Welcome to Issue Number 31 of The Rubin Report: The Pulse of the NYC Development Market. This is where to come every month to learn about everything development, zoning & policy across the 5 boroughs.

In this issue

• We just sold a stalled commercial development site on the border of Sunnyside and Long Island City for $10,000,000 in an all-cash transaction
• The Trump Administrations One Big Beautiful Bill was passed. How does this impact real estate and development in NYC?
• The New York City Charter Revision Commission just laid out its proposal to make developing in NYC easier. These proposals will be on the ballot box this November. We will look at what is being proposed.

Just Sold: A 22,500 SF Corner Lot, Commercial Development Site on the border of Sunnyside & Long Island City | $10M

Address: 38-01 Queens Blvd, Sunnyside NY 11101

Neighborhood: Sunnyside/LIC

Location: Corner of 38th Street & Queens Blvd

Lot Dimensions: 100’ x 225’

Lot SF: 22,500 SF

Zoning District: M1-4/IBZ

Commercial ZFA: 2.00

Facility FAR: 6.50

Commercial ZFA: 45,000 ZFA

Facility ZFA: 146,250 ZFA

Sale Price: $10,000,000

Sale Date: 7/10/2025

Price Per ZFA: $444/Lot SF | $222/Base ZFA | $68/ Facility ZFA

Note: Development Site Advisors was the sole broker in this transaction representing the seller and identifying the buyer within 20 days of being hired. Closed in a true all-cash transaction.

How the One Big Beautiful Bill Act Supercharges NYC Development Opportunities

The One Big Beautiful Bill Act, signed into law on July 4, 2025, is a transformative opportunity for New York City’s commercial real estate owners and developers. This landmark legislation, building on the Tax Cuts and Jobs Act of 2017, delivers a powerful package of tax incentives and reforms to fuel investment, streamline development, and maximize returns in NYC’s dynamic real estate market. From enhanced deductions to expanded housing credits, the bill creates a fertile environment for growth and profitability.

Below, we dive into the key provisions: 100% deductions, SALT, Low-Income Housing Tax Credits (LIHTC), Opportunity Zones, Capital Gains tax rates, and individual and business tax rates, and explore how they empower NYC’s real estate community to capitalize on new opportunities.

1. 100% Bonus Depreciation: Accelerating Returns on Capital Investments

The reinstatement of 100% bonus depreciation under Section 168(k) is a major boon for NYC developers and property owners. Effective for qualified property placed in service after January 19, 2025, this provision allows immediate expensing of the full cost of tangible personal property (with a recovery period of 20 years or less) and certain qualified improvement property for real estate. Additionally, the bill introduces a 100% depreciation allowance for “qualified production property,” including nonresidential real estate used in manufacturing, production, or refining, if construction begins after January 19, 2025, and before January 1, 2029.

• Impact for NYC: Developers undertaking office-to-residential conversions or commercial projects, such as modernizing office towers in Manhattan or building last-mile warehouses in Brooklyn, can immediately deduct equipment and improvement costs, boosting cash flow. Property owners upgrading commercial spaces, think elevators, HVAC systems, or tenant fit-outs, can write off these expenses in year one, freeing up capital for further investments. In NYC’s high-cost market, where capital constraints often delay projects, this deduction accelerates development timelines and enhances ROI. For example, a developer retrofitting a Midtown office building could deduct millions in improvement costs upfront, significantly reducing taxable income and fueling reinvestment.

2. SALT Deduction Cap Increase: Relief for High-Tax NYC

The bill temporarily raises the state and local tax (SALT) deduction cap from $10,000 to $40,000, offering significant relief in high-tax New York. The cap phases down for taxpayers with modified adjusted gross income (MAGI) above $500,000, but pass-through entity tax workarounds remain intact, allowing businesses to deduct state taxes at the entity level without the cap.

• Impact for NYC: Commercial property owners with portfolios in high-value areas like Manhattan, LIC & Downtown Brooklyn benefit from reduced federal tax liability on substantial property and state income taxes. For instance, a landlord with a $50,000 annual property tax bill can now deduct up to $40,000 federally, compared to just $10,000 previously, saving thousands in taxes. Developers operating as pass-through entities (e.g., LLCs or S-corporations) can leverage PTET to bypass the cap entirely, deducting full state tax payments at the entity level. In NYC, where state and local taxes can erode profits, this provision, combined with the preserved PTET workaround, provides critical financial flexibility, enabling owners and developers to retain more capital for acquisitions or projects.

