Call it the 421a expiration hustle: developers and architects raced to obtain permits and begin construction in December before the tax abatement program expired this month.
Permits for 7,781 residential housing units in 299 projects were granted in December— four times more than the number issued in November, according to new census figures.
This was the third-highest monthly total in at least seven years, the Wall Street Journal reported. May and June saw even bigger surges, when 421a, which grants subsidies to developers who offer affordable units in new buildings, also faced an expiration deadline.
The program was renewed temporarily in June, but with a catch: that negotiations between the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York — a union group — would work out a deal over wage requirements for construction workers at 421a sites. A deal wasn’t reached and the program expired Jan. 15.
Developers received $1.26 billion in exemptions through 421a in the current city fiscal year, according to the Journal. This has been attributed to strong housing recovery, but also the push by developers to get all possible projects underway to quality for breaks, the Journal reported.
In 2015, 56,248 permits were issued in New York City, the most since 1962, according to Census Bureau figures. That number blows away the most recent peak, which was 33,911 permits issued in 2008, though dozens of those projects were delayed for years after the financial crisis. [WSJ] — Dusica Sue Malesevic