As news emerged last month that the 421-a tax break program was set to expire January 15 of this year, developers made a mad dash towards the city's Department of Buildings. Well, not literally of course, but close to 8,000 permits were approved for 299 different projects, the third highest monthly total in the past seven years, the Wall Street Journal reports.
In essence, the 421-a tax abatement program allowed developers tax exemptions on the development of vacant land into a residential building with at least 20 percent affordable units. The program expired for the most part because developers were unable to reach an agreement with unionized workers on wages for construction.
In December, with no resolution in sight, developers decided to capitalize on that uncertainty. Of the 7,781 permits that were issued, 4,599 were in Brooklyn a staggering 59 percent. Queens, not Manhattan was second with 26 percent of the total permits. Manhattan accounted for a lowly four percent, but that in large part can be attributed to more stringent 421-a guidelines that applied to the borough.
The total number of permits issued in 2015 far surpassed the previous highest record set in 2008, according to the WSJ. That year 33,911 permits were issued, and this year that number climbed to 56,248, the highest since 1962.
· New York City Developers Rushed to Get Permits Before Tax Break Expired [WSJ]
· 421-a Tax Break Expires as Deal Between Developers and Labor Falls Apart [DNAinfo]
· Everything You Need to Know About NYC's 421-a Tax Program, Poised to Expire Today [Curbed]