Wednesday, March 18, 2015

Developers sweating over possible loss of tax break

REBNY 421-A Building Analysis


From the Crains:

Nearly 5,500 affordable apartments in just nine projects would never have been planned if not for a four-decade-old tax break due to end in three months, according to a report by the Real Estate Board of New York.

The 421a abatement, which lowers property taxes on new apartments for up to 25 years, expires June 15. The REBNY report is intended to counter critics who say 421a mainly subsidizes luxury apartments and should be left to die. Developers are rushing to lay foundations for projects across the city before they lose the benefit, which is already going to 71,950 dwellings.

REBNY analyzed a sampling of nine large residential projects, including the Pacific Park (formerly Atlantic Yards) and Domino Sugar developments in Brooklyn and Astoria Cove in Queens, at various stages of development. The group determined that the tax break is responsible for 5,484 below-market-rate apartments and 13,801 market-rate units in those projects.

"The renewal of 421a is one critical element of the city's plan to address our housing shortage," said Steven Spinola, president of REBNY, in a statement. "Without 421a, our housing crisis will take an immediate turn for the worse."

The 40-year-old program, which forgave $1.1 billion in city property taxes in the year ending June 30, 2014, will likely be renewed but made less generous to builders. Even some supporters agree it needs to be revised to require projects in more of the city to include affordable housing in order to receive the tax break. Mayor Bill de Blasio has yet to reveal his position on 421a, although his aides have praised it for producing affordable apartments in affluent neighborhoods.

5 comments:

Anonymous said...

The 421a tax break is for the rich not the poor. I call it the A-Rod tax break. Millionaires like him get these large tax breaks while the middle class gets the shaft and pays more than their fair share.

JQ said...

Real in depth pdf Rebny.

It's crystal clear from the evaluations from their list of affordable luxury projects that this break has to be terminated. They are willfully oblivious to the ratio of income status that cannot even compete for these dwellings. And it omits the rates for the comparably small number of apartments.

They must not win. And the release of this flimsy report confirms their ignorance of the income inequality of the millions who live here and those out on the streets.

Anonymous said...

Bear in mind: REBNY, and Spinola, are more concerned with profit margins than anything else. If they could say 421-a maintains America and apple pie, they would... then take the tax breaks, build and sell to non-American purchasers, and make their bank deposits.

Anonymous said...

As they might say in Russia, "Toughskie shitskie"!

zee zeem said...

Why should I subsidize the rich to buy their new condominiums, and the poor to live in the same luxurious buildings, most which are in or close to manhattan, while I pay full taxes for my 70 year old coop, while at the same time commuting a distance to manhattan?

Also, can someone explain to me why the lead productive members of New York are given subsidized housing at the location closest to, or in Manhattan when they don't work there if they work at all?