The 421-a Completion extension (June 15, 2031 for eligible projects) has made construction of tens of thousands of new apartments economically viable. It is expected that such sites can now obtain financing and resume construction.
Understanding the 421-a Program
The 421-a tax exemption program has been a crucial incentive for developers, facilitating residential construction across the city. By extending the 421-a completion deadline, New York State is reinforcing its commitment to tackling the housing crisis head-on, providing developers with the necessary time to finalize their projects while providing meaningful public benefits (25% – 30% affordable units, economic activity, etc.)
Anticipated Project List
In the coming weeks, we expect the NYC Department of Housing Preservation and Development (HPD) to release a comprehensive list of projects that have filed their Letters of Intent to secure this extension. This transparency will not only aid developers in planning but also serve as a vital resource for lenders and investors looking to get involved in NYC’s burgeoning housing market.
A Call to Developers and Lenders
For developers and lenders interested in engaging with 421-a projects, now is the time to act. The extension presents a unique opportunity to contribute to a significant increase in affordable housing in New York City. At Rosenberg & Estis, P.C., my colleagues and I specialize in navigating the complexities of 421-a projects. We offer comprehensive diligence services for both purchasers and lenders to ensure that investments are well-informed and aligned with all 421-a eligibility criteria.
Governor Hochul’s Vision
Governor Hochul recently announced that the 421-a Completion Date extension could potential allow up to 71,000 new apartments to be built in New York City. This is a sign that the housing crisis demands pragmatic solutions including incentivizing private capital to construct more housing.
Conclusion
The extended 421-a Completion Deadline is a significant step toward solving NYC’s dire shortage of rental housing and affordable housing. If you’re looking to get involved in 421-a projects as a developer, purchaser or lender, please reach out to me and my team at Rosenberg & Estis, P.C. Together, we can help make your project or transaction a success.