The expiration of the 421-a tax-abatement program this year has thrust the land market into a precipitous decline. Ofer Cohen, founder and principal of Brooklyn-focused commercial brokerage firm TerraCRG, estimated that land sales would drop by 70% this year.
Developers viewed the tax break as essential to their bottom lines when building rental housing, Cohen said, and few if any development sites have traded hands since it expired. The abatement offered developers a break on their real estate taxes if they included affordable units in their projects.
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