421a Set to Expire June 15
6.7.2022 | Industry Insights
The five+ decades old 421a tax incentive expires on June 15, and the New York State Legislature ended its annual session on Saturday without extending or replacing this critical program. The end of this highly cherished property tax break could bring new development in the New York City multi-family housing market to a grinding halt.
This expiration could not come at a worse time as available affordable housing and skyrocketing rents are already a major concern in New York. Critics of 421a have long argued that the incentive encouraged luxury market construction at the expense of truly affordable housing, while developers counter that 421a allows for otherwise non-appealing multi-family projects to be financially feasible. Complicating matters are the considerations of various stakeholders, including labor unions, who have their own demands, and the fact that 421a is so closely tied to other complex issues such as property tax reform and mandatory inclusionary housing. Developers have been working to ensure that their existing projects will have foundation footings in place by June 15, a requirement to be grandfathered into the 421a program.
We will continue to monitor for developments. If you have questions, contact William Saya at 212.331.7588 | firstname.lastname@example.org or your Berdon advisor.