Real Estate Optimistic About New York’s 421a Tax Changes
Herrick partner, Brett J. Gottlieb, was quoted in the Commercial Observer in an article discussing the 421-a tax abatement many developers use for residential development in New York City. It is known that 421-a program is extremely popular among developers because it lowers the cost of constructing residential buildings in the city. The article notes that Brett commented, "[w]ithout the program, the city wouldn’t see much development at all because the city’s tax burden is so high... As a result, the city isn’t really losing property tax revenue through 421-a, because it wouldn’t have collected those taxes in the first place."
Brett continued, "There’s really not another good option that’s out there in terms of creating affordable housing. Developers, like them or hate them, they’re not going to be altruistic and just set aside 25 percent of their units for affordable housing just for the heck of it. There is going to have to be an economic incentive. And if there’s not, they will develop elsewhere."
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