An affordable-housing advocacy group is calling “liar, liar” on those who say rental development will stop dead in its tracks without 421a.
The Association for Neighborhood and Housing Development, a group representing nonprofit developers who focus on below-market-rate housing, released an analysis claiming that rental development is still trickling in without the contentious tax abatement, Politico reported.
“The suspension of the 421a exemption was expected to have a major and immediate impact on the real estate market, with the big real estate lobby predicting dire consequences,” the organization wrote in an email blast Friday. “In the past few months, we have been learning some new facts about what is happening in some new construction markets and the impact may not be what we were told it was going to be.”
The group pointed to plans filed for small developments, such as a 12-unit building at 978 Kent Avenue in Bedford-Stuyvesant and a seven-story building at 235 West Kingsbridge Road in the Bronx that’s expected to hold 40 apartments, as proof that developers do plan to build rental projects, albeit at a much lower rate than before.
“To be clear, these examples show a specific type of small-scale walk-up rental housing development where land and potential property taxes are relatively low, where the developer has kept construction costs low, and where market rents are starting to increase,” the organization wrote. “But, the fact is new private rental construction is happening without 421a in neighborhoods where the real estate lobby asserted it would not happen.”
Real Estate Board of New York president John Banks pushed back against the report’s findings.
“Facts are facts,” he said through a spokesman. “The 421a program has accounted for a majority of the affordable housing units in the city, particularly in those areas where high land costs, construction costs and property taxes make it most difficult to build below-market rental housing and where economic diversity is more difficult to achieve.”
As The Real Deal reported last week, approved housing construction permits in 2016 reached a high September with 2,218 units approved. That number, however, is way down from last year when developers could take advantage of 421a tax exemptions to build multifamily housing.