My Initial Thoughts on The New Housing Deal – Baruch Edelkopf

April 19, 2024 New York: The One aspect I am most excited about is the governor extending the 421a deadline for another six years. While we have seen an uptick in land trading with the 421a benefits grandfathered in, there have been significant challenges in securing construction financing, especially for larger projects. Lenders were concerned about the projects finishing on time and were not enthusiastic about the fallback condo value. This extension will help spur development, especially in the tertiary markets.

Good cause eviction is finally here, and I believe thatits initial concept, we can work with. However, I am more concerned about the changes and amendments that may come in the future. Interestingly, the governor did not refer to it by name; instead, she mentioned that “tenant protections against “price gouging”” would be included.

The new 485x tax abatement is much needed, but I have yet to see the full details. I am all for permanent, long-term affordable housing. We just have to make sure the abatement will incentivize and make financial sense for developers to build. We can’t rely on private dollars to be put to work to fix the housing crisis, if we disincentivize them. Private capital needs to make a return on their investment, and they should be able to do so by providing quality housing.

I was disappointed about the new Individual Apartment Improvement (IAI) regulations. There was a strong sentiment in the market that there would be a pathway to market-rate rents. While this was a step in the right direction, we need to see more relief for the city’s rent-stabilized housing if we expect private landlords to keep up with the increase in costs while maintaining their buildings.

What were your takeaways from today’s announcements?

Baruch Edelkopf
Lic. Associate RE Broker