July 19, 2023

Benefits of 421-a tax break extended to Gowanus developers

Developers of certain residential buildings in Gowanus will qualify for a tax break with benefits similar to 421-a, the program which expired last year, Gov. Kathy Hochul announced on Tuesday. As part of an executive action issued by the governor, projects in the Brooklyn neighborhood that qualified for 421-a before it lapsed but won't meet the 2026 completion deadline would qualify for tax breaks. The order is one of several Hochul announced as a way to spur residential construction after state lawmakers failed to reach a deal on a housing plan.
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June 9, 2023

New York lawmakers fail to reach a deal on housing

Despite New York lawmakers claiming they reached a deal on a comprehensive package of housing proposals, the state legislature has failed to pass any meaningful bills during this legislative session, as first reported by the New York Times. Negotiations between state Democrats and Gov. Kathy Hochul on Thursday fell apart as the two bodies failed to reach a deal before the end of the legislative session on Friday. Lawmakers blamed Hochul for opposing their housing proposals, including those that protect tenants from eviction and major rent hikes, and the governor claimed lawmakers never presented her with any housing bills to approve.
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March 15, 2023

New York lawmakers clash with Hochul’s housing plan in budgets

The New York State Assembly and Senate on Tuesday released their budget proposals, which both deviate from the priorities of Gov. Kathy Hochul and set the stage for negotiations over the next two weeks. As first reported by City & State, the Senate's budget discarded some of Hochul's top goals, including the "New York Housing Compact," a plan to build 800,000 new homes over the next 10 years to address the state's looming housing crisis. The Senate did show support for "good cause" eviction protections and the creation of a Housing Voucher Program, two proposals omitted by the governor in the past.
Details here
June 15, 2022

600-foot-tall luxury rental breaks ground in Downtown Brooklyn and beats 421-a deadline

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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June 7, 2022

421-a tax break will continue to cost NYC revenue for decades after it expires, report finds

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.
Details here
March 17, 2022

NYC Comptroller calls for end of 421-a tax break, estimated to cost city $1.8B in revenue this year

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.
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January 20, 2022

Hochul outlines replacement for New York’s expiring 421-a tax break program

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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January 6, 2022

Hochul’s sweeping New York recovery agenda addresses affordable housing crisis, homelessness

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."
See Hochul's housing proposals
June 4, 2020

20 mixed-income apartments available at new Downtown Brooklyn tower, from $690/month

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.
Find out if you qualify
February 19, 2019

New Crown Heights mixed-use project could bring 800 affordable apartments

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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September 6, 2018

Is 421-a dead? Where to find NYC’s remaining tax abatement deals

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.
More here
July 25, 2018

$699K Bushwick ‘penthouse’ comes with a private roof deck and a 421-A tax abatement

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
April 3, 2017

Queens Astoria Cove waterfront site on the market for $350 million ahead of expected 421-a renewal

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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February 21, 2017

New bill would calculate AMI for affordable housing based on zip code, not region

To set qualification guidelines for its affordable housing lotteries, the city turns to the set area median income (AMI), basing annual household income and rents off this figure. However, as The Real Deal explains, "the U.S. Department of Housing and Urban Development calculates AMI regionally, "using a formula that lumps the five boroughs together with Putnam, Westchester, and Rockland counties." For 2016, this equated to $65,200 for a single person and $90,600 for a family of four, but a new bill proposed by Democratic State Senator Michael Gianaris and Assemblymember Brian Barnwell would require developers of new 421-a projects to calculate AMI based on the specific zip code in which the building is going up.
More info ahead
January 27, 2017

City says Cuomo’s ‘Affordable New York’ plan would cost an extra $820M

Governor Cuomo recently announced that his revised version of the city's 421-a tax exemption program would officially be moving forward. He said the initiative, dubbed "Affordable New York," would create 2,500 new affordable housing units per year, but a new study from the city's Department of Housing Preservation and Development says this will come at a cost. As Politico reports, Cuomo's changes to the program would cost NYC an additional $820 million over 10 years if approved by the state Legislature, $82 million a year more than Mayor de Blasio's proposed 421-a overhaul in 2015.
January 16, 2017

Cuomo dubs revised 421-a plan ‘Affordable New York,’ advances new legislation

A year after the city’s 421-a tax exemption program expired, a new version of the affordable housing incentive is officially moving forward. In August, Governor Cuomo released a new version of the plan that which include wage subsidies for construction workers and extended terms for the tax breaks, and after the Building and Construction Trades Council of Greater New York and the Real Estate Board of New York (REBNY) reached an agreement in November to move ahead with this version, the Governor's office now reports that they'll be advancing new legislation to move ahead the program that's now been re-named "Affordable New York." Cuomo says this will create 2,500 new affordable housing units per year.
All the details this way
November 23, 2016

178 residential buildings may lose 421-a tax breaks if they don’t file as rent regulated

A recent report detailed how nearly two thirds of the city's 6,400 rental buildings where landlords received 421-a tax breaks didn't file properly as rent stabilized, meaning they could raise the rents as much as they chose. Now, 178 of these buildings may lose the coveted exemptions if they don't start complying with the regulations. The Post reports that the Department of Housing Preservation and Development sent out warning letters to these landlords, who altogether represent 1,400 apartments, telling them if they don't comply within 90 days their benefits will be "revoked retroactively."
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November 11, 2016

Cuomo’s revised 421-a plan will move ahead as REBNY and construction trades come to agreement

