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Development Site Advisors® 485-x Cheat Sheet

The "Development Site Advisors® 485-x Cheat Sheet" provides a concise overview of the benefits and requirements under section 485-x of the real property tax law in New York City. It outlines different options for small, modest, large, and very large rental projects, as well as homeownership projects, specifying benefits, affordability criteria, filing fees, and commencement dates.

New 485-x Bill

The "New 485-x Bill" article highlights the introduction of section 485-x in the real property tax law, aiming to boost affordable housing in New York City through tax incentives. It outlines affordability options, construction requirements, and penalties for non-compliance. Additionally, it covers applicant registration, fees, enforcement powers, and reporting obligations. The initiative aims to encourage affordable housing development while ensuring adherence to regulations.

Rubin Report - The Pulse of the NYC Development / Issue No. 16 - April 2024

Welcome to issue Number 16 of The Rubin Report: The Pulse of the NYC Development Market! It’s official: Governor Hochul announced that they have reached a conceptual agreement with legislative leaders on the $237 Billion budget. The successor program to 421-a is here: 485-x!

Rubin Report - The Pulse of the NYC Development / Issue No. 15 - March 2024

Welcome to issue Number 15 of The Rubin Report: The Pulse of the NYC Development Market. Spring is upon us! I also want to point out the sheer strength of the land sales market. We are seeing land prices higher than ever before in certain markets.

What does it take to convert office buildings into housing?

For half a century, 160 Water St. in New York City’s Financial District was an office building. Today, from the outside, it still looks like one — a 30-story glass box on a street lined with them. But by the front door, there’s a sign now that says, “Pearl House: Now leasing studio, one and two bedroom residences.”

Rubin Report - The Pulse of the NYC Development / Issue No. 14 - February 2024

With an April 1st due date looming for the 2025 budget, the NYS senate will be busy debating housing, a tax abatement and “good cause” eviction. This topic is a very contentious one in the senate. If they again fail to pass a 421-a type tax abatement program, my belief is that Governor Hochul will do what she did with Gowanus (which worked) and sign an Executive Order in an effort to create housing. Keeping a close eye on this.

Rubin Report - The Pulse of the NYC Development / Issue No. 13 - January 2024

421-a will take center stage again this year after making no progress in 2023. It’s an election year, so all elected officials will be voting cautiously. While I am optimistic 421-a legislation will be passed this year, I do recognize their are significant challenges to overcome; some of the powers-that-be are requiring that a “Good Cause Eviction” bill be included as a requirement for any 421-a tax exemption to be passed.

Quality Housing Program and Height Factors in NYC Zoning

New York City, renowned for its pencil-like skyscrapers and architectural diversity, owes some of its unique skyline to two key Residential zoning regulations: The Quality Housing Program (QHP) and Height Factor Zoning (HF). These regulations not only play a pivotal role in maintaining the city’s neighborhood characteristics and promoting diversity in building designs but also in the feasibility of real estate development.

Replacement of 421-a: 485-X

This act shall take effect immediately; provided, however, that the department of housing preservation and development shall notify the legislative bill drafting commission upon the occurrence of the execution of the memorandum of understanding provided for in subdivision twenty-two of section 485-x of the real property tax law as added by section one of this act in order that the commission may maintain an accurate and timely effective data base of the official text of the laws of the state of New York in furtherance of effectuating the provisions of section 44 of the legislative law and section 70-b of the public officers law.

Development Checklist

Developing a property in New York City can be challenging due to the complexity and the need to do a thorough analysis of the site and its potential. There are many factors that can affect the feasibility, cost, and profitability of a property development project. Here are some of the most important ones to consider:

Zoning Analysis

In the world of real estate development, especially in NYC, zoning regulations are enforced by Department of Buildings (DOB) plays a pivotal role to ensure safe and lawful use of buildings and construction sites. Zoning determines how land can be used and zoning resolution contains NYC’s zoning regulations. These regulations determine specific building uses in designated areas and set criteria for aspects like height, floor area, setbacks and parking.