3. Low-Income Housing Tax Credits (LIHTC): Fueling Affordable Housing Development

The bill permanently expands the LIHTC program, increasing 9% credit allocations by 12% and lowering the bond test for 4% credits to 25%, making it easier to finance affordable housing projects in bond-constrained states like New York. This could facilitate 73,000 additional housing units statewide over the next decade, with NYC poised to capture a significant share.

• Impact for NYC: Developers gain a golden opportunity to build affordable and mixed-income housing in high-demand neighborhoods. The reduced bond test lowers financing barriers, enabling more projects to qualify for 4% credits, which are vital for rehabilitating existing properties or developing new multifamily units. Property owners with underutilized lots, especially those held for decades, can partner with developers to leverage LIHTC, transforming vacant parcels into revenue-generating assets. For example, a lot in East New York could be developed into a mixed-income project, boosting local housing supply and property values while addressing NYC’s critical housing shortage. This aligns with the city’s broader push to increase housing stock, making LIHTC a catalyst for profitable, community-focused development.

4. Opportunity Zones: A Permanent Boost for Distressed Neighborhoods

The bill makes the Opportunity Zone (OZ) program permanent, extending it beyond its 2026 expiration and introducing a second round of designations for 2027–2033. It offers enhanced benefits, including temporary capital gains tax deferral, a basis step-up (30% for rural investments, 10% for others), and exclusion of new gains for investments held over 10 years.

• Impact for NYC: NYC’s Opportunity Zones, spanning areas like the South Bronx, East New York, and parts of Queens, are set for a surge in investment. Developers can defer capital gains taxes by reinvesting proceeds into OZ projects, such as multifamily developments or commercial rehabs, while benefiting from basis step-ups that reduce future tax liabilities. Property owners with long-held assets in these zones can expect rising land values as developers seek sites for tax-advantaged projects. The program’s permanence provides long-term certainty, encouraging transformative projects that deliver strong returns while revitalizing underinvested neighborhoods.

5. Capital Gains Tax Rates: Stability for Real Estate Profits

The bill maintains the current long-term capital gains tax rates (up to 20% for assets held over one year), ensuring no increase from TCJA levels. Brackets are adjusted for inflation, providing predictability for real estate transactions.

• Impact for NYC: Property owners selling commercial assets, whether office buildings in Midtown or development sites in Brooklyn, benefit from stable capital gains rates, maximizing after-tax returns on sales. Developers selling completed projects gain certainty in a market where high borrowing costs have slowed transactions. Combined with OZ incentives, these rates encourage strategic sales or reinvestments. For example, selling a long-held property could yield significant gains, which can be reinvested into OZ projects to defer taxes, creating a cycle of wealth-building. This stability is a lifeline for NYC’s real estate market, ensuring owners and developers can plan with confidence.

6. Individual and Business Tax Rates: Long-Term Savings for Owners and Developers

The bill permanently extends the TCJA’s individual income tax rates (top rate of 37%) and standard deductions ($15,750 for single filers, $31,500 for joint filers). For businesses, the Section 199A Qualified Business Income (QBI) deduction remains at 20% for pass-through entities, with an expanded phase-in range ($75,000 for single filers, $150,000 for joint) to benefit more taxpayers. The corporate tax rate stays at 21%, and immediate expensing for domestic R&D costs is restored, applicable to real estate firms investing in innovative design or construction technologies.

• Impact for NYC: Individual property owners benefit from the permanent 37% top rate and higher standard deduction, reducing personal tax burdens and freeing up capital for reinvestment. The QBI deduction is a major advantage for developers and owners operating as pass-through entities, allowing a 20% deduction on rental income or development profits. For example, a developer earning $1 million in qualified business income could deduct $200,000, significantly lowering their tax liability in NYC’s high-margin market. The R&D expensing provision supports firms exploring sustainable building technologies or adaptive reuse, aligning with NYC’s push for carbon neutrality. These tax savings enhance financial flexibility, enabling owners and developers to pursue larger projects or navigate market challenges.

Strategic Opportunities for NYC’s Real Estate Market

The One Big Beautiful Bill Act positions NYC’s commercial real estate sector for unprecedented growth. Developers can leverage 100% bonus depreciation and LIHTC to accelerate affordable housing and commercial projects, particularly in high-demand neighborhoods. Property owners with assets in Opportunity Zones or underutilized parcels can capitalize on rising demand by selling to developers or partnering on tax-advantaged projects.

