a convoluted if not far-fetched scenario in any event, and would require socialist City Council members to gin up significant support from colleagues.

““We want to fight back in a coordinated way”

— Andrew Hiller, DSA member, Lower Manhattan

Another DSA member said that the group would be “walking into an inherited nightmare” in 2021, as the economic plight of New York City will likely lead to reductions in the city workforce and social services. In addition, whoever wins the mayoralty in 2021 will likely not be a DSA-backed candidate, the person said.

But even if the socialists win only a handful of seats, it could influence other City Council members to support far-left causes, lest they face socialist challengers in the 2025 elections. Incumbents, once nearly invulnerable in New York City elections, have in the past three years become susceptible to insurgent candidates running under the DSA banner.

“The standard reaction is that, if you’re being primaried from the left, they won’t want [a rezoning] because developers will make money,” said Selver. “But in a world where everyone is rational, the Soho-Noho rezoning would move forward and be a place where the left, right and center could get together to bring the zoning up to date and provide a social good.”

The socialist group hopes to create a citywide vision instead of attacking each proposed rezoning separately. In justifying such an approach, Andrew Hiller, a member of DSA in Lower Manhattan, argued that the mayor and the real estate industry coordinate to advance a citywide agenda, so it’s not unreasonable that the left would as well.

“We want to fight back in a coordinated way,” said Hiller, “instead of having a defensive posture and fighting one-by-one.”

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