State Sen. Michael Gianaris announced on Tuesday plans to draft legislation aimed at cracking down on insider dealing in real estate. The proposed law comes after a report in the Wall Street Journal found Amazon employees were buying condos in Long Island City before the company had publicly announced plans to build their second headquarters in the neighborhood. The legislation would prohibit anyone from using confidential government information to buy or sell real estate, according to Gianaris.
“Trading on insider information is illegal with securities and should be illegal with real estate,” Ginaris said in a statement. “No one should be cashing in on confidential inside information.”
The WSJ article that prompted the proposed law found the employees who were looking for condos in Long Island City are now under contract to buy. Following the tech company’s announcement to open its “HQ2” in the Queens neighborhood, interest in real estate there has surged, driving up prices.
As 6sqft previously reported, searches for residential apartments in the neighborhood are up 281% compared to the daily averages prior to the announcement, according to CityRealty.
A spokesperson for Amazon told WSJ in a statement: “We announced the locations to employees at the same time as it was announced publicly. We employ more than 4,000 in NYC that live and work in the tri-state area. Amazon has no evidence that any employee who may have made a property purchase in the locations before the announcement had any advance knowledge of the location selections.”
Gianaris’s legislation would make “insider dealing” in real estate a Class-E felony, for those who use non-public government information to buy or sell property. The senator has previously announced plans to introduce another law aimed at prohibiting the use of non-disclosure agreements as part of economic development negotiations; city officials had signed nondisclosure agreements during the vetting process with Amazon. Gianaris will introduce the law when the legislature convenes in January.
And the New York City Council will host three hearings to question both city leaders and Amazon executives about the deal. The Council hopes the hearings, with the first planned for next week, give officials who were left out of the process a clearer understanding of the deal.
“One of the major perversions of this is that was all done behind closed doors, with nondisclosure agreements, and without the public or elected officials who weren’t including feeling like they had any say,” Council Speaker Corey Johnson told the WSJ.
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Neighborhoods : Long Island City