Affordable Aspirations: The Challenges and Promises of New York City's Mixed Income Market Initiative

NYC's MIMI initiative requires 70% of housing units to be affordable, but it poses financial challenges for developers in affluent areas, potentially hindering diverse neighborhood development. While aiming for socio-economic integration, concerns arise about unintentional economic segregation. Reassessment is needed, especially in high-value districts, to ensure effective implementation and overcome skepticism regarding economic barriers in the real estate market.

The Rubin Report - The Pulse of the NYC Development / Issue No. 12 - December 2023

The US inflation rate has dropped for the second consecutive month to 3.12%. This allowed the Fed to keep rates steady at 5.25% to 5.5% while also giving guidance on what they intend to do with rates moving forward, stating that if the economy evolves as projected, the appropriate level of the federal funds rate will be 4.6% at the end of 2024, 3.6% at the end of 2025, and 2.9% at the end of 2026.

The Rubin Report - The Pulse of the NYC Development / Issue No. 11 - November 2023

In this issue we will look at 4 development site transactions above the $10m price level; showing the resiliency of the land market in NYC. We also spotlight 7 Manhattan New Building permits, over the last 2 weeks which accounted for over one-million square feet of new construction with over 800 apartments and 512 hotel rooms.

The Rubin Report - The Pulse of the NYC Development / Issue No. 10 - October 2023

In this issue I will touch on 8 recent development site transactions, 50 recent new building filings over the last 30 days in Manhattan, Brooklyn, Queens & The Bronx. (3 were in Manhattan, 8 in Queens, 12 in The Bronx and 27 in Brooklyn), a financial markets summary discussing interest, mortgage and inflation rates, a summary of Mayor Adams’, “City of Yes” zoning change proposals, a construction costs outlook and an invitation to REBNY Development Committee’s 3rd event featuring renowned developer Sergey Rybak of Rybak Development on November 2. (You won’t want to miss that.)

The Rubin Report - The Pulse of the NYC Development / Issue No. 9 - September 2023

In this issue of The Rubin Report: The Pulse of the NYC Development Market, I will breakdown 8 recent exciting development site transactions, a rundown of 25 of the most recent new building filings and a financial markets snapshot.

The Rubin Report - The Pulse of the NYC Development / Issue No. 8 - August 2023

In this 8th issue of The Rubin Report: The Pulse of the NYC Development Market, I will update you on Gov. Hochul’s Executive Order on a 421-a replacement for the Gowanus neighborhood of Brooklyn; A look at current Construction Cost Trends; The Feds most recent meeting result on interest rates, a snapshot look at inflation over the year and a finance markets summary and more. I will also highlight a recent $16million land sale we just completed in Flushing, Queens.

The Rubin Report - The Pulse of the NYC Development / Issue No. 7 - July 2023

In this issue you will find our 1st Half 2023 Development Report, which I trust you will find valuable. I also highlight a land sale DSA just completed in Brooklyn and a summary with some photos from last month’s REBNY Development Committee event with developer Kenneth Horn, Esq. of Alchemy Properties. Included as well is information about our next new-hire training class in the Fall; if you know anyone looking to get into commercial real estate brokerage with a sole focus on development sites and air rights, please forward it to them to apply. The training is simply best-in-class in the industry.

The Rubin Report - The Pulse of the NYC Development / Issue No. 6 - June 2023

In this issue we will dive into interest rates & inflation, a financial markets summary, a snapshot of the 2023 development site market, an invitation to the 2nd REBNY Development Committee event (which I hope to see you at!) and a summary of The Bridge Gala’s event where they honored my friend and co-founder Lev Kimyagarov alongside Manhattan Borough President Mark Levine. You will also find a summary of a construction pipeline report, a foundation filing report as well as an update on construction costs.

The Rubin Report - The Pulse of the NYC Development / Issue No. 5 - May 2023

As the NYC commercial real estate market continues to navigate through the current cycle, brokers, owners, investors and developers should closely monitor the latest trends and data. In this issue I want to look at the commercial real estate sales market as it relates to Q1 2023 vs. last quarter Q4 2022. I think this is a good gauge on market trends.

