The landlord of 2 Gold St. gets a whopping $7,481,876 state property tax exemption in return for offering stabilized apartment rents.
BY COLIN MIXSON
An updated list of rent stabilized buildings in Lower Manhattan has gone live on Community Board 1’s website, giving would-be residents an opportunity to snatch some of the best state-subsidized deals in town, according to the list’s creator.
“If word is out that you can rent next door for less money, for a rent that doesn’t go up, why would anyone rent at the market-level place?” said CB1 member Tom Goodkind. “You’d have to be nuts!”
The list — compiled by Goodkind with help from state Sen. Daniel Squadron’s office — details 21 Downtown properties offering stabilized rentals, along with the lavish tax exemptions they enjoy, mainly through the 421-a tax abatement program.
The tax breaks, ranging from $303,341 for 213 Front St. to a whopping $7,481,876 exemption for 2 Gold St., often leave landlords paying pennies on the dollar for their property tax.
In the case of 2 Gold St., the property owner was charged $527,559 after abatements on an annual property tax totaling more than $8 million, according to NYC Department of Finance records from June.
In exchange for those abatements, landlords commit to reduced annual rent increases, which in 2016 meant a zero-percent increase for one-year leases, and a two-percent increase for two-year leases in rent-stabilized buildings.
The 421-a tax abatement program expired in January 2016 after negotiations broke down between the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York, with the two parties failing to agree on wage requirements for construction workers at 421-a developments, leaving new residential developments ineligible for the exemption.
But that doesn’t mean the two groups couldn’t come to an agreement in the future, and Goodkind hopes that his list will help fuel a deal by driving would-be renters away from non-stabilized buildings, he said.
“It puts pressure on guys in market buildings to go to their reps and say, ‘we want to go stabilized,’” Goodkind said.
The list is certainly a helpful tool for new residents looking to settle Downtown, but not everyone is convinced that the effect on the market will be substantial enough to make non-stabilized rentals a thing of the past, according to a CB1 staffer.
“Do I think releasing this report is going to force the market-rate units to go stable? No,” said Diana Switaj, director of planning and land use at CB1. “Many of the people in our district are so wealthy it’s not going to matter to them, but it does help people, and it fosters a sense of community.”
Just because a unit is rent-stabilized doesn’t mean landlords can’t charge market rates for new leases, and, in many cases, savings only become apparent over time as the reduced annual rent increases are outpaced by the market, according to real estate guru and Fidi Fan Page author Luis Vazquez.
For Lower Manhattan, that means college students and young professionals likely to move after a few years won’t enjoy the same savings as a family looking to settle down, Vazquez said.
“At the end of the day, everything is essentially market rate,” said Vazquez. “When you look at a large part of the housing market, college grads and people new in their careers, they turn over very quickly, and those rent-stabilization benefits disappear.”