The SALT cap increase and preserved PTET workarounds provide immediate tax relief, while stable capital gains and individual/business tax rates ensure long-term predictability.

I urge NYC property owners and developers to act now. Review your portfolios to identify assets eligible for bonus depreciation or OZ investments. Engage tax advisors to maximize SALT and QBI deductions, and explore LIHTC opportunities for affordable housing projects. The bill’s time-sensitive benefits, like the temporary SALT cap increase and bonus depreciation, demand proactive planning.  Let’s harness these opportunities to build wealth, legacy, and a stronger New York City.

NYC Charter Changes on the 2025 Ballot: A Game-Changer for NYC Developers

The 2025 Charter Revision Commission, convened by Mayor Eric Adams in December 2024, proposes four key amendments to the New York City Charter to address the city’s housing crisis and streamline the development process. These proposals, detailed in the Final Report, aim to accelerate affordable housing production, simplify land use procedures, and modernize planning tools. Below are the specifics of each proposal, including their objectives, mechanisms, and potential impacts on the NYC development market, as extracted from the report.

Affordable Housing Fast Track

1. Objective: To expedite the development of publicly financed affordable housing by providing zoning relief for such projects.  
2. Details: The proposal introduces a new action at the Board of Standards and Appeals (BSA) to grant zoning variances for affordable housing projects that include income-restricted units and are financed with public funds (e.g., through the Department of Housing Preservation and Development [HPD] or other city agencies). The BSA would be authorized to waive certain zoning restrictions, such as height, bulk, or use regulations, to facilitate these projects. The process requires public notice, a hearing, and specific findings to ensure projects align with public interest, including affordability and neighborhood compatibility. The proposal also mandates that the BSA prioritize applications for projects on city-owned land.  
3. Rationale: The report cites the city’s housing crisis, with 1.4 million households paying more than 30% of their income on rent and a vacancy rate below 2% for affordable units. Current zoning processes under the Uniform Land Use Review Procedure (ULURP) can take 12–18 months, delaying critical housing projects. This fast-track mechanism aims to reduce these timelines significantly.  
4. Impact on Development: Developers of affordable housing projects could benefit from faster approvals and greater flexibility in navigating zoning constraints, particularly for projects on underutilized city-owned parcels. This could lower pre-development costs and risks, encouraging more affordable housing development.

Simplified Review Process for Modest Projects  

1. Objective: To streamline the land use review process for small-scale housing and infrastructure projects that currently face disproportionate regulatory scrutiny.  
2. Details: The proposal creates a new, expedited review process for “modest” land use actions, such as the disposition of small city-owned properties (e.g., parcels less than 5,000 square feet), minor zoning map changes, or small-scale infrastructure projects. Unlike the current ULURP, which applies a uniform, lengthy review process to all projects (taking up to 7 months for City Planning Commission and City Council review), this new process would involve a shorter timeline, simplified public review, and approval by the City Planning Commission alone, without requiring City Council action. The report specifies that projects must meet predefined criteria, such as size or impact thresholds, to qualify.  
3. Rationale: The report highlights inefficiencies in ULURP, noting that minor actions, like the sale of a city-owned lot “mere inches wide,” undergo the same rigorous review as large-scale developments. This proposal aims to free up city resources and expedite smaller projects critical to housing and infrastructure goals.
4. Impact on Development: Developers of small-scale housing projects, such as infill developments or conversions, will face reduced bureaucratic hurdles and faster approvals, potentially lowering costs and encouraging investment in smaller parcels. This could stimulate development in underserved neighborhoods where modest projects are feasible.

Replacement of Mayor’s Veto with Appeals Board 

1. Objective: To enhance borough-wide and citywide perspectives in land use decision-making by replacing the mayor’s veto power with a more representative review body.  
2. Details: The proposal eliminates the mayor’s ability to veto land use decisions made by the City Planning Commission and City Council under ULURP. Instead, it establishes a new Appeals Board comprising citywide elected officials (e.g., mayor, comptroller, public advocate) and borough presidents or their designees. This board would review appeals of land use decisions, requiring a majority vote to overturn or modify a decision. The board’s decisions would be based on criteria such as consistency with citywide planning goals, borough needs, and public welfare. The report notes that the board’s composition ensures representation from all boroughs, addressing concerns about localized decision-making dominating citywide priorities.  
3. Rationale: The mayor’s veto power is seen as a potential bottleneck, as it allows a single official to override decisions made through extensive public and legislative review. The Appeals Board aims to create a more balanced, transparent process that considers broader city and borough interests, particularly for housing projects with regional impact.  
4. Impact on Development: Developers may benefit from a more predictable and less politically charged approval process, as the Appeals Board’s diverse composition could reduce the risk of unilateral vetoes. This change could encourage larger-scale projects that align with citywide housing goals, though developers must still navigate the board’s review criteria.

