5 thoughts on “With 421-a Maneuver, Pacific Park Developer Could Save Buyers $50 Million More in Taxes

  1. This whole 421-a thing is amazingly convoluted but your getting your ‘affordable’ units so what’s the problem? If you really want ‘affordable’ units where they are really needed then developers should be able to what Pacific Park did but across neighborhoods. Allow increased number of market-rate apartments in areas that can support such units in exchange for building affordable units in poorer neighborhoods where the land and construction costs are cheaper. Everybody wins.

    • But in this case, native new yorker, the affordable housing was already coming in. The developer is wrangling a deeper tax break despite adding no new affordable housing.

    • Problem is the developer does NOT lose money on the “affordable” housing units. Low income tenants pay so much and the Fed or State kicks in the difference between what the tenant pays and full market. So, some of YOUR tax dollars go to subsidize rents (not a problem) and the developer not only gets full market rent but a tax break on top of it.

  2. Just like Real Property Tax Law 339y, 480a and others, 421a was crafted and passed by politicians as an end around the real property tax for wealthy property owners and developers. 339y forces assessors to value condominiums as an apartment building. New York state is a market value state meaning property taxes are based on market value as opposed to cost or income when valuing residential property. Condos are residential property but 339y forces the value to be based on income which produces a much lower value. If a luxury condo has a market of, say 200,000 then the income approach forces a value of about 90,000. The condo owner gets at least a 50% break on his home, unlike you or me. 480a is a forest land exemption providing owners of large tracts of woodland an 80% break from taxes. To get this the owner must have a plan in place to harvest, and sell, timber from the land. When was the last time you got an 80% tax break while making a profit? 421a in general means if “some” affordable housing is included in a development then the developer gets tax incentives. The developer may get favorable financing to build the project or get it paid with your tax dollars, rents the units based on income with the difference between the actual rent and market rent paid to the developer with, again, your tax dollars. Property tax wise the assessment must be based on what the tenant pays, not what the developer gets in total. As you can see this can be a huge screwing to taxpayers, just like the others mentioned. Is it time for the people to stand up and demand their politicians to put an end to these welfare exemptions for the wealthy? I think so.

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