NYC Developers Try to Beat Tax-Break Deadline
Digested from “Tax-Break Law Spurs Permitting for New York Apartments”
Axiometrics (8/5/15) Ehmann, Chuck
Multifamily permits in New York City skyrocketed 125.2 percent in June 2015 over the previous 12 months as developers tried to get approval before the city’s 421-a Property Tax Exemption Program concluded. The program came up for renewal at the end of June, causing a spike in permits from April to June. Similar activity occurred when the program was last up for renewal in June 2008.
The New York legislature voted June 25 — five days before the program was scheduled to end — to extend the program for four years. The renewal includes additional updates, such as extending the maximum tax break period from 25 years to 30 years and requiring an affordable-housing component to properties using the program.
However, the continuation of the program is contingent upon agreement of the wage provision between construction unions and the Real Estate Board of New York. Developers concerned about the state of the program are hedging their bets with condos instead of apartment homes.