It is a question clanging around the minds and meetings of residential lenders this spring: What if the state repeals the decades-old 421a tax abatement? The law, a staple of New York City multifamily finance, has been renewed continually since the 1970s, but comes up for renewal this June. Such a scenario has lenders pondering a financing ecosystem steered almost exclusively toward condominiums and commercial developments such as hotels, or toward that rare development firm that could finance most of its rental project solo.
Indeed, the great multifamily minds of the city generally agree that the abatement is a key crutch propping up development here. And the one thing upon which politicians, lenders, renters and developers all agree is that new housing and improvements in existing apartments in New York City is necessary. Read More