Mamdani Still Won’t Back 485x Reform
Mayor Zohran Mamdani wants to build big. Sometimes.
In his six months as New York’s mayor, Mamdani has backed several large-scale affordable housing projects. On Thursday, he attended a ribbon-cutting in East New York for a 386-unit affordable project led by Gotham Organization and Monadnock Development. The second phase of the project, called Innovative Urban Village, will be 453 affordable units.
And earlier this year, the Mamdani administration squeezed 300 more units into the 90-story megaproject at 100 Gold Street, bringing the total units on that property to 4,000.
The administration’s championing of big affordable projects stands in contrast to data released Wednesday that suggests state policy is incentivizing other developers building New York’s rentals to skew small.
Of the nearly 472 projects that have registered to take advantage of New York’s 485x tax abatement program for rentals, just four are planned for more than 100 units. Many are going right up to the line, coming in at 98 or 99 units.
The 485x program offers a property tax abatement for certain rental projects that set aside a share of their units as affordable housing, with restricted rents. But projects of 100 units and over have additional requirements, including a minimum wage standard for construction.
And it appears that those standards have incentivized developers to stay small in their visions. Developers largely don’t build rental housing without a tax abatement or subsidy, meaning that rental projects on the whole are shrinking in size.
That means fewer market-rate apartments. It also means fewer affordable apartments, because these projects all contain a share of affordable units.
At the press conference Thursday for East New York’s Innovative Urban Village, my colleague Ben Miller asked Mamdani about the disparity.
The mayor largely repeated the administration’s preferred refrain on the 99-unit situation: we’re going to have to keep waiting.
“When it comes to 485x, the uptick of the program is something that we’re closely monitoring. It is one of a wide variety of tax incentives that we view as being incredibly critical to building more housing across the five boroughs,” he said. “I do want to note, just as with past versions of the program, we have seen a ramp-up period, and that is something that we’re seeing similar trends when it comes to 485x. So we’re going to continue to monitor this.”
Gov. Kathy Hochul also attended the press conference for Innovation Urban Village. The 485x program is a state tax program, meaning Hochul’s buy-in would likely be necessary for any effort to reform the program.
She gave a pretty rousing speech, noting that the state provided $190 million in funding for the first phase of the project. But she didn’t stick around for questions.
“I’m just getting warmed up, I plan to build so much more,” Gov. Hochul said. “Build, baby, build, baby, build.”
Ben Miller contributed reporting.
What we’re thinking about: I’m continuing to think about the developers that are building big under the 485x program. So far, there are only two of them: TF Cornerstone is responsible for three buildings, while BedRock Real Estate Partners and LMXD are behind another. Each of the four projects is quite large, more than 150 units. What makes these sites, projects or developers different? They so far haven’t been interested in answering questions. Have thoughts? Send them to lilah.burke@therealdeal.com.
A thing we learned: I was thinking this week’s heat might be a record for October. Not even close. In 2019, the temperature reached the second-highest ever for the month at 93 degrees.
Elsewhere…
— Gov. Kathy Hochul had to refund donors millions in campaign donations after her primary was canceled. But she directed donors to send their dollars to the state’s Democratic Party, New York Focus reports. The state party took in $2.6 million in rerouted campaign funds from Hochul and transferred $10 million to her general election campaign.
— Mayor Mamdani is joining those donors in throwing his support behind Gov. Hochul’s election campaign. The mayor had been quiet about Hochul’s bid for reelection since his endorsement in February, but dropped a short-form video boosting her Thursday, Politico reports.
— The city has so far granted more than 6,800 pied-à-terre tax exemptions from the upwards of 11,000 applications it received, according to City Hall, Crain’s reports. That means, when combined with other adjustments made by the city, fewer than 10,000 property owners will be responsible for the tax.
Closing time
Residential: The most expensive residential sale recorded Thursday was $6.8 million for a 3,830-square-foot house at 8 Polhemus Place in Park Slope. Ria Browne with Compass had the listing.
Commercial: The most expensive commercial transaction was $26.9 million for a 69-unit apartment building at 200 Linden Boulevard in Flatbush. Greystone Development purchased the property after they filed a foreclosure in 2024.
New to the Market: The highest price for a residential property hitting the market is $17.75 million for a 4,364-square-foot, sponsor-sale condominium at 200 West 88th Street on the Upper West Side.
Breaking Ground: The largest new project filed was for a proposed 80,450-square-foot, 89-unit project at 62 West 116th Street in South Harlem. Naresh Mahangu filed the permit on behalf of The Grun Group.
— Matthew Elo
