It’s Not Just High-End Developers Needing 421a

Banks: “It is clear that without 421-a, much less affordable housing will be developed.”

NEW YORK CITY—Just as multifamily developers of middle and upscale housing anxiously await word of a replacement for 421a—which would will serve as an incentive to build rental apartments—a new report finds that builders of affordable housing projects also use tax breaks on their projects. The research also examines the impact on projects of labor costs  and how that burden is being handled.

In an analysis of public data available from the NYC Dept. of Housing Preservation and Development regarding the Housing New York Plan (2014-2015), the Real Estate Board of New York found that 98% of HPD’s designated affordable housing projects use some form of a property tax benefit; over 50% of the affordable housing projects use the 421-a tax benefit program and less than 10% of the affordable housing projects are union built.