The housing industry has been dependent upon some form of tax relief in large part to ameliorate flawed real estate assessment policies. By taxing multi-family buildings at levels that consume an undue proportion of forecasted incomes, lenders and developers are discouraged from investing in new multi-family construction. For individual owners, even when unit size and neighborhood location are comparable, cooperative and condominium apartments are often taxed significantly more than are single-family homes and other Class 1 residential dwellings.
The challenge for policymakers is to provide just enough tax forgiveness to achieve desired results while avoiding the prospect of giving away more than is required. This is far more an art than a science and the Administration’s 421-a Task Force deserves a great deal of credit for attempting to reconfigure the program to do just that.
Click here (pdf) to read CHPC’s assessment of 421-a and it’s impact on New York City’s housing market.