Billionaire Buyers of NYC Condos Might Get Tax Break Meant for Low-Income Housing

Thursday, 11 Oct 2012 08:40 AM

By Dan Weil

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Billionaires paying more than $90 million for units in a new condo building in New York City might receive tax breaks of more than $150,000 a year from a program designed to boost low-income housing.

That program allows developers to take tax breaks of up to 80 percent for buildings where 20 percent of units go to low-income families, CNBC reports. The tax benefits are then passed on to residents.

Luxury developers in Manhattan commonly exploit a loophole in the law that allows them to provide affordable housing units at another location. Developers of the building in question, One57, which overlooks Central Park, purchased credits that helped finance affordable housing units in the city’s outer boroughs.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

The building’s developers have applied for the tax break, but the city hasn’t granted them final approval yet.

"This is an outrageous giveaway," Brad Lander, a New York City councilman who has sought to repeal the tax benefit, tells CNBC. "We can't afford to be giving away millions of dollars in tax breaks for nothing."

Media reports say at least two billionaires have bought units in the building.

While the overall home market has struggled to recover from the Great Recession, the high end has been on fire recently.

Toll Brothers, the country’s largest luxury home builder, reported that its unit deliveries soared 39 percent in the quarter ended July 31 from a year earlier.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

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