The construction site in June 2022 © Ondel Hylton
Construction has officially begun on yet another new residential skyscraper in Downtown Brooklyn. Located at 589 Fulton Street, The Brook is a 600-foot-tall luxury rental with 591 apartments and 30,000 square feet of indoor and outdoor amenities. Developed by Witkoff and Apollo and designed by Beyer Blinder Belle, the building broke ground just days before the 421-a tax abatement program expired, allowing developers to still cash in on the 35-year tax break.
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Photo by Patrick Tomasso on Unsplash
The 421-a tax abatement program, which gives real estate developers who construct new residential buildings a property tax exemption in exchange for designating a portion of the homes affordable, will expire on June 15 after state lawmakers last week did not renew it during the final day of this year’s legislative session. Even with it set to lapse, the controversial program will continue to cost the city revenue for decades, according to a new report. According to findings published Monday by the Independent Budget Office of New York City, the tax abatement program will cost the city over $1 billion annually until 2034, with total costs not ceasing until the fiscal year 2056.
Brooklyn Point in Downtown Brooklyn offers 421-a benefits through 2045; Rendering by Williams New York
The controversial 421-a tax abatement program that provides a tax break to developers who set aside affordable housing at new developments should not be replaced when it expires in June, says New York City Comptroller Brad Lander. According to an analysis released Wednesday by Lander’s office, the tax program will cost the city $1.77 billion in forgone tax revenue in 2022, without creating homes that are affordable to most New Yorkers. While Gov. Kathy Hochul unveiled a replacement plan as part of her budget, the comptroller, along with other elected officials, called the governor’s proposal too “modest” and instead wants deeper structural reform of the property tax system.
Billionaires’ Row. Photo: © 6sqft
As part of her State of the State address delivered earlier this month, Gov. Kathy Hochul promised to replace the 421-a tax abatement program with a new “effective” credit. Set to expire in June, 421-a gives New York real estate developers who construct new residential buildings a property tax exemption in exchange for designating a portion of the homes as affordable. As part of her executive budget, Hochul on Wednesday outlined her plan for a replacement program called “Affordable Neighborhoods for New Yorkers.” While the new program calls for the units built to be more affordable, much of the structure of the existing tax abatement remains in place.
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Photo via Flickr
In her first State of the State address Wednesday, Gov. Kathy Hochul announced a sweeping agenda that would address housing affordability, equity, and stability by growing the state’s affordable housing stock and expanding the housing supply. She also proposed a set of initiatives to address homelessness and housing instability. Hochul called the state’s housing needs “a complex challenge that requires an all-levers approach.”
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Photo of 1 Flatbush Avenue courtesy of Alexander Severin
Applications are now being accepted for 20 mixed-income apartments at a new Brooklyn high rise. The 19-story tower located at 1 Flatbush Avenue sits between Downtown Brooklyn and Fort Greene, conveniently located near a dozen subway lines, major shopping thoroughfares, and entertainment venues like the Barclays Center and the Brooklyn Academy of Music. New Yorkers earning 40 and 130 percent of the area median income can apply for the units, ranging from a $690/month studio to a $3,063/month two-bedroom.
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Image courtesy of NYC Department of City Planning
A proposed mega-project from Continuum Companies and Lincoln Equities on a large, partially-vacant site at 960 Franklin Avenue would include 1,578 apartments that would be divided evenly between market-rate and affordable units, Curbed reports. The developers are seeking zoning amendments from the city for a pair of 39-story towers, each 421 feet high plus 40 feet for a mechanical bulkhead, on a 120,000-square-foot site near the Brooklyn Botanic Garden in Crown Heights.
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In 1971, New York City launched a new program designed to encourage developers to build on vacant land. The program known as the 421-a tax abatement gave developers a ten-year exemption on paying taxes if they agreed to develop the underused land. At the time, the program made a lot of sense. In the 1970s, urban decay was rampant, even in many areas of Manhattan. But the program not only benefited developers. Owners who bought units in a 421-a tax abatement building also benefited since the bill effectively enabled developers to pass along their tax break to buyers who in turn could avoid paying taxes on their units for the first decade.
While the original 421-a tax abatement is essentially dead, there are still a few 421-a deals left for buyers. This reflects the fact that several of the condo projects that secured a 421-a exemption before the program was phased out are only now coming to completion. To help buyers looking to take advantage of this final round of 421-a benefits, 6sqft has compiled a list of some of the best deals left on the market.
We know that displaying guitars along a funky apartment wall or leaning one or two casually against a doorway is a regularly-employed home-staging move, but in this Bushwick “penthouse” at 38 Wilson Avenue, it somehow works. And you might not even have to have a record deal yet, as the one-bedroom condo with a private roof deck and platinum-selling views also comes with a 421-A tax abatement in place ’til 2035, lowering monthly common charges to $641 a month.
Rockin’ views, this way
Image courtesy of STUDIO V Architecture
A 2.2 million-square-foot mixed-use development site known as Astoria Cove, on nearly nine acres along the East River in Astoria, is seeking a buyer, asking $350 million, Crain’s reports. The site hit the market in mid-March in anticipation of the reinstatement of the 421-a affordable housing tax credit program that had languished since its expiration over a year ago amid debates between the Real Estate Board of New York (REBNY) and unions on whether to require higher wages in certain cases. Alma Realty Corp. hired Cushman & Wakefield investment company to market the site; according to sales executive Bob Knakal, “We wouldn’t have hit the market with Astoria Cove in the past 16 months because of the uncertainty around 421-a, but there’s been a sense of optimism in recent weeks that 421-a will be back and with it, the land market will strengthen.”
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