New York’s 99-unit building era is in full swing. But one developer appears to be bucking that trend.
TF Cornerstone intends to use the 485x tax abatement program to build three large rental projects in Brooklyn, according to city data.
That would make the developer the first to be subject to the 485x’s construction wage standard, a cost most developers try to avoid by building smaller. As the real estate industry and the Mamdani administration trade barbs over the abatement program, TF Cornerstone’s projects will be closely watched.
The developer submitted three notices to the city of its intent to apply for the abatement program’s Option A, which is specifically for projects of 100 or more units. The projects in question are located at 273 West 22nd Street in Chelsea, and 2 Oak Street and 2 Noble Street on the Greenpoint waterfront, according to city data.
At the Chelsea lot, TF Cornerstone is planning to build 278 apartments. An ownership company associated with the developer purchased the lot in 2012 for $35 million, according to city property records.
The two Greenpoint lots are adjacent. TF Cornerstone plans to build 792 units for the Noble Street lot and 268 for the Oak Street lot. The developer purchased the Noble Street lot for $144.1 million and the Oak Street lot for $30 million in July of 2024.
Eligible projects with more than 150 rental units are entitled to a 40-year tax benefit through the 485x program if they make one-quarter of their units affordable. That means that the two buildings would need to be viewed as one project to meet requirements. All of the affordable units across the two lots will be concentrated in the Oak Street building, which is planned to be almost all affordable units.
The developer is planning to commence the Manhattan project in September and the Brooklyn buildings in October, according to city records. The company declined to comment.
The 485x program is New York’s latest incentive to encourage multifamily rental building. But it has drawn ire from developers for its construction wage standard. Projects with more than 100 units must pay a minimum $40 per hour construction wage. For projects over 150 units in hot areas like Lower Manhattan, Long Island City, and Greenpoint, that jumps to about $72.45 per hour, or a portion of the prevailing wage standard.
Those wages have incentivized developers to build rental projects with 99 units and fewer, allowing them to take advantage of the program without those wage standards. Critics of the program have said the wage floor is putting a damper on much-needed development in New York.
The Mamdani administration and defenders of the program have said they need more time to see how the program works, since it has only been used by developers for about two years.
At a City Council budget hearing Tuesday, the city’s housing commissioner Dina Levy said her agency had not seen anything “untoward” so far with 485x.
“We do want to see this program take off, and we will continue to explore whether or not there are issues with folks not building,” she said.
Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, similarly said he expects more big projects to come in time as developers “get their arms around” the program.
“We know that there are buildings that are going to go up with these wages,” he said in April. “I think it’s going to level out, I actually think it’s going to work.”
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