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Report: Residential Construction Permits Up In NYC Despite Lack of 421-a Tax Credits
By
David Colon
Published Nov 4, 2016
Modified Nov 4, 2016
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Alliance for Tenant Power
By
David Colon
Published Nov 4, 2016
Modified Nov 4, 2016
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New York State's 421-a tax abatement, a subsidy for developers who include affordable housing in their projects in New York City, expired earlier this year after real estate executives and union officials couldn't come to an agreement on how much to pay construction workers on projects that got the tax credit. Despite the fact that the '70s-era subsidy developed a reputation for being better at funneling money to developers than adding affordable housing to the city, there were predictions that the expiration of the program would negatively impact new construction in New York City. But a new report from the Furman Center shows that construction permits for residential units have rebounded to 2014 levels in the third quarter of this year, potentially proving that, as always, nature finds a way.
The Furman Center's report shows the number of permits given out for the construction of residential units rose 49% from the second quarter of 2016 to the third quarter. The 5,256 permitted units was also a 150% increase in permits compared to the third quarter of 2015.
The report shows the amount of permits given out every quarter since the first quarter of 2004. While there was a steep decline in the number of permits between the fourth quarter of 2015 and the first quarter of 2016 (when the 421-a program expired), the number of permits given out rose in the second quarter of 2016, and almost reached the amount of permits given out in the third quarter of 2014.
However, Mark A. Willis, a senior policy fellow at the Furman Center, says more residential construction projects does not necessarily mean more apartments. "While the number of units authorized through 2016 seems to have rebounded to 2014 levels, the average number of units per building is quite low, at just under 8 units per building in Brooklyn and 7 units per building for Queens," he told Gothamist, explaining that the increase seems more tied to the development of smaller buildings, not mid-level and high rise apartments.
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David Colon
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