Signs Point to Rollback of City Program That Spurs Development

Why would Bloomberg want to do this? Maybe the tax abatements hurt the city's coffers, but wouldn't taking away incentives to build more sorely needed housing do more damage to the city? Something else is at work here, but I haven't figured it out.

A cynical part of me wonders if it is to try and thwart anyone who might want to build an apartment complex on the West Side railyards where he wanted to build a stadium. This way, nothing else will be built there and he will be able to try and get a stadium there later.

This all reminds me of some wisdom passed onto us by one of the professionals who came to speak at my class a few weeks ago. She said that:

1) Politics is the single biggest driver of real estate development and that at its highest levels, real estate development is 100% politics.

2) The above is especially the case if any of the major player are Black.

3) In real estate market dynamics, the main question is what is the highest and best use of land. When the highest and best use of land is for office space, it's usually too late for the office market. What are the replacement costs? It doesn't make sense to build office space and charge less than $70 per foot.

4) "I would never be an office developer. It's very dangerous financially." When companies move it can dramatically change market dynamics and prices because they take up so much office space supply.

Most interestingly, she said...

5) Lower Manhattan's days as a business district are numbered. The buildings are outdated as office space (little IT infrastructure, old HVAC systems, etc.) and currently office space is cheaper than residential space.

Part of me thinks the jury might be out on this as the market for office space tightens and prices rise, making the development of office space more worthwhile financially.
_____________________________________________________________________________________

Signs Point to Rollback of City Program That Spurs Development

By JULIA VITULLO-MARTIN - Special to the Sun April 6, 2006

There are some indications that the Bloomberg administration is about to cut back one of the most important tools it has for encouraging new residential construction.

Mayor Bloomberg has set up a task force of prominent developers, bankers, housing advocates, community organizers, and government officials to evaluate the merits of one of the largest tax abatement programs in the city, the 421-a program that lowers the new taxes ordinarily imposed on multiunit housing developments. The group will meet for the first time on April 12, with the expectation that a report will be delivered in the fall.

To read this article in its entirety, you must be a subscriber to NYSun.com