The Rubin Report - The Pulse of the NYC Development / Issue No. 4 - April 2023

Welcome to the fourth issue of The Rubin Report: The Pulse of the NYC Development Market. Interest Rate uncertainty? Bank failures, No 421-a and a late NYS Budget. What is going on?

The Rubin Report - The Pulse of the NYC Development / Issue No. 3 - March 2023

Issue No. 3 is packed with current financial market & development news, a 2022 year end report, a construction outlook report. More importantly this issue will get you thinking and strategizing!

The Rubin Report - The Pulse of the NYC Development / Issue No. 2 - February 2023

In the issue we will dive into Gov. Hochul’s recent State of the State address as well as the 2024 Budget as it relates to Housing and Zoning. The New York Housing Compact, was announced which is a bold new statewide strategy to increase housing supply and combat exclusionary zoning. The goal of the Compact is to produce 800,000 new homes over the next decade, with the aim of addressing the housing crisis in New York State.

The Rubin Report - The Pulse of the NYC Development / Issue No. 1 - January 2023

In this first issue, we will delve into the 2022 land sale numbers, the current state of the NYC development market including market trends, zoning changes, and recent sales activity. We will also discuss the largest sales by borough and the current lending environment, as well as what to pay attention to this year

New York City Air Rights

Air rights in New York City, a concept that has shaped the city’s skyline, refer to the unoccupied airspace above a property, often termed as a building’s “unused potential”. These rights are a valuable asset due to the scarcity of land and high demand. Property owners can generate income, finance improvements, or preserve historic landmarks by transferring or selling this unused potential. This also benefits developers who can build taller and more profitable structures in desirable locations.

Developers Helping Developers: The Use of Rescue Capital in Today’s Economic Climate

Given today's current rate environment, many borrowers will be unable to fulfill their loan requirements. To survive, property owners have to come up with strategic ways to complete, recapitalize and operate their assets. While December 2022 showed its first signs that the Federal Reserve's decision to methodically increase interest rates is slowing down inflation, there is a long way to go until we see an easing policy environment.

Three New Ways To Think About Housing In The City

THE POLYFUNCTIONAL BUILDING For the most part today, multifamily housing is designed to contain almost only residences. When a mixed-use design is considered for multifamily housing, the commercial or community component is almost always confined to the ground level.

New York NPCL 511/511-a & Legal Considerations When Transferring Real Property Owned by Not-For-Profit Corporations and Religious Corporations

Not-for-profit corporations and religious corporations own a considerable amount of real property in New York City and are increasingly more active in real estate transactions. These real property transactions are likely subject to regulations which impose unique considerations.

Expanding Floor Area Ratio for Development Sites through Adverse Possession

Most developers know that the amount of FAR (Floor Area Ratio) on a potential lot is a determinative factor of the financial success of a project. As defined in the NYC Department of City Planning Glossary of Zoning Terms, “FAR is the ratio of total building floor area to the area of its zoning lot.” The size of your lot determines how much buildable floor area is permitted in your building by the building department.

Obtaining A Zoning Variance in New York City

When it comes to zoning, one size does not always fit all. The zoning districts of the city’s Zoning Resolution – within which regulations govern what and how much can be developed on a parcel of land – are often mapped broadly in the case of areawide rezonings, sometimes covering hundreds of blocks at a time.

Office-to-Residential Conversion

The office-to-residential conversion has become a hot real estate topic due to the changing economy and declining office demand resulting from the pandemic. The surplus supply of empty office buildings urges many property owners to opt for converting their buildings into residential spaces to take advantage of the ever-growing housing demand in the New York City.

The 2022 South Bronx Development Landscape

Last June the 421A program that assigned tax breaks in exchange for affordable units in new developments expired. A replacement program has not yet been created and has left many in limbo. This happened when the real estate industry in New York was gaining momentum after the worst days of COVID seemed to be behind us.

