From the Daily News:
New York's real estate developers want a stimulus package of their own.
Construction projects around town are stalled because of the real estate crash, as investors yank their money out of anything speculative. Plans languish on the drawing board, concrete pits are empty and hardhats are looking for work.
So the Real Estate Board of New York is talking to city and state leaders about jump-starting the market by reopening a once-lucrative tax break known as 421-a.
The old 421-a, launched in the bad old days of 1970s' New York when building new homes seemed insane, gave builders tax breaks for new construction - though developers in central Manhattan had to agree to subsidize affordable homes elsewhere. It stayed in place through boom and bust until affordable-housing advocates and taxpayer watchdogs finally pushed through reforms with a big nudge from Assembly Housing Chairman Vito Lopez (D-Brooklyn).
The new version requires developers to build affordable housing on-site and limits breaks to just a portion of the apartments' value - which is why developers rushed to lay down foundations before it took effect last July 1.
In the month before that date, builders applied for permits for 17,128 new apartments. The next month, they sought just 2,102.
As Gowanus Lounge warned back in 2007:
"The tax break both provides an unnecessary giveaway of taxpayer money to developers and affluent buyers, it can serve as a taxpayer-financed tool to promote displacement. Residents in some neighborhoods are, in effect, contributing their taxes to the buildings that will force them out and the affluent buyers who won't have to pay property taxes for years to come. "