Gov. Kathy Hochul introduced a workaround last week to give Gowanus developers who had hoped for a 421-a extension in Albany this year another path to move ahead on their projects.
It’s unclear how many builders in the area will ultimately take the state up on the opportunity, as it’s not without risk for property owners. But it offers an option that officials hope will ensure the goals of the ambitious rezoning of the neighborhood are actually realized.
Nonetheless, many projects that are not in the Brooklyn neighborhood — but still reliant on the 421-a tax break, which expired in 2022 — remain in limbo, at least for now.
Like Gowanus, several of them went through the city’s lengthy land use approval process. They include the Hallets North project in Astoria, which would yield 1,400 new homes, and a pair of projects by Two Trees in Williamsburg that would create more than 2,000 new apartments.
The projects in Gowanus, which was rezoned at the end of 2021 for some 8,000 new homes, had an important booster the others did not: state Sen. Andrew Gounardes, who represents the area and appeared with Hochul at a press conference last Tuesday even as some of his colleagues criticized the governor’s move.
“There’s no reason why in this day and age, with the crisis upon us, as deep as it is, that we can walk away from units that are in the ground, ready to be built,” Gounardes said last week. He said the Gowanus rezoning “realized the full potential” of the 421-a program.
“We have to build and build everywhere, because that’s the only way we’re going to get out of this crisis,” he added, calling himself a “pro-housing legislator.”
Several of his colleagues in the Legislature have derided 421-a as a costly giveaway to developers, a major obstacle to reviving the program.
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NJ SUES OVER CONGESTION PRICING — POLITICO’s Ry Rivard: New Jersey is suing to block New York’s new plan to toll drivers coming into parts of Manhattan, the governor said Friday morning. “We’ll bear the burdens of congestion pricing while New York gets the benefits,” New Jersey Gov. Phil Murphy said as he announced the lawsuit. The lawsuit challenges a federal environmental review of congestion pricing — which could add $23 to the costs of driving cars into parts of Manhattan to fund public transit. But it is a political act as well as a legal one, aimed at a long-awaited effort to reduce traffic in the nation’s largest city by asking drivers to pony up.
NY ON TRACK TO ADDRESS TRANSIT BUDGET PROBLEMS — POLITICO’s Ry Rivard: In a stark display of political will on one side of the Hudson River and can-kicking on the other, New York solved budget problems facing its mass transit system on Wednesday while New Jersey ignored ones that threaten its own bus and train commuters. Transit systems in both states were facing a crisis. In Gov. Kathy Hochul’s New York, the Metropolitan Transportation Authority has a balanced budget through 2027 following the Wednesday approval of modest fare increases. Paired with tax and casino revenue from a budget deal this spring, the move ends a pandemic-era saga at the nation’s largest transit agency.
REAL ESTATE DONATES BIG TO HOCHUL, ADAMS — POLITICO’s Bill Mahoney: Hochul has not been shy about her support for the oft-maligned real estate industry. Developers backed a housing compact she attempted to include in this year’s budget, and she actively worked at the end of the legislative session to defeat tenant-friendly “good cause” proposals. And real estate wasn’t shy about boosting Hochul in recent months….The most generous firm appears to be Rudin Management. Five members of the Rudin family gave Hochul a combined $90,000.
— New York Daily News’ Chris Sommerfeldt: “Several prominent New York real estate developers pushing to build a casino in Times Square are among the top donors behind Mayor Adams’ massive $1.3 million campaign fundraising haul over the past six months, according to campaign finance filings released late Monday. Marc Holliday, the chairman and chief executive of SL Green, the city’s largest commercial real estate firm, gave $2,100 to Adams’ 2025 reelection bid on May 24, the filings from the Campaign Finance Board show.”
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KEY COUNCIL MEMBER QUESTIONS MSG PERMIT — POLITICO’s Janaki Chadha: A City Council member with a key role in approving a new special permit for Madison Square Garden stressed the need for a “transformational” revamp of Penn Station — and questioned whether the arena staying put atop the transit hub would hinder that. “Over the past decades, MSG has become part of New York City’s DNA, the scene of some of the most iconic events in sports and entertainment history,” Council Member Erik Bottcher said at a Council hearing Tuesday. “MSG also unfortunately sits crouched atop Penn Station, seemingly holding us back from building a train station befitting the greatest city on earth.”
ADAMS WARNS AWAY MIGRANTS — POLITICO’s Joe Anuta: New York City Mayor Eric Adams, a Democrat, has said for months his city has no more capacity to house asylum-seekers. On Wednesday, he switched on a virtual ‘No Vacancy’ sign with a dramatic change in policy after absorbing more than 90,000 migrants in the five boroughs since last year with little help from the federal government. Under a new mayoral directive, single adult migrants will only be allowed to stay in the city’s shelter system for 60 days, after which they will be required to reapply for a slot.
INVESTMENT SALES SLOW DOWN — Crain’s Mario Marroquin: “A new report by Midtown East-based real estate services firm Ariel Property Advisors found that the dollar volume of real estate investment sales in the first six months of 2023 was almost half of what it was in the first six months of 2022, hinting at a broad slowdown in the city’s commercial real estate market.
“Ariel found that the volume of investment sales across asset types—multifamily, office and industrial—declined by at least 36% when compared to the first half of 2022 and attributed the slowdown to rising interest rates and policy actions, including the lapse of the 421-a tax abatement program, meant to spur the production of affordable housing.”
— Gov. Kathy Hochul has appointed Anthony Hogrebe, a senior City Hall official, to be her new communications director.
— The MTA board approved the first fare hike last week since the pandemic.
— City officials have removed a budding tent encampment for migrants under the BQE.
