Proposals to totally end the condo tax break known as the 421a, which dramatically reduces property taxes, went nowhere two years ago. But a complicated set of restrictions creating exclusion zones where developers have to include affordable housing to get the tax break were put in place. The new rules don't even take effect until summer and have set off a scramble to beat the deadline by starting buildings before they're subject to the restriction. Now, the development community is saying the issue needs to be revisited when the city reviews the "impact" of the changes in December. The early indication is they're going to push hard to kill the changes. For instance, Toll Brothers VP David Von Spreckelsen, who normally talks up the market, tells the Sun:
In a market like this, the legislation fails in every respect. Banks are taking a harder look at the financing of development, land prices are decreasing in the boroughs, and construction costs are increasing...We are going to see the impact.Odds of the "exclusion zones" surviving, anyone?
· Tax Abatement Debate To Be Revived [Sun]
· As Condo Sales Languish, Builders Slam 421-a Reform [Brownstoner]