Two Incentives for Development Were Passed in 2017
Saturday, November 4, 2017
On August 9, 2017, the Greater East Midtown Rezoning was passed by the New York City Council and is now in effect. These zoning amendments create a special zoning district from the north side of 39th street to 57th Street and from Madison Avenue to 3rd Avenue (to 2nd Avenue between 42nd and 43rd Street, the “Pfizer block”). Landmarked buildings in this special zoning district will be able to sell their air rights to any new construction site in the district. The zoning amendments make it possible for new office buildings to be built taller in exchange for transit improvements and contributions to a fund for public realm improvements.
In April 2017, as part of the state budget negotiations in Albany, the 421-a tax abatement program was renewed under a new name, “Affordable New York.” The program provides developers of new residential projects with 300 units or more in certain areas of Manhattan, Brooklyn and Queens, who create a specific number of rental units to remain affordable for 40 years, and pay construction workers an enhanced average wage and benefits, to be eligible for property tax abatements for 35 years. The legislation is controversial because New York City loses significant tax revenues and the apartments are not permanently affordable. The program is administered by the New York City Department of Housing Preservation and Development (HPD). The State has quietly stopped issuing tax exempt bonds to finance projects where a minority of the units are affordable, in favor of project that are 100% affordable.