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New 421a program will be boon to developers … unless construction costs really balloon
Tax benefits can offset 18% increase in hard costs: report
Will tax benefits under a new 421a program be enough to offset a proposed wage floor for construction workers? A new report by NYU’s Furman Center claims it might, provided hard construction costs don’t rise more than 18 percent in Manhattan.
It remains unclear how much the proposed wage floor — $60 per hour in Manhattan Below 96th Street and $45 in the Brooklyn and Queens waterfront for 300-unit-plus buildings — will increase construction costs.
In November, the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York reached a deal on the wage floor, paving the way for a renewal of the popular abatement program for rental construction. The old 421a program expired in January 2016.
The proposed program also includes a longer abatement period in return for increased mandated affordability concessions.
Last month, Cuomo rechristened the program “Affordable New York.” And Mayor Bill de Blasio has expressed concern that legislators in Albany will try to add larger condominium projects back into the abatement. [Crain’s] — Konrad Putzier