Posted May 3, 2024, 7:56 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 52,036
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https://nypost.com/2024/05/02/opinio...oklyn-project/
Albany’s flawed new housing tax break just killed a magnificent Brooklyn project
By Steve Cuozzo
May 2, 2024
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Hochul’s new 485-x program, announced as part of the state budget deal, supposedly will encourage developers to build more “affordable” and market-rate apartments in a city starved for them.
It’s been praised by many elected officials and civic boosters who should learn to read beyond the press release headlines.
The 421-a tax breaks spurred construction of 56,528 new housing units from 2014-2021 alone, of which 16,090 were affordable.
Although 485-x also provides tax incentives, it’s fatally booby-trapped with two provisions that will deter developers from even thinking about new projects in an age of punishing interest rates.
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We can report that the misbegotten measure has killed plans for River Ring, a $1 billion, four-acre complex on Brooklyn’s East River waterfront that was to be built by Dumbo and Domino Park developer Two Trees Management.
Two Trees bought the land four years ago.
The site – now a truck parking lot – was to have two handsome apartment towers designed by acclaimed architectural firm BIG.
It would’ve had 1,050 rental apartments, of which 263 would be permanently “affordable” and enjoy the same amenities as market-rate units.
Two Trees would’ve also created a 3-acre public park, provided water-based recreation activities, paid for $100 million in new resilient-infrastructure features and built a 50,000 square-foot YMCA facility.
The park would’ve connected with Domino Park next door and eventually provided unprecedented public waterfront access from South Williamsburg to Greenpoint.
It was a win-win for the neighborhood and for the cause of new-home construction.
But the dream depended on state renewal or replacement of 421-a.
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As a result, Two Trees development director David Lombino told The Post, “The goal posts were massively shifted.”
The devil lies in details of 485-x that Hochul threw in to placate advocates of forcing developers to give apartments away almost for free, and to appease politically potent union leaders.
Although 485-x doesn’t require a higher percentage of affordable units than 421-a did, it fatally lowers the income level for tenants to be eligible for affordable units to far below what they were under 421-a: from 130% of so-called “area median income” in the past to between 60% and 80%.
Since permissible affordable rents are based on those incomes, developers such as Two Trees would receive significantly less rental income from its apartments.
The program also untenably hikes construction costs in much of Manhattan and desirable sections of Brooklyn.
Lombino says that will have a “chilling effect” on all development in those areas, not only at the River Ring site.
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Two Trees, which has always paid good wages for construction jobs, says it couldn’t afford the combination of additional labor costs and reduced rental income at River Ring that 485-x requires.
So unless a miracle happens, River Ring will remain a parking lot off-limits to the public — and New Yorkers be damned.
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