tax abatements program

buyerbuyer, there is some talk that resurrecting the 421a program is going to be a negotiating tactic in albany this summer when the rent stabilization laws are slated to expire.

developers who had their foundations in place by a certain date were given an extension for their 421a construction deadline, but i seem to recall that it had some sort of lot safety/maintenance provision and i'm not certain how many of the stalled lots will have 421a status if the projects come back to life.

fwiw, i've seen reporting on a rather remarkable amount of construction recently, which may at least partly reflect builders' desire to keep their 421a status, but i'm not sure if that's the impetus or not.

So it sounds like, absent some change in Albany that renews the program, and subject to any project somehow grandfathered in already, that the program has expired.

I wonder how that works for the multi-builidng projects in Wmburg. Eg, NSP3 (a few years off). I was told that for approval of the Domino project that they will have to build a large amount of low-income rental housing that will need to be done prior to or simultaneous with the main project -- I wonder if that is a 421A related issue, or also relates to other approvals.

By the way, right now in Williamsburg 58 Met and 80 Met are side by side, quite similar projects from the same developer, with , respectively 15 and 25 year abatements.

btw, i think 421a still exists for new projects, but the difference is that now the low-income aspect of it has to be in the development itself, the certificates can't be sold to developers elsewhere. so something like Domino could have a 421a element.

the term of the 421a abatement reflects how many certificates (for want of a better, more technical term, but you get the picture) a developer bought. those are given to developers of low or middle-income housing, and they in turn sold them to developers of market-rate properties. there are other programs, such as the j-51 program, which also may have different terms. it's amazing how hard it is to get info on these programs, many brokers have only worked with one of the scenarios available.

"there is some talk that resurrecting the 421a program"

Oh Lord I hope not. As Noah at UD has done an excellent job pointing out, buyers do NOT benefit from the 421. Only devleopers do.

http://www.observer.com/2011/real-estate/cuomos-rent-check-battle-big-real-estate-brewing?utm_medium=partial-text&utm_campaign=real-estate

Technically, the “new” 421-a program expired on Dec 29, 2010, but it will be resurrected retroactively once Albany quits fucking around.

The “new” 421-a program is different from the “old” program in place for buildings commenced before July 1, 2008. Under the new program, all of Manhattan and huge swaths of the boroughs require the construction of affordable housing on-site or the purchase of negotiable certificates to be eligible. Under the old program, affordable housing requirements were in place only for “prime” Manhattan.

New certificates can’t be generated by constructing affordable housing off-site anymore, but certificates generated by affordable housing construction in the past can still be used, and there are a bunch floating around.

Some projects got a 25-year exemption because they were located in districts designated as NPP or REMIC, basically mortgage insurance programs designed a loooong time ago to combat redlining and inner-city decay. Those designations stopped being relevant ages ago, but they remained operative for determining whether a project got 25-year or 15-year 421-a until 2008.

New projects in the boroughs that include affordable housing on-site can still get the 25-year benefit, but that’s it.