Developers are still planning rentals after 421a, just not as many: housing group

Association for Neighborhood and Housing Development says real estate lobby was wrong on fallout over abatement’s expiration

New York /
Oct.October 10, 2016 09:41 AM

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.

Gov. Andrew Cuomo last month met with industry executives to discuss the future of 421a, which expired in January. [Politico]Rich Bockmann

 

Related Articles

arrow_forward_ios
Zillow: iBuyers Account for Record 1.9% of Home Sales in Q3
iBuyers reached record housing market share, sales volume
iBuyers reached record housing market share, sales volume
(Getty)
Weekly home listings hit record low
Weekly home listings hit record low
The year-over-year rise in home prices was just below the 19.8 percent annual rise in August. (iStock)
Home prices up 20%, but buyers, take heart
Home prices up 20%, but buyers, take heart
Interactive Map of Projects Planned Under Gowanus Rezoning
Here they come: Map shows projects planned in rezoned Gowanus
Here they come: Map shows projects planned in rezoned Gowanus
The report shows the small uptick among single-family homes, townhomes, condominiums and co-ops. (iStock)
After rebound, existing home sales growth slows in October
After rebound, existing home sales growth slows in October
(iStock)
Manufactured home construction projected to hit 15-year high
Manufactured home construction projected to hit 15-year high
So much for that lull: bubble worries return for Canadian property
So much for that lull: bubble worries return for Canadian property
So much for that lull: bubble worries return for Canadian property
(L-R) Four Seasons Sotheby’s International Realty's Gary DiMauro, Redfin's New York market manager Matthew Frary; Four Seasons Sotheby’s International Realty President Laurie Mecier-Brochu and CEO Alan DiStasio are expanding their Hudson Valley footprint (Redfin, Four Seasons Sotheby’s International Realty)
Battle for Hudson Valley heats up as Sotheby’s, Redfin seek to cash in
Battle for Hudson Valley heats up as Sotheby’s, Redfin seek to cash in
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...