The Future of Special West Chelsea District

The Special West Chelsea District [WCH] was established to create a mixed-use community in the West 20’s between 10th and 11th Avenues, centered around the High Line Park, and embracing the arts and galleries that had already begun to proliferate in the area. The Northern limit at West 30th Street borders directly with the Hudson Yards Special District [HY], with which it starkly contrasts, and extends South to 17th Street, then follows the High Line to the East side of 10th Avenue, ending at 15th Street.

The 2020 Updates of the SoHo/NoHo Rezoning Plan

SoHo was once the artists’ enclave, a haven of opportunity and affordability for the struggling artists of the 60s. Since the widespread migration to this iconic neighborhood, it had transformed into a global hub for luxury retail and high-end fashion. For the first time in 50 years, the City of New York drafted a SoHo/NoHo rezoning plan to update the area’s antiquated zoning laws, allowing low-income New Yorkers a chance to prosper from what Soho/Noho has to offer once more.

The Special Clinton District and Affordable Housing

The Special Clinton District was added to the zoning resolution in 1974, among the primary purposes was to preserve the existing low-rise residential character of the district, while incentivizing development, but in keeping with the character of the neighborhood.

A Focus on NorthWest Queens: Recent land sales for 2021

Find the highlighted details of ten recent development site transactions in Astoria and Long Island City, Queens, valued at $1 million and above.

The Astoria Development Market

Astoria has had a very busy year in real estate. While there was concern regarding the direction the market would take, there has been a lot of action in development sites trading. The expiration of the 421a tax abatement and rising interest rates were a curveball but did not deter developers from acquiring and building. As of October 2022, 75 new building permits have been filed and 28 have been approved. Developers are eager to get their projects off the ground and it is evident by the numbers.

DSA Company Report On 421a

As you may or may not know, the current 421-a tax exemption, also known as Affordable New York, is set to sunset on June 15, 2022. 421-a has long been a useful tool to encourage development due to its generous property tax exemption. This exemption had an impact on the property’s value and our research will explain its effects.

The West Remains Wild

The West Side of Manhattan has not seen much in the way of stalled projects due to Covid 19’s impact and associated business interruptions and shutdowns. Many projects were planned, permitted, and funded by late 2019, or were already under construction when quarantine started. Concerns about delivery timelines and sellout prices meeting pro-formas are an ongoing concern.

The Two Bridges Project Explained

Bounded by South St to the south, Brooklyn Bridge to the west, East Broadway to the north, and Montgomery Street to the east, we enter Two Bridges. This waterfront enclave, a majority of it in an R7-2 zone, is home to a community that is predominantly in the low- and moderate-income bracket.

The New Towers of Lower Manhattan

New York City’s iconic skyline is changing year by year as top developers fight to be a part of the cityscape. Today we will dive into the new towers of Lower Manhattan that have yet to be built but will eventually hold their place in NYC’s skyline history.

Hudson Yards: The Catalyst for the Midtown East Rezoning

The Midtown East Rezoning, approved August of 2017, is a rare opportunity for the Plaza District to modernize and rebuild its aging buildings. There is however a substantial cost to rebuilding active product, and I would argue that Hudson Yards is a catalytic steppingstone in helping Midtown East reach its full potential.

Climbing to New Heights in Midtown East

The Eastside of Manhattan is many things, but underdeveloped it is not. It’s an eclectic mix of midrise blocks and towering structures that make you believe dreams do come true, and a strong pulse of constant change, both in the people and the landscape of the buildings.

The Queens Development Market

In the development site asset class sector, 2015 was a record year for Queens with many firsts. It was the first time Queens hit 102 transactions (a 21.42% increase from 2014), a total dollar volume of $1.1billion (a 40.66% increase from 2014) and a $10.6M average sales price, the first time it reached double digits. (a 13.97% increase from 2014). 2015 was also the year with the largest amount of proposed new dwelling units at 13,014 units. Five years later, and where are we in this asset class?

