Rendering courtesy of Related/Oxford.
The $20 billion, 28-acre Hudson Yards megaproject has been in the news recently as its official March 15 grand opening approaches. The New York Times reports that the nation’s largest residential development has gotten more than a little financial help from the city government to get there. In fact, public records–and a recent study by the New School–reveal that the development has received nearly $6 billion in the form of tax breaks and additional government assistance, twice the controversial $3 billion in incentives held out to Amazon to entice the retail tech giant to bring its second headquarters to Queens.
That’s a pretty big break
When completed, Related Companies‘ and Oxford Properties Group’s 50 Hudson Yards will be the city’s most expensive office building, coming in at $3.94 billion. To make starchitect Norman Foster‘s pricey vision a reality, the developers had filed an application with the New York City Industrial Development Agency to take advantage of financial incentives that were enacted in 2006 to encourage development in Hudson Yards. And according to a new report in Crain’s, the agency has approved $195 million in such tax breaks, which include making fixed payments towards the 985-foot tower’s development costs instead of paying property taxes that vary from year to year, as well as receiving a discount on the mortgage recording taxes.
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The city’s real estate industry isn’t too worried about a Donald Trump presidency. Real estate insiders feel that the man whose family’s fortune was made in the industry and padded by its favorable tax breaks, foreign investments and still-rising market will be unlikely to bite the hand that has fed it so well, Crains reports.
Loopholes safe; affordable housing not so much
“Section 581” by SITU Studio, Photograph by Patrick Mandeville
Billionaires get off nearly tax-free and billions go uncollected due to flaws in the way the city assesses property value. As part of a new exhibit at the Storefront for Art and Architecture in Soho, interdisciplinary architecture firm SITU Studio created visual representations of these inequities in one of their most glaring examples: the buildings along Central Park.
New York City’s property tax structure assigns higher real property taxes to renters than it does to the infamous absentee owners of the trophy condos on Billionaires’ Row, short-changing the city of millions in annual revenue, according to CityLab. The acrylic bands in the SITU models show the disparity between the taxed value of these properties and the sky-high amounts they’d actually sell for.
Find out how the state law is giving billionaires a free lunch
In a city where time is money, it’s hard to believe that for four years the city’s Finance Department was mistakenly giving away tax rebates reserved for residential condo and co-op owners to those that are corporate-owned, totaling more than $10 million between 2013 and 2016. The Post reports that the program gave out money to “indoor parking garages, gardens, cabanas and even storage spaces,” as well as “three office buildings and two retail shops,” according to a recent audit. More than 1,000 building owners were improperly awarded the tax abatements, accounting for up to 28.1 percent of their total annual tax bills.
How did it happen?
Work for a business with 20 or more employees? Soon you can kiss that $116/month Metrocard allotment goodbye. This week’s federal spending and tax-cut agreement will likely put into effect a permanent law that almost doubles the pre-tax earnings that New York mass-transit commuters can spend on fares, thereby saving them hundreds of dollars a year. As Crain’s reports, “The provision nearly doubles the maximum amount of pre-tax income they can use to pay transit fares. Currently $130 a month, the limit will be raised to match the amount that people who drive to work can spend in untaxed earnings on parking fees—$255 per month in 2016.” Plus, if Congress passes the bill as expected, the amount will continue to rise with the cost of living.
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Mayor de Blasio via @KevinCase via photopin cc; One57 © Wade Zimmerman courtesy of Agence Christian de Portzamparc (ACDP)
From the onset, Mayor de Blasio has been extremely vocal about his plan to add 200,000 units of affordable housing over 10 years, 80,000 of which will be new construction. Though many feel this is an arbitrary number, backed up by no data as to where the units will be, the Mayor seems committed to reforming current policies to reach his goal. And after months of speculation, he has revealed his planned changes to the city’s 421-a tax incentive program, which is set to expire in June.
According to the Times, under his proposal, the controversial tax would no longer apply to condo projects (to understand the logic behind this decision just look at the $100 million sale at One57 that received the tax abatement). But it would apply to new rental projects, which would have to have apartments for poor and working-class residents make up 20 to 30 percent of the building in order to qualify for city tax breaks. It would also extend the abatement from 25 years to 35 years. Another part of the overhaul is to eliminate so-called poor doors.
De Blasio also wants to up the city’s mansion tax. Currently, home sales over $1 million are subject to a 1 percent tax, but de Blasio proposes adding an additional 1 percent tax for sales over $1.75 million, as well as a third 1.5 percent tax for sales over $5 million. He estimates this will bring in an extra $200 million a year in tax revenue, money that would be allocated to affordable housing programs.
More details ahead
, Tue, September 30, 2014
New York is serious about going green and Governor Cuomo just signed into law a bill to extend—and double—the possible tax breaks given to those who install solar panels on their properties. A press release notes that the break will offer a rebate of 5 percent on either the solar panel installation cost; property taxes the year panels are installed; or $62,500—whichever is less. The new bill is meant to offset the 25 percent higher cost of installing solar systems in the city due to stringent regulations and the complexity of building sites.
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