Government briefs

Manhattan new building permits drop 70 percent

New building permits issued in the first five months of 2009 showed a year-over-year drop in all five boroughs for the second year in a row, according to data prepared by the Department of Buildings for The Real Deal. Citywide, permits were down 48.5 percent from the same period last year to 720, and were down 69 percent from the first half of 2007, when the building boom was still in full force. Of the five boroughs, Manhattan saw the biggest drop from last year, with 18 building permits filed between January and May, or 72.3 percent fewer than in the same period of 2008. This number was off 71.9 percent from 2007.

Twenty-five indicted for $100 million fraud

Thirteen individuals and one mortgage origination company were indicted last month in a mortgage fraud scheme involving more than $100 million, according to a press release from Manhattan District Attorney Robert Morgenthau’s office. Twelve other people have already pleaded guilty to felonies in the case. The defendants include principals and employees of the mortgage company AFG Financial Group, bank employees, appraisers and attorneys. The crimes took place between June 2004 and April 2009, and the fraudulent closings took place between mid-2005 and the end of 2007, according to the press release. AFG allegedly paid people to find distressed properties and straw buyers for them. AFG is accused of failing to make mortgage payments on the properties, ruining the straw buyers’ credit ratings and sending the sellers’ homes into foreclosure.

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City program turns vacancies into affordable homes

In response to the glut of unsold condominiums and stalled residential construction sites, city officials last month unveiled a $20 million pilot program, which will turn vacant buildings into as many as 400 affordable housing units for low- to middle-income families. Funding for the Housing Asset Renewal Program, which the city hopes will prevent neighborhoods from deteriorating as more buildings are left vacant, will come from the City Council and the Department of Housing Preservation and Development.
 
New 421-a rule could save stalled projects

A policy change last month affecting applications for 421-a tax exemption could help save the tax rebates for a lot of projects that got into the ground last year. The Department of Housing Preservation and Development has revised the rules such that developers can maintain their eligibility for 421-a benefits even if work stops at a project, or if it takes longer than three years to complete, as long as the developer can prove that the delay was caused by an inability to obtain financing. The rules for obtaining the tax abatement have always required that a project be completed within 36 months from when the developer broke ground and that throughout construction there was continuously work performed at the site.

Mayor launches initiatives for media industry

Mayor Michael Bloomberg last month announced several initiatives involving real estate meant to help New York City’s media professionals. The Media Tech Bond Program aims to help companies purchase new manufacturing, research or production facilities or renovate existing buildings to better accommodate new technology. The media tech bonds can be used to finance projects between $1 million and $10 million, according to a press release from the mayor’s office. The city is also working with the Downtown Alliance to lease and set up Hive@55, a workspace for media freelancers at 55 Broad Street. The 5,000-square-foot space will accommodate 50 freelancers and up to 1,850 part-time and drop-in workers.