In a surprise move, the Bloomberg administration is expected to push for another four-year extension of the controversial 421-a tax break program, albeit with some modifications. The program, which has resulted in the city leaving an estimated $400 million in taxes on the table, was started in 1971 when you couldn’t give an empty lot away in this town. The benefit to developers and their customers derives from the fact that real estate taxes for the next 10 to 25 years are calculated on the value of the property before being developed. In recent years, the incentives have gone to help developers put up luxury housing in Manhattan and Brooklyn (like Richard Meier’s Perry Street towers above). The extension is not a done deal, however, as the approval of the Office of Management and Budget is still required and the word is that it is leaning towards eliminating the program in favor of a dedicated affordable housing fund.
City Panel Expected to Back Property Tax Break [Crain's]
Mayor Facs Battle over Breaks for Developers [NY Observer]
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