NEW YORK | City and State struggle to increase residential development

[Crawford]

There is no way to build anything but luxury. Nothing pencils out. They got rid of 421-A. So it's luxury or heavily subsidized, nothing else.

Ironically, it was allegedly pro-housing liberals who got rid of 421-A. The narrative was that it was a giveaway to evil developers, who apparently prefer remaining solvent and building with a reasonable potential for profit. So now nothing is built.

[lio45]

Originally Posted by Crawford

There is no way to build anything but luxury. Nothing pencils out. They got rid of 421-A. So it's luxury or heavily subsidized, nothing else.

Exactly. 100% correct.

Even in much cheaper markets than NYC, it's quite hard to justify building anything non-luxury. I'm looking at building a 10-story tower (~150 units) in my hometown's downtown, and the math doesn't work out unless I can tap into that new $15 billion that was just announced by the Feds to help developers build stuff.

The worst part is that unlike NYC, where luxury will always find buyers, in my hometown, non-luxury doesn't have a good business case (like everywhere else, construction costs being crazy high), but luxury ALSO isn't that safe a bet, because I can't be sure there'll be enough interested wealthy people.

[mrnyc]

Originally Posted by lio45

Exactly. 100% correct.

Even in much cheaper markets than NYC, it's quite hard to justify building anything non-luxury. I'm looking at building a 10-story tower (~150 units) in my hometown's downtown, and the math doesn't work out unless I can tap into that new $15 billion that was just announced by the Feds to help developers build stuff.

The worst part is that unlike NYC, where luxury will always find buyers, in my hometown, non-luxury doesn't have a good business case (like everywhere else, construction costs being crazy high), but luxury ALSO isn't that safe a bet, because I can't be sure there'll be enough interested wealthy people.

so you were planning on building a 10 story apt tower on spec?