NYC 421a Tax Abatement Law on Track to Sunset on June 15

For over 50 years, NYC’s property tax break has spurred investment in constructing new residential properties designated for affordable housing, however, with the legislative session having already ended, there is little to no hope that 421a will be extended. This law has provided developers with billions of dollars in tax subsidies as well as incentive to build more affordable housing, costing the city around $1.77 Billion annually. Some experts claim that it actually incentivizes growth and development, thereby adding more jobs, housing, and net taxes to the government. In fact, many of the units that were built had to be sold at below market rates, and by allowing the law to sunset, many developers will be more incentivized to build high-end apartments to make up for the increase in property taxes.

NY Governor Kathy Hochul has expressed interest in the past few months to pass an amended version of the bill, but it has since been voted down in the state legislature. Perhaps she will be more inclined to work on implementing a new property tax abatement bill in the future, but as of now, many land owners and developers will have to drastically change the way that they conduct business in the five boroughs.

Do you have any questions on how this might affect you or your business? Call us today at (718)-554-6445.