Nearly 5K NYC Buildings Losing Abatements by End of Decade
Developers tout the importance of tax abatements when penciling out projects. When those breaks go away, though, they can prove to be a tough break for the renters and owners of once-eligible units.
There are approximately 4,100 properties across New York City that have tax abatements expiring as early as 2030, the Wall Street Journal reported, citing figures from the Department of Finance. The Roebling Index, spearheaded by Compass’ Corey Cohen, tells a more drastic story.
The research and data platform pins the number of expiring abatements between 2023 and 2030 in the city around 4,800 properties, including condos, co-ops and rental buildings. Another 4,600 properties are facing expirations of their 421a tax abatement during the following decade.
The math will not be mathing for those living in those properties. Taxes are likely to explode for approximately 66,000 units through 2030, according to Roebling. One Park Slope resident said his annual tax bill jumped from $140 in 2022 to $7,600 this year; another sizable increase is likely on the way next year.
The end of abatements also imperils rent-stabilized tenants. The expiration of a building’s break doesn’t necessarily mean rent-stabilization status will be lost, but it opens up that possibility. By 2030, that could impact more than 40,000 tenants, many of whom were anticipating an extension of the tax program, which was instead replaced by 485x.
The phaseout period of the abatement expirations should soften the blow. Toward the end of the abatements, they typically begin falling by around 20 percentage points annually until the full tax rate is in effect.
But condo owners looking to sell from under their expiring breaks may not like what the market tells them. Cohen’s analysis of sales involving more than 37,000 condo units losing tax breaks found that values on their blocks appreciated 5.4 percentage points less than those on blocks where the tax benefits had not yet expired.
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