Albany’s New 485-x Incentive Program Falls Short for Williamsburg Development

Proposed plans to construct a two-tower mixed-use development along Williamsburg’s waterfront will likely never become a reality due to some of the provisions of the newly passed 485-x incentive program by New York State legislators. The $1 billion project dubbed “River Ring” was envisioned for the four-acre site that currently serves as a truck parking lot. The project as proposed would add 1,050 rental housing units to the neighborhood, of which 263-units would be designated permanently affordable, as well as a 3-acre public park, $100 million to fund new resilient-infrastructure features, and a 50,000-square-foot YMCA facility. However, due to some provisions within the state incentive program, the project is no longer financially feasible. While the required percentage of affordable units is similar to the former 421-a program, it significantly lowers the income level for eligibility from “130% of so-called ‘area median income’ in the past to between 60% and 80%,” thereby significantly lowering the rental income from the apartments since “permissible affordable rents are based on those incomes.” Further impacting the bottom line is the provision that raises construction costs in much of Manhattan and desirable sections of Brooklyn by mandating “certain wages that are consistently higher than in the past, whether union or non-union labor.” At a time when interest rates are high, it is anticipated that the 485-x program will not incentivize the new housing development it was intended to spark.