Rising property taxes irk NYC developers

February 22, 2011 12:25PM

Frustrated with increasing property taxes on rental apartment buildings, New York City developers and contractors are warning the Bloomberg administration that if it doesn’t change its tax policy, development of new rental buildings will stop, the Wall Street Journal reported. The increase has become a particular concern for owners of rentals built within the past two decades with 20 percent of their units set aside for low-income families. If taxes continue to outpace revenue, the Real Estate Board of New York says new development of these projects will not be possible. REBNY also warned that owners of existing “80/20 buildings” will be forced to convert to condominiums or deregulate their low-income apartments once tax abatements expire. “Once the abatement period is over, they cannot survive at 33 percent of net income,” said Steven Spinola, REBNY’s president. To address the issue, REBNY is pushing a plan to cap taxes at 20 percent of revenue for developers who agree to reserve the low-income apartments for multiple decades. David Frankel, commissioner of the Department of Finance, said he was considering the proposal. “We’re obviously always concerned if someone says to us that taxes would keep someone from investing in a property,” he said. “What we are trying to do is assess properties in the fairest ways we possibly can.” [WSJ]