The East New York Rezoning

In 2016, the de Blasio administration targeted 10 to 15 neighborhoods to rezone in NYCs greater metro area. Among them, East New York’s plan was the most prominent, with $267 million in planned capital investment for schools, parks and infrastructure. The goal of the East New York rezoning is to spur neighborhood development and revitalize underserved areas; focusing its redevelopment efforts towards the creation and preservation of affordable housing for its economically disadvantaged communities. The East New York rezoning was a much-needed opportunity for the neighborhood’s growth and prosperity.

Red Hooked

Red Hook continues to be a beacon of value in the Downtown Brooklyn area. The neighborhood is surrounded by water on three sides and by the Gowanus Parkway as well as the Battery Tunnel on the fourth. Nearby neighborhoods include Columbia Street Waterfront District, Carroll Gardens, Gowanus and Sunset Park. Some compare it to Battery Park or even Hudson Yards.

The Northern Brooklyn Development Market

Despite the global pandemic effects on the NYC real estate market, the development fundamentals thus far in 2020 in Northern Brooklyn has proven to be a glimmer of hope for this city. The neighborhoods of Greenpoint, Williamsburg, Bedford Stuyvesant, and Bushwick have shown that there is still very strong demand from both NYC residents and developers to be in those neighborhoods.

White Paper - Inclusionary Air Rights

VIH, or Voluntary Inclusionary Housing, states that a development may receive a density bonus by providing affordable housing in the form of new construction, substantial rehabilitation, or preservation. Inclusionary air rights generated from the bonus can also be transacted and sold to developers. This mechanism benefits both parties as the proceeds from the sale of development rights can be used to pay for the renovation to ensure a long-term preservation of affordable housing while the air rights bought by developers can be used to unlock density bonus.

Queens, NY Development News

In this article, I will summarize some recent developer New Building filing activity in the Borough from optimistic developers, from October 2020 to December 2020. 10

A Bronx Game Changer - MTA’s Penn Station Access Project

Although first contemplated in the 1970’s, the Bronx will finally benefit from a major public transportation project. The Penn Station Access Project is anticipated to be completed in 2024. This Project will improve the lives of thousands of Bronx residents, by providing new transit alternatives, shorter commute times, job opportunities, economic growth, quality of life and environmental benefits. It is further anticipated that Bronx property owners and developers will benefit from these major changes.

Opportune Developments: The Marriage of Rezoning and Opportunity Zones in Inwood

Upper Manhattan’s northern most point now finds itself on the verge of big changes. Inwood has been rezoned, now joining the ranks of East Harlem, Jerome Avenue in the Bronx, East New York, and the Downtown Far Rockaway Special District in Queens. The rezoning has headlined publications during its lifespan in the Uniform Land Review Process (ULURP) and even before when community discussions first began in 2015.

The Northern Bronx Development Market

Although the pandemic seriously affected the lives of so many Bronx residents, including their financial livelihood, New York City’s affordable housing policy initiatives are in place to handle the challenges that lie ahead for area residents.

A Fresh Look at FRESH (as published by the Commercial Observer)

The Food Retail Expansion to Support Health (FRESH) Program was implemented in 2009 as a zoning program through the Department of City Planning (DCP) and a tax incentive program through the New York City Economic Development Corporation (NYCEDC) to address the disparity of access to quality food in large swaths of the city.

What To Know About NYC Mandatory Inclusionary Housing

With the recent rezonings in Gowanus and SoHo, there is a renewed focus on New York City’s Inclusionary Housing Program, and Mandatory Inclusionary Housing (MIH) is of particular interest to developers seeking to develop in these newly rezoned neighborhoods.

Year-End Neighborhood Focused PlatformTM- Letter from the founders

It has been a very interesting year! During the shutdown, Development Site Advisors® grew the company by 100%, hiring 7 new brokers in addition to more back-office support (and we are now recruiting for our 2nd broker class on Q12021).

Hotel To Residential Conversion

The global COVID-19 pandemic has undeniably transformed the way people live and work. The sudden drastic decline in airplane passenger traffic in relation to tourism and businesses has slammed NYC’s hospitality sector these past years.

