About a dozen real-estate developers are trying to get projects underway before changes to a housing program take effect in December, costing them millions of dollars in tax breaks for new apartment buildings.
The Real Estate Board of New York recently sent a letter to the city Department of Housing Preservation and Development asking for clarification on how far along in construction the projects would have to be to qualify under the current, more generous rules governing the 421-a tax abatement program.
The letter said that the projects, slated for various places around New York City, required approvals from various city agencies before going ahead, which might delay their groundbreakings.
“The projects may be waiting for discretionary approval that is not even in the hands or the control of the developer,” said REBNY president Steven Spinola. “We aren’t complaining about it, but when you get so many applications all at the same time, there are doubtlessly going to be delays.”’
Ross Moskowitz, a real-estate lawyer at Stroock & Stroock & Lavan, said that the crunch will only get worse as the year wears on.
“Projects may also get caught up in government review as the number of applications and filings increase exponentially to meet the deadline,” he said.
The projects are also the focus of REBNY lobbying efforts in Albany to somehow extend provisions of the existing program. Last December, the City Council made the 421-a program much more rigorous, requiring that builders in lower Manhattan, parts of Harlem, brownstone Brooklyn and along the Queens waterfront would receive tax abatements only if they devoted at least one-fifth of their units to low-income housing. Previously, affordable housing was a requirement to qualify for tax breaks only for new buildings between, roughly, Houston and 96th streets in Manhattan.
Affordable-housing advocates made great strides in reforming the program, named after the number of its section in the state’s real-estate law, by arguing that it was a way of subsidizing gentrification, since it previously applied to even million-dollar condos in East Harlem.
They are likely to gain more ground in Albany, however, which must approve the city’s legislation and renew the program. That is because the State Assembly Housing Committee is headed by Vito Lopez, a Democrat from Bushwick whose district is threatened by gentrification on its western borders, and who has made affordable housing his signature issue.
Follow Matthew Schuerman via RSS.