485x is the tax abatement program that developers love to hate.
The biggest sticking point for developers is the wage standard for construction: for projects over 99 units, developers need to pay a minimum construction wage to qualify for the abatement. The precise wage depends on where the project is located and how big it is.
A push for 485x reform is coming from both sides: Developers and their lobbying groups want the wage standard weakened and Gary LaBarbera, head of the Building and Construction Trades Council of Greater New York, wants it strengthened.
LaBarbera has been agitating around what he calls a “loophole” — developers building several 99-unit buildings to circumvent the wage requirement, while giving the buildings joint facades, shared amenities and connected hallways. The developers also typically ask the city’s buildings department to consider them as a major project, he said.
After a Wall Street Journal writeup about the 99-unit issue, LaBarbera told me his phone has been ringing off the hook.
“I’m in communications with the city at, I would say, every level,” LaBarbera said. “I think there’s going to be a lot of eyes on it.”
Despite the growing awareness, no changes to the 485x wage standard appear to be coming soon.
Two Mamdani administration officials — Deputy Mayor Leila Bozorg and Housing Preservation and Development Commissioner Dinah Levy — said as much at The Real Deal’s New York City Forum on Wednesday.
When asked when the Mamdani administration would start proposing changes to 485x, Bozorg basically said, “not anytime soon.”
“We’re in year two of a 10-year program,” Bozorg said on a panel moderated by TRD columnist Erik Engquist. “Everyone needs to adjust to a new program… I do believe it needs more time.”
Levy echoed that sentiment in a Q&A session with TRD’s Hannah Kramer.
“From pretty much the day I got into this position, we’ve been hearing a lot of consternation about 485x, that it doesn’t pencil and it doesn’t work,” Levy said. “I have been very curious to see some really detailed underwriting from developers as to where it’s falling short.”
So far that detailed developer input has yet to come, Levy said, adding that it’s premature to say whether the program is working or not working.
What we’re thinking about: I’m thinking about the Rent Guidelines Board and what comes next for the real estate industry in the event of a freeze. Lawsuits? Something else? Tell me at lilah.burke@therealdeal.com.
A thing we learned: A New York Times essay about yuppies details the sea change the 1980s saw in terms of interest in investment banking: “In 1976, less than 5 percent of surveyed seniors at the University of Pennsylvania’s Wharton School were headed to Wall Street for investment banking. By 1987, it was one in three.”
Elsewhere
— After complaints that the mayor’s “Rental Ripoff” hearings ignored public housing residents, the administration is launching “NYCHA in Your Neighborhood” forums. Similar to the ripoff hearings, residents will be able to speak one-on-one or in small groups about repairs and other issues in public housing.
— A Queens community garden that required members to commit to anti-Zionism has settled in principle with the city, the Times of Israel reported. Sunset Community Garden, which sits on city-owned land, had asked members to oppose “violent behavior or rhetoric that expresses all forms of hate,” including “Zionist, anti-Semitic, nationalist and/or racist beliefs.” Following a court battle brought by the Adams administration, members will no longer be required to be anti-Zionist, the Parks Department said.
— About 3,000 discount shoppers lined up starting at 3 a.m. for the opening of Primark in Herald Square, “as affordability crisis spirals,” the New York Post reported.
Closing time
Residential: The most expensive residential sale recorded Friday was $8.8 million for 130 West 12th Street, 12C. The West Village condo is 2,400 square feet. Seller Petri Haussila sold the property to an undisclosed LLC.
Commercial: The most expensive commercial transaction was $19 million for 324 West 15th Street. The four-story apartment building is 13,600 square feet. The seller Corlears School is a private preschool.
New to the Market: The highest price for a residential property hitting the market was $27.5 million for 551 West 21st Street, Unit PH19. The Chelsea condo is 6,200 square feet. The unit is selling at a discount from the $33.6 million it fetched in 2017. Compass’ Leonard Steinberg Team has the listing.
— Joseph Jungermann