Consolidation and Digitization of the City Map

1. Objective: To modernize the city’s outdated mapping system to improve transparency and efficiency in land use planning.  
2. Details: The proposal mandates the consolidation of the city’s current system of over 8,000 paper maps into a single, digitized City Map maintained by the Department of City Planning. The digital map would integrate all geographic, zoning, and land use data, making it publicly accessible online. The proposal includes requirements for regular updates, public input on map changes, and integration with existing digital platforms like ZoLa (NYC’s Zoning and Land Use map). The report emphasizes that the digitized map will serve as the official record for all land use actions.  
3. Rationale: The current paper-based City Map is fragmented, outdated, and difficult to access, creating inefficiencies for planners, developers, and the public. A digitized system would streamline access to critical data, reduce errors in planning, and enhance transparency in the development process.  
4. Impact on Development: Developers will gain easier access to accurate, real-time zoning and land use data, reducing due diligence costs and risks of planning errors. This could accelerate project feasibility studies and improve coordination with city agencies, particularly for complex or large-scale developments.

Implications for the NYC Development Market

These proposals, if approved by voters, could significantly reshape the NYC development landscape:

• Affordable Housing Developers: The Fast Track and simplified review processes will lower barriers to entry, particularly for projects on city-owned land or those with public financing, potentially increasing the supply of income-restricted units.  
• Small-Scale Developers: The streamlined process for modest projects will encourage infill and smaller developments, which are critical in dense or underutilized neighborhoods.
• Large-Scale Developers: The Appeals Board and digitized City Map will provide greater predictability and transparency, benefiting complex projects requiring extensive coordination with city agencies.  
• Challenges: Developers must navigate ongoing political tensions between the mayor and City Council, which could influence future regulatory changes. Community opposition to zoning variances or large projects may also persist, requiring robust engagement strategies.

The 2025 Charter Revision Commission’s housing and development proposals, as detailed in the Final Report, offer targeted reforms to address New York City’s housing crisis by accelerating affordable housing production, simplifying approvals for smaller projects, enhancing decision-making processes, and modernizing planning tools.

These changes, set for the November 2025 ballot, could reduce costs and timelines for developers while increasing the city’s capacity to deliver affordable housing. Stakeholders in the NYC development market should closely monitor voter sentiment and engage with the Commission’s ongoing public feedback process to anticipate the impacts of these reforms.

Financial Market Snapshot:

• Federal Prime Rate: 7.5%
• Secured Overnight Financing Rate (SOFR): 4.31%
• United States Effective Federal Funds Rate: 4.33%
• United States Annual Inflation Rate: 2.7%. (Up from 2.4%.)
• US 1-Year Treasury Rate: 4.102%
• US 2-Year Treasury Rate: 3.938%
• US 3-Year Treasury Rate: 3.911%
• US 5-Year Treasury Rate:  4.027%
• US 7-Year Treasury Rate: 4.231%
• US 10-Year Treasury Rate: 4.463%
• Treasury Bill Auction Rates:
• 6-Week Term: 4.265%
• 26-Week Term: 4.125%
• 52-Week Term: 3.925%
• US Bonds:
• 20-Year Bond: 4.942%
• 30-Year Bond: 4.889%
• Mortgage Rates:
• 30-Year Fixed Rate: 6.90%
• 15-Year Fixed Rate: 6.03%
• 5-Year ARM: 6.27%
• Ground Up Construction Rates: 8.5%+
• Hard Money Lending Rates: 9%+

Want to buy or sell land, or even develop yourself? Let’s chat:

Rubin Isak

Managing Principal & Co-Founder

A: 275 Madison Avenue, 20th Floor, NYC

D: 646-775-3488

O: 212-875-1800 Ext. 3488

E: rubin@developmentsiteadvisors.com