New York Construction Report staff writer
An extension of the construction completion deadline for the 421-a tax incentive program will result in the creation of 71,000 new apartments in New York City, including 21,000 affordable units. This milestone follows Letters of Intent filed with the New York City Department of Housing Preservation and Development from owners representing nearly 650 buildings.
The extension of the construction deadline was a collaborative effort between Governor Kathy Hochul and Mayor Eric Adams, aimed at addressing the city’s ongoing housing crisis.
“By extending the 421-a construction completion deadline, we are able to put more than 70,000 new homes back on track and create affordable options to live in New York City,” Hochul said. “My administration is committed to combating the affordability crisis in every region of the State.”
The extension, part of the FY25 Enacted Budget, allows eligible projects that began construction between December 31, 2015, and June 15, 2022, to have their completion deadline moved from June 15, 2026, to June 15, 2031. This change is particularly significant for projects that faced delays due to market volatility stemming from the COVID-19 pandemic.
The extension not only safeguards existing projects but also facilitates the development of new housing that meets the diverse needs of New Yorkers. The state’s budget also introduced the “Affordable Neighborhoods for New Yorkers” tax incentive (485-x) to replace the 421-a program, encouraging the conversion of office spaces into residential units and lifting the cap on the floor area ratio that previously hindered affordable housing production.
New York City First Deputy Mayor Maria Torres-Springer emphasized the urgency of addressing the housing crisis, stating, “We’re rising to the moment to meet New Yorkers’ need for affordable housing.”
Supporters of the initiative, including State Senator Brian Kavanagh, noted that the extension effectively removed barriers created by the pandemic, allowing stalled projects to resume and increase the housing supply.
The announcement has received widespread support from housing advocates, local officials, and industry leaders. The Community Preservation Corporation’s CEO, Rafael E. Cestero, remarked on the importance of tax incentives in stimulating housing production, while 32BJ SEIU President Manny Pastreich highlighted the benefits for working families.
The Governor’s broader housing agenda also includes a five-year, $25 billion plan to create or preserve 100,000 affordable homes statewide, with more than 45,000 already achieved.
As New York City grapples with rising housing costs and a low vacancy rate, the extended 421-a deadline represents a significant step toward alleviating the housing crisis and providing more affordable living options for residents.
