The mad rush to qualify projects is over, and with the property tax break 421a expiring today, New York developers must confront the possibility that it will never come back.
Gov. Kathy Hochul had floated a replacement program, dubbed 485w, but it sank like a lead balloon in Albany. State lawmakers showed little appetite to revive or replace the tax incentive for New York City multifamily construction, and the issue is not expected to be addressed until the next legislative session — if then.
In a joint statement, the Real Estate Board of New York, 32BJ SEIU and the New York Building and Construction Trades Council, said in a statement that it is “hopeful that lawmakers will work productively with our growing coalition to address the city’s housing crisis.”
Last week, Mayor Eric Adams reiterated that he believes state lawmakers will figure out how to adjust affordability thresholds to secure approval of a reformed tax break.
In the immediate term, industry experts expect the number of applications for new apartment buildings to plunge, as it did the last time the tax break lapsed. Developers who scrambled to complete their projects’ foundation footings, a requirement to qualify for the incentive, will either move forward with construction or flip the site to another builder. Those who missed the deadline will likely wait for a new tax break or broader tax reform.
Ofer Cohen’s firm TerraCRG estimates that 80 building applications were filed in the past 12 to 18 months in Brooklyn alone in hopes of qualifying for the tax break before it expired.
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