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421a Tax Abatement

New York State Capitol, State Street
Albany, NY 12207
Residential, Sales, Conversion, Leasing/Rental, Condo

The 421a tax abatement is a partial property tax exemption for the development of multi-family housing in New York City. "421-a" refers to a line of New York State property tax law that was first passed in 1971. In certain areas of the city, called Geographic Exclusion Areas (GEAs), developers must build affordable housing units either on- or off-site in order to qualify for the tax break. Although these GEAs have been significantly expanded over the years, it has been possible to recieve 421a in most of the city without building affordable housing for the entire history of the program, and until 2009, affordable housing was not a requirement ot recieve 421a in almost all of Manhattan above 96th Street and below 14th Street. The program has come under fire by critics who allege it provides little affordable housing, subsidizes ultra-luxury condos and has a juicing effect on land prices.

The 421a program was officially set to expire on June 15, 2015, but a few days after, the State Assembly gave it a six month extension on the condition that the Real Estate Board of New York (REBNY) and the Building and Construction Trades Council of Greater New York would work out a dispute over prevailing wage provisions for construction workers on 421a-eligible projects. Governor Cuomo, who favored prevailing wages, and Mayor DeBlasio, who favored requiring more affordable housing and ending the program for condos, publicly disagreed with each other's positions for months. The program then expired again on December 31st, and on January 15, 2016 was declared officially null, as no agreement was reached on prevailing wages.

While many buildings will continue to receive benefits under 421a for years to come, no new projects will qualify for the benefits as of December 31 2015. It is currently unclear if the Assembly, real estate lobbyists, labor lobbyists and the city of New York will come together to replace 421a with another development and affordable housing program in the near future.

  • Address New York State Capitol, State Street

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