Dumbo Condos Affected By Proposed 421a Program

October 13th, 2006


  Courtesy of NY Times

The 421 program was created in 1971 to encourage new investment by abating the taxes on the added value of new construction while maintaining existing taxes. This was in contrast to the city’s J-51 program, which actually reduced existing taxes on rehabilitated residential property. The Bloomberg administration recommended yesterday that the 421 program for developers be overhauled as a way of creating more lower-cost housing. The new plan would expand the two zones in which builders must create affordable housing to get the tax breaks:

“Under the new proposal, those areas would be expanded to include Lower Manhattan, parts of Harlem, the Dumbo section of Brooklyn, Brooklyn Heights and other parts of the Brooklyn and Queens waterfront. The tax break would be tightened in other ways, too. There would be a strict limit on the size of tax breaks to market-rate units, and the maximum benefit — a 25-year tax break — would go only to projects citywide that include low-priced units.”

New development in Dumbo that are under the 421a program include J Condo at 100 Jay Street and Beacon Tower at 85 Adams Street. Barring action, the state law enabling the program will expire on Dec. 31, 2007.

{Bloomberg Recommendations On Tax Break Program Derided, The New York Sun}
{A developing storm over tax-break plan, Daily News}
{New York City Acts to Add Low-Cost Homes, NY Times}

Filed in Real Estate at 1:24 am
Comments
  • Dan
    I don't believe any changes to the law will affect buildings that currently have the abatements in place. My question is what will happen to buildings already under construction (and with units potentially already sold).
  • Dot
    I was wondering the same thing. If a building has filed for the abatement and gets approved prior to 12/2007 are the residents safe? Or does the abatement that's in effect get yanked as soon as the law expires?
  • JW
    Will that affect condos under an existing 421 scheme, or just new developments?
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