Multifamily developers with projects in New York City facing construction delays—projects that were eligible for 421 property tax exemptions—say they've been left holding the bag by the NY State Legislature, which let the tax credit known as Affordable New York expire last month.

The 421 tax provision, first enacted 51 years ago, offered a property tax exemption for housing projects in NYC that include a percentage of units designated for lower-income residents. According to a study by NYU's Furman Center, nearly 70% of rental housing built in the past decade in NYC used the tax abatement.

According to a report in the Wall Street Journal, the expiration of 421 forced multifamily developers in the city to scramble to install a project's foundation before June 15 in order to be eligible for the property tax exemption, which also required that the project complete construction before June 15, 2026.