The construction pipeline is getting narrower.
There were 351 new building filings in New York City in the third quarter, down 17 percent from the second quarter and 28 percent year-over-year, according to a report from the Real Estate Board of New York.
The drop is in part because the 421a property tax break for multifamily development in the city expired June 15, which triggered a rush of filings. The 689 in the first quarter were the most in a quarter since 2014, which, not coincidentally, was just before the previous version of 421a expired.
A drought followed the 2014 surge, and now history is repeating itself. Developers have all but stopped trying to put together investors to pursue rental projects that cannot get the 35-year property tax break. Condo projects were largely excluded from the most recent iteration of 421a.
Rising interest rates have also contributed to the decline, as financing projects of all kinds became more challenging for developers.
But the impact of 421a’s expiration is clear when comparing the slowdown in filings for rental projects to the overall drop in new-building filings. The quarter-over-quarter falloff in rental filings was 62 percent, nearly four times the quarterly decline overall. Only 78 rental projects were filed in the quarter, half as many as in the same period last year.
Those 78 projects are proposed to have 3,346 units, down 46 percent year-over-year and the smallest quarterly number in a decade — since the slump that followed the 2008 financial crisis.
Rental projects in much of the city became dependent on 421a over several decades. Progressives let the tax break lapse, believing it forgave too much property tax for too little affordability. Some predict it will be several years before it is replaced, although an abatement still exists for co-ops and condos.
17 comments:
It's not stingy developers. It's moronic politicians.
Kinda like nearly expired stale bread at the market.
Listen to Me said...
Somehow I can’t get too perturbed at seeing Bolshevik-run urban centers reaping the whirlwind.
You mean, no more "Build Baby Build!" ?
I blame the communists.
One would have to be crazy to build apartments with all the eviction protection and rent reforms coming down the pike.
That or make a building 100% section 8 to you get insure get your rent due.
The city is hostile to private landlords, especially when they don't want garbage, boozers, nutters, drug addicts or criminals living under the same roof.
Who the hell is the city to demand its my duty to take in the typical pregnant single mom of 6 who hasn't worked a day in her life.
Its not my fault she spread her legs for numerous no good losers repeating the same mistake countless times, learning NOTHING in the process.
..then blames her hardship on poverty, not enough taxpayer backed handouts and greedy landlords!!
I should be arrested, forfeit a building and fined because I don't want this shit and the trouble & baggage its guaranteed to comes with in my home? This wile also saying its my duty to protect my good tenants?
Such co-existing of the same walls, hallways, roof and stairs is outright impossible.
WTF is this this state becoming, the Soviet Union?
Is Voting Blue No Matter Who caused by Mass Formation Psychosis ?
Bill Clinton signed welfare reform in 1996 “End welfare as we know it” and today it is all too apparent that it did not succeeded.
But this is part of the plan to drive down property with rent control so the developers can buy it up, then rebuild just in time for another Giuliani and sell high what they bough low. The cycle has been going on every generation for over a century.
Great news
They must work for the Biden Administration.
Like George Costanza pitching the Jerry show to NBC:
"So you held out, for less money" LOL...
What happened to Brandon's "Build Back Better"?
@"I blame the communists" I blame your teachers...
Donald Trump ate 2 scoops of ice cream.
I feel bad for the slumlords and corporate landlords.
I blame the communists for brainwashing the sheeple !
All Adams wants is another bailout from Joey.
Amazing how these so called capitalist landlords love socialiast taxpayer money.
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