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421-a Building Analysis
March 16, 2015
The 421-a partial tax exemption program is set to expire in June 2015. While some have called for the termination of the program, the negative effect on housing production would be significant if the 421-a program were not renewed. New York City would likely experience a sharp drop off in the production of new housing units, a major loss of middle income and other affordable housing construction, a continued skewing of the market toward condominium units rather than rental production, and further increase in housing costs.
To demonstrate the importance of the 421-a program to the creation of multi-family rental housing—and particularly to the affordable units that many of these projects include—REBNY has analyzed a sampling of some of the larger projects furthest along in the development pipeline. While it is not intended as a comprehensive look at all of the projects that are relying on the renewal of 421-a, this analysis begins to tally some of the market-rate and affordable rental units that would likely not be created if the 421-a program were not renewed this June—a full accounting of the units in jeopardy would likely be considerably higher. These preliminary findings indicate that over 5,484 affordable rental units would likely never be built, along with the 13,801 market rate rental units associated with the same projects.