Trends such as conversions and a greater awareness of a housing shortage offer hope — but borrowing costs and local opposition can be formidable

The son of a city employee and a social worker, Slate Property Group co-founder and principal David Schwartz seems to have the whole public service thing imprinted on his mission statement in life despite going into the private sector.

The Flatbush, Brooklyn-born developer attended public schools before starting a career in investment banking at J.P. Morgan Chase, later deciding upon a more entrepreneurial path through real estate with his first big project kicking off in his native Brooklyn in 2005 at 924 Metropolitan Avenue.

But establishing Slate Property Group with Martin Nussbaum in 2013 really kicked things into high gear. The firm has developed about 17,000 units since its inception in not only New York City, but also throughout the East Coast, and catering to every income bracket depending on the community Slate chooses to invest in.

For example, Slate has built homes in Far Rockaway, Queens, that were 100 percent affordable housing, while in Greenwich Village it constructed luxury condos where more well-to-do New Yorkers tend to congregate.

One of its most notable contributions to alleviating the city’s housing crisis has been the conversion of the JFK Hilton in South Jamaica, Queens, into 318 apartments reserved for formerly homeless residents.

This has teed up Slate for yet another high-profile project with New York Mets owner Steve Cohen and Hard Rock International to add affordable housing as a component to Hard Rock’s bid for a casino near Citi Field. The proposed casino and housing along with a hotel, park space and other elements form a 50-acre, $8 billion project known as Metropolitan Park.

Commercial Observer caught up with Schwartz early last week to talk about those and other affordable housing plans, Slate’s financing business, and recent zoning changes in New York City that make the company’s job a little easier.

‍This interview has been edited for length and clarity.

‍Commercial Observer: What was your journey like getting into affordable housing?

‍David Schwartz: I started building in Brooklyn in 2004, so Brooklyn was at that point really changing from the Brooklyn that I grew up in. And I saw a huge opportunity to start building there. I quickly realized that there were a lot of great things going on, but we were also starting to price out a lot of the people that made Brooklyn the great place that it was, and we were sort of forgetting about a lot of those folks.

So affordable housing became really interesting to me early on, and then when we started Slate in 2013 it became a real focus of ours. We realized that this city was great, that New York was adding population, people were moving here, there was job growth, the city was safer, we’ve added all these industries. But we had made it too expensive for many people who grew up in New York to move back. We’ve made it too expensive for many of the same kinds of immigrants that had lived here and had come here that were our own grandparents — they couldn’t have that same lifestyle. It became near and dear to my heart and something that I’ve set out to change. That’s one of our main goals here.

How is the pro-housing City of Yes zoning overhaul making things easier for you?

City of Yes was a massively innovative change. I know how hard it was to get done because we do a lot of things, and to get people in a city like New York to agree. … New Yorkers have lots of strong opinions about everything, and whether to build more in their neighborhoods draws one of the loudest opinions that you might hear.

I think it’s revolutionary. I think we’ll look back on this as one of the smartest things that we’ve done in housing. Generations from now, people will be teaching classes about what they did in terms of the zoning side. But, as great as it is, it alone can’t solve all the problems, and we need more money, and we need more creativity.

Costs are going up with inflation, and the tariffs are only expected to exacerbate the cost of materials and whatnot. How are you preparing for that?

I don’t really have an opinion yet on it, but I’d say the interest cost has been really hard for the industry, especially on affordable housing, because on the market-rate and condo side you can always charge more. But, on the affordable side, people can only pay what they can pay, and frankly, it’s usually regulated.

I think that there’s a lot of economies of scale there, and we’re working a lot of times with the same design team to think about cost as we’re designing it. Our buildings look great. They’re amazing. If you go see them, you can’t tell the difference between our market-rate and affordable.

But we’re able to keep costs in line because we’re thinking about cost as we design.

How are things going with the lending arm of Slate’s business?

The idea there is that we’re lending to people who need construction lending and bridge capital after the banks and a lot of the regional players have pulled back, right? So there was a huge opportunity for people who wanted to develop, but they didn’t have the money to do it. Because we understand development and construction so well, we were able to lend to these projects.

We started doing stuff in the New York market, and then quickly we got into North Jersey and recently we’ve been very active in South Florida. The country needs more housing, and we want to be part of that. So now it’s whether we’re developing that housing or we’re lending it to others to develop that housing.

Tell me a little more about how things are going with the affordable housing development near Citi Field.

Corona, Queens, is a working-class neighborhood. It’s a big immigrant community where people come here from other countries to make a life for their family, and, I think, sadly, it has become more expensive.

That’s a huge challenge that we’re having. I credit getting an investment from outside folks that have not traditionally invested in affordable housing to lower the cost — groups like Steve Cohen of the Mets and Hard Rock — to help to leverage that capital with city capital to make it less expensive for the city and to build 100 percent affordable. I think the key thing is that all those units will be affordable.

Slate’s role in this world is to continue thinking outside the box, and we think other people will follow us as we do it. We’re going to bring up ideas like converting the first hotel in New York state history to 100 percent affordable [the JFK Hilton project]. That’s a building that’s going to be opened in 18 months — half the time that it would take to build from the ground up. Do you know how much money we’re saving on that building just because we only have to pay interest for 18 months instead of 36 months?

I think there can be 10 projects like that, or 20 projects like that, right? So the idea is that we can start replicating that. I was at an event the other day, and somebody said, “I’m going to copy what you guys did over in the JFK Hilton.” That’s the reason we’re doing it. We want people to do the same things, right?

Everybody’s sort of waiting for a term sheet to tell them what to do. There’s risk around it, absolutely, but we’re willing to take the risk for this kind of outcome.

‍Now you guys issued $1 billion in loans in 2024. Do you see that momentum going forward this year?

I think this year has been off to a really good start. I think we are undersupplied in housing in these markets where people are continuing to move. There’s growth in a lot of these Eastern cities and tremendous rent growth in a lot of markets. We’re still seeing population growth in South Florida, and we’ve done a lot of stuff that is not at the ultra high end of the marketplace. I think it’s going to continue going. I feel pretty optimistic about this year.

What sort of challenges have come with your recent projects in Queens and Brooklyn?

New Yorkers are very spirited, so I don’t think that you can ever do something where neighborhoods don’t have strong opinions. A lot of times you hear that people care about height or affordability or things like that. Truthfully, the biggest thing at the Yellowstone in Forest Hills, Queens, was that they wanted a supermarket to come back

You have a lot of seniors there who really can’t walk that far, and they’re not ordering food online and groceries and things like that, right? You’re not going to change the way an 80-year-old is doing things overnight — it would be really problematic.

So we worked with the community hand in hand, and we brought back a supermarket. It’s not the first time we’ve done it.

There are a lot of people that own properties and they don’t want to sell them, but they have a lot of air on top of them. They may have a one-story supermarket. So we said to these owners, “Why don’t we build a building here and give you back the supermarket”” We need housing, but the neighborhood needs the supermarket. We can have both, and this is a true win-win. The air is just sitting there, not doing anything.

We did a partnership there with Dan’s Supreme Supermarkets. We’re on our third deal with these guys now.

People don’t like change, and they don’t like things that are out of their control, right? So, in any of these communities, we want to hear what people have to say. It’s not to say that everybody’s going to always agree. If you’ve ever been to a community board meeting, New Yorkers tell you what they think, but I think, you know, we want to get to a place where we can air our grievances.