New York developers are rushing to complete their 421a projects before the June 2026 deadline, when the city’s long-standing tax exemption program officially ends.

The state’s extension gave developers extra time but demanded deeper affordability, eliminating the 130% AMI option that had made projects financially viable for many. Smaller firms now face tighter margins as rents for affordable units drop, reducing long-term income potential. Despite these challenges, developers are racing to finish, aware that losing 421a could slash project values by as much as 15%.

(source: The Real Deal, picture: Robert Bye)