While the New York City real estate market has never been for the faint-hearted or undercapitalized, the combination of post-pandemic shifts in office demand and high interest rates has made this the most challenging era since the 1970s fiscal crisis. One critical difference is the political shift, most notably with the expiration of the RPTL 421-a tax incentive for residential development, originally instituted in 1971. Likewise, in 1971, control over rent stabilization was shifted to the state level. In 2019, some of the incentives introduced in the 1990s to spur investment in multi-family housing were reduced significantly. These reductions were so significant that there are currently several legal challenges to these changes awaiting a decision in the U.S. Supreme Court.

Nonetheless, both New York State and New York City are taking steps intended to encourage development over the long term, including infrastructure investments, targeted financial incentives, and rezonings.

This alert is centered on the initiatives affecting Brooklyn because it has shown significant momentum in the last decade, and we anticipate this trend will continue. We have updated our 2019 development roadmap to see where opportunities for the future might be found. (Click the map below to zoom in.)