What's the Future of 421-a?

NEW YORK CITY—New York City’s 421-a Property Tax Exemption Program, a measure meant to incentivize residential housing development, recently expired, only to be renewed with modifications for four years. While the overhaul of the program has elements that developers should like, Governor Andrew Cuomo has made continuation of the law contingent on a prevailing wage negotiation that has the potential to make new rental projects risky.

Created in the 1970′s in an effort to spur New York City housing development and keep city residents from fleeing to the suburbs, the 421-a Property Tax Exemption Program was available for multi-family developments on sites that were either vacant or underutilized. Under its provisions, landlords were exempt from paying the increase in property taxes that resulted from their new developments.