There has been a ton of press and debate over Mayor De Blasio’s affordable housing program. It is still uncertain which version of this plan will be finalized and brought to life. Mayor De Blasio used this as a main platform and I am sure it won’t be long until we see it.
Whatever the final plan may be means a large increase of affordable housing being built in our city. Developers will rush into this sector as the forthcoming tax incentives are irresistible causing a drop in new, luxury construction over the next 2-4 years. Luxury condos will still be built but much fewer of them as developers will now have other construction options. This will help the cities housing situation for lower middle income families. At the same time, it will also hurt the big apple’s overall budget as these plans will cost money and the high taxes that the current luxury market affords the city will be flattened. New luxury condo’s construction bring in hundred’s of millions in transfer taxes and real estate taxes yearly. It is also true that the users of these homes circulate their wealth through the cities industries leading to more taxes for the city and income for our businesses.
While our city has yet to figure out it’s housing situation there are many of us in the industry certain that this plan is not an answer, just another profit platform for wealthy builders and a speaking point for politicians.
This does have benefits for our market, especially in the luxury sector. The slowdown of new luxury condo construction will not only lessen the overall saturation of that sector but it help the fewer condos being built to stand out in our market. This will eventual increase the values for these properties and bring back a value balance to the weakest sector in the current real estate market.