In last week’s posting, I wrote on how the City’s elimination of the 421-a program has all but stopped the creation of affordable housing. I’d like to now write on the effect this has had on the luxury market.
Since July 1, 2008, no new 421-a Negotiable Certificates have been issued by the HPD. Only a few affordable projects remain which have an executed HPD agreement and still provide these reductions in future real estate taxes.
The requirement now is for developers to include affordable housing onsite to receive a tax abatement, which many developers will elect not to do.
In the process, this has left a real challenge for luxury condo and rental developers alike, as they debate whether or not to include affordable housing. For smaller projects, the time and money might not be worth the effort. There is also a question of whether including an affordable component will diminish the value of the remainder of the fair market units...
Visit The Full Nelson at NYInc for the rest of the article