It looks like Brooklyn’s development boom will resume soon.
More than a year after it expired, the 421-a tax break was revived by state lawmakers Sunday. Now called Affordable New York, the controversial program was pushed through by pols as part of the state’s $163 billion budget.
Affordable New York will run through 2022. The deal was part of legislation that passed both the state House and Senate, and now sits on Governor Cuomo’s desk, where he is expected to sign it into law.
The new version of the tax break will have higher wage requirements for construction workers on large projects, and will include a 35-year tax break for those projects (up from 25 years), according to the Real Deal.
The 421-a tax break was implemented in the 1970s to jump start construction in New York City at a time when residents were fleeing to the suburbs. It has been modified, expired, and renewed several times since then.
Now it gives a tax break to developers of condos and rentals in outer-borough areas where development isn’t as profitable. In more central areas, including parts of Brooklyn and Manhattan, developers get a tax break if they include affordable housing.
Brooklynites may not have noticed a lull in construction, since workers are busy building plenty of projects in the pipeline. However, land deals and permit applications slowed after the tax break expired because developers found most market-rate rental and condo projects unprofitable to develop in Brooklyn, they told Brownstoner.
Critics have charged the tax break is an unnecessary giveaway of tax revenue to developers and that some landlords have not kept their part of the bargain.
If Cuomo green lights the deal, development in Brooklyn is likely to resume its rapid pace.
[Source: The Real Deal]
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