Inwood – “The Best-Kept Secret of Manhattan”

The best-kept secret in Manhattan, Inwood, has a profound significance to the island’s founding. The setting was Inwood Hill Park where the Dutch struck a deal with the Lenape tribe to buy the island of Manhattan for 60 Dutch Guilders, roughly $24 dollars in today’s monetary value, in May 1626.

Lights, Camera, Action: A Bright Future for Sunset Park

The current development project in Bush Terminal positions Sunset Park as a hub of creativity for all, while committing to providing more opportunities for its diverse population. Simultaneously, the controversial rezoning and expansion plans for Industry City, which garnered an 11-1 vote, showed overwhelming support from the City Planning Commission and is now in the final stages of approval, promising to bring thousands of jobs, while increasing economic activity to the immediate area. With these recent developments, Sunset Park stands out as a visionary place, and is brimming with opportunity for a very bright future.

125th Street Renaissance

Harlem has been gearing up for a new renaissance for a while now. The new developments being planned and/ or completed in and around 125th Street, exemplify that. Many of these new developments are residentialcentric but, there are also plans to build a 441,000 square foot brand new, Class A office building in East Harlem (developed by Extell Development) called HHQ as well as, the first new hotel in Harlem in 85 years with the redevelopment of Victoria Theater.

Development Ground Leases and Joint Ventures – A Primer for Owners

If you own real estate in an up-and-coming area or own property that could be redeveloped into a “higher and better use”, then you’ve come to the right place!  This article will help you summarize and hopefully demystify these two methods of improving a piece of real estate while participating handsomely in the upside.

An Overview Of Rezonings In New York City

The Zoning Resolution of the City of New York (the “ZR”), which includes hundreds of pages of text and zoning maps governing what uses and bulk are permitted on every block in the City, was formally adopted on December 15, 1960 – over 60 years ago. In a city characterized by constant, dynamic growth, the ZR was practically outdated almost from the moment of its inception.

Founders Letter Fall 2022

Friends, We are so pleased to present you with our Fall 2022 Development Whitepaper: The Neighborhood Focused Platform® (NFP) Experts Issue. In this issue we will hear from our Neighborhood Focused Area experts on development within their respective territories along with a special report from our in-house architect team.

Live here, play here - Revitalizing Coney Island

It takes a vision and tremendous resources to create the momentum for the Coney Island development landscape.

Completion Guarantees In Ground Leases: What Are They Good For?

There is no shortage of discussion among lawyers about the utility of completion guarantees. In a typical development ground lease, the landlord selects a developer to construct new or substantially refurbish property and then operate that property for the production of income.

The Architect’s Take: Sliver Law NYC

Sliver law affects dense residential districts including R7-2, R7D, R7X, R8, R9 and R10 according to ZR 23-692. In those residential districts, portions of buildings with street walls less than 45 feet in width shall not be permitted above certain heights depending on the width of the street.

What Lies Below

Most owners and developers that have developed sites in New York City realize the importance of understanding the potential impact of subsurface conditions on the site potentials.

Transferring Development Rights by Zoning Lot Merger

The most successful marriages are combinations that benefit both individuals. So it goes in a zoning lot merger, which is like a marriage between New York City properties. In a zoning lot merger, owners combine adjacent lots into a shared zoning lot, and pool together their development rights.

Zoning for Accessibility

A major amendment to the NYC Zoning Resolution is being proposed that would have far-reaching impact on timing and cost of construction for most developers whose properties are close to a subway or rail station.

Gowanus Rezoning Update

There seems to be light at the end of the tunnel for a new Brooklyn project, the Gowanus Rezoning Plan. This venture is the city’s effort to revitalize the mainly-industrial neighborhood of Gowanus by adding more affordable housing, along with modern new developments. Several City Council Members, as well as Mayor Bill de Blasio, are pushing for the project as they hope to certify the rezoning plan by January.

Forever Resilient Brooklyn

One might assume that an expansive metropolis like New York City would buckle under the pressure of a global pandemic. But the resiliency of New Yorkers is mirrored in the strength of the development community. The future of the development sector and the real estate industry as a whole, is bright and thriving.

