Expired tax break will lead to more condos, fewer rentals: City official - Metro US

Expired tax break will lead to more condos, fewer rentals: City official

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Carl Weisbrod, head of the City Planning Commission, said Tuesday the recent lapse of a statewide tax break for developers offering affordable units in new buildings will lead to more luxury condos instead of rental units.

The 421a tax break, which expired earlier this year, lapsed because the real estate industry and unions did not agree on a deal regarding wages, the New York Daily News reported.

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“We really need more rental housing in the city,” Weisbrod told the Daily News. “We are likely to see more condominium development than rental development, and that’s not desirable.”

Developers stated that Mayor Bill de Blasio’s recent zoning overhaul meant to provide affordable housing in rezoned areas, approved by the City Council last week, may have little impact without the 421a tax break, the Daily News added.

“New York is a city of renters, and one that continues to grow,” John Banks, president of the Real Estate Board of New York, said in a Real Deal article when the tax break expired. “Without a program like 421a, one can’t build multifamily rental housing with a significant below-market, or affordable, component on a scale necessary to address the city’s needs.”

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The 421a extension was approved by the state legislature in June 2015, but it came with a provision requiring an agreement over developers’ use of union contractors, according to the Real Deal. This issue was the sticking point that led to the tax break’s expiration.

“We can’t risk losing out due to the fact that Albany is not acting,” Councilman David Greenfield, chair of the land use committee, was quoted by the Daily News. “For reasons beyond my pay grade, the good folks in Albany haven’t been able to come up with a solution.”

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