NYC Developers Have an Hilarious New Dodge Against Big Government

Hey, kids! Let's play an exciting game called "Incentives, How Do They Work?" Spoiler: Not like NYC politicians thought they would