The Northern Manhattan Development Landscape

Northern Manhattan has seen a modest amount of development and redevelopment site transactions in the past 12 months. This is a breath of fresh air in NYC where seemingly everything was put on hold in. Northern Manhattan was especially quiet in the first half of 2020. Since then, we have seen some life again with significant transactions that demonstrate where development is going in Upper Manhattan. There are more charter schools, spec office assemblages and storage development being proposed for the area as opposed to residential buildings, according to sales data since September 2020.

Neighborhood Focused PlatformTM- Letter from the founders

In our first whitepaper, our Neighborhood Focused Platform™ brokers shine and demonstrate their expertise. If you are a developer, use this paper to help decide where your next project should be. If you are an owner in one of these areas, get smart on the current events of your neighborhood; knowledge is power. We hope the entire marketplace uses this valuable whitepaper as a go-to resource.

Founders Letter for Development Whitepaper 2021 Summer- Experts Edition

Wow. What an amazing whitepaper we have for you in this issue. We have compiled some of the brightest minds in the development space and asked for their take on specific topics relating to this sector; the result is an invaluable whitepaper that will serve as a tremendous resource for owners, developers, brokers, architects, and anyone in the development site sector.

Founders Letter Fall 2021

On March 13, 2020, President Trump announced a National Emergency due to COVID-19. On March 28, 2020 Governor Cuomo halted all nonessential construction sites in NYS. On the business front, retail establishments were closing, offices were closing their doors with non-essential workers ordered to stay home. It was a time of great uncertainty and tragedies.

Securing 421-a(16) Tax Exemption Eligibility

As a part of the proposed 2023 FY budget, New York State Governor Kathy Hochul released the details about the new program called Affordable Neighborhoods for New Yorkers (“ANNY”). The program is proposed to replace the existing 421-a(16) Tax Exemption that is approaching a sunset date on June 15, 2022. Although the deadline is only a few months away there is still time for new projects to secure eligibility for the program.

A New Landscape For Gowanus

One might assume that an expansive metropolis like New York City would buckle under the pressure of a global pandemic. But the resiliency of New Yorkers is mirrored in the strength of the development community. Despite all the challenges, and there are many of them, New York came back very strong.

What Lies Below, Part 2: City Infrastructure

Most owners and developers that have developed sites in New York City realize the importance of understanding potential impacts of adjacent buildings, other structures and city infrastructure on their developments plans. These impacts may have significant influence on what can be reasonably designed and constructed on any site.

Founders Letter Spring 2022

In this invaluable and crucial issue of our Development Whitepaper, you will read and learn about the complexities of Completion guarantees on Ground-leases, potential construction impacts of adjacent buildings and city infrastructure, Hotel to Residential conversions, a detailed look at Mandatory Inclusionary Housing in NYC, and how to secure the 421-a abatement for your project before the mid-June 2022 deadline.

421-a: Past, Present and Future

New York City’s highly sought-after tax exemption program for new multi-family developments called 421-a has expired as of June 15, 2022. Developers needed to set aside 25-30% of their market rate units as affordable to qualify for the “up to 100% tax exemptions for 25 years”. The programs’ goal was to increase affordable housing across the 5 boroughs. Low-income workers could benefit as a lot of 421-a developments are in more affluent communities. According to city data, 421-a costs the city more than $1billion yearly to maintain the program and about 90% of new residential construction has received 421-a or other tax breaks in the last decade. Developers who completed the project’s foundation before the deadline and finish construction before June 15, 2026, may still qualify for the tax break. Tax breaks like 421-a is important to developers because real estate tax for multi-family buildings can make up to 25 to 30% of gross revenue – much higher than most apartments in the country. As such, this becomes a popular solution which makes new construction and operating it financially feasible.

The Upper Manhattan Development Landscape

The need for affordable housing has never been greater. Which begs the question, why would New York State, and by extension New York City, let the 421a tax abatement lapse?