Ever since the city's 421-a tax exemption program expired in January, the Building and Construction Trades Council of Greater New York and the Real Estate Board of New York (REBNY) have been negotiating under what terms to extend and/or modify the program. Both groups took part in what the city believes were "secret talks" with Governor Cuomo over the summer, after which he released his proposal to revise 421-a with wage subsidies for construction workers. REBNY was concerned about this stipulation, claiming it would increase construction costs by up to 30 percent, but a press release sent yesterday evening reports that they've reached an agreement with the Trades Council to move ahead with Cuomo's version of the plan, which, in addition to setting a $60 hourly wage for qualifying projects in Manhattan and $45 in Brooklyn and Queens, extends the tax breaks up to 35 years (up from de Blasio's proposed 25 years) and mandates newly created affordable units be kept in place for 40 years.
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November 7, 2016

City says under-construction 421-a buildings must include housing for the homeless

As 6sqft reported last week, Governor Cuomo, developers, and unions have been engaging in closed-door talks to bring forth his revision of the city's 421-a program that includes wage subsidies and an extension of the previous 25-year tax break up to 45 years. Glaringly (but not surprisingly) absent from the negotiations is Mayor de Blasio, but he's now taking matters into his own hands, at least when it comes to those under-construction buildings that got in to the program before it expired in January. According to the Times, the de Blasio administration introduced a new policy that says these projects must include housing for some of the 60,000 New Yorkers currently living in homeless shelters, but developers, particularly Extell's Gary Barnett, are not happy about the changes.
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November 4, 2016

POLL: Should Cuomo’s revised 421-a plan move forward?

The city's hotly debated 421-a tax abatement program expired in January after a 44-year run. CityRealty reports that the NYC Department of Housing Preservation & Development has seen the number of applications for tax exemption decrease by 45 percent from that time to September 2016, costing the city $1.2 billion this fiscal year. Over the summer, the Governor presented a revised version of the program that would offer wage subsidies to construction workers, but this drew concern from the Real Estate Board of New York, who say the proposal would cause construction costs to rise by up to 30 percent. Now, Politico reports that Cuomo, developers, and unions have been engaging in closed-door negotiations to bring his plan forward and extend the previous 25-year tax break up to 45 years (REBNY and the Mayor had presented a 35-year extension last summer).
Tell us if you think the Governor's plan should move ahead
October 27, 2016

MAP: Two thirds of landlords benefiting from 421-a tax breaks didn’t file rent regulation paperwork

The city's 421-a program, which expired in January, provides tax breaks of up to 25 years to new residential buildings that reserve at least 20 percent of units as affordable. Proponents of the program feel it offers a much-needed incentive to build low- and moderate-income housing, but those not in favor think it gives unfair tax breaks to the wealthiest developers. The latter camp may be gaining steam, as a new report from ProPublica, outlined in Gothamist, says that nearly two thirds of the 6,400 rental buildings where landlords received tax reductions through 421-a didn't have required rent stabilization paperwork on file, meaning they could raise rents as much as they chose. ProPublica compiled this data in both an interactive map and searchable database.
Is your landlord cheating the system?
September 19, 2016

A Trump empire built on $885 million in tax breaks has cost the city a fortune

If you've followed Republican presidential nominee Donald J. Trump's gold-plated real estate career, you might already know how much of his success has been due to his family's extensive political connections–and generous tax breaks, grants and incentives from the government and taxpayers. In case you haven't read Trump's 1987 bestseller "The Art of the Deal," the New York Times illuminates the role that hundreds of millions in tax breaks have played in the Trump empire. While Trump may not be much different from other developers in seeking tax breaks, the candidate vociferously paints a picture of a rigged system and a fixed game. But these very fixes have enabled him to achieve a net worth estimated at 4.5 billion and the opportunity to indulge a run for the nation’s highest office.
So what's been going on here?
August 18, 2016

Cuomo wants to revive 421-a program with wage subsidies

One of the biggest snags in Mayor de Blasio's ambitious affordable housing plan (to add/preserve 200,000 such units over the next decade) has been his contention with Governor Cuomo over the city's 421-a program, which provides tax breaks for up to 25 years to new residential buildings that reserve at least 20 percent of units as affordable. The program expired in January, fueling concerns that permits for new rental units would drop as developers face skyrocketing land prices and be replaced with even more luxury condos. Now, after months of uncertainty, the Times reports that the Governor "has offered developers and union officials a wage subsidy for construction workers in the hopes of reviving [421-a]." His proposal was sent out as a single-page memo to residential developers on Tuesday night, presumably unbeknownst to de Blasio. Though it doesn't require union work force or prevailing wages, it does set a $65/hour minimum for projects south of 96th Street in Manhattan with 300 or more units and a $50/hour minimum for those of the same size along the Brooklyn and Queens waterfronts, $15 of which will be paid for by the state. These projects will be required to set aside 25 to 30 percent of units as below-market rate rentals.
More details ahead
July 29, 2016

The Bronx Dethrones Brooklyn for Most Residential Permits Issued

For the past four years, Brooklyn has had more residential permits issues through the Department of Buildings than any other borough. But according to a report from the New York Building Congress shared by DNAinfo, during the first six months of 2016, the Bronx has taken the lead, accounting for nearly 32 percent of all permitted units, a major jump from its 11 percent average over the past four years. For comparison, last year Brooklyn had a staggering 26,000 units permitted, but this year fell to 1,400; the Bronx had 1,900 units authorized this year. Brooklyn's sharp decrease is part of a city-wide drop after the 421-a program expired at the beginning of the year that caused developers to rush to get their permits in at the end of 2015. But the Bronx's surge is likely due to a huge affordable housing push: "More than 43 percent of the units that began construction in the first six months of this year under Mayor Bill de Blasio's ambitious affordable housing plan... were in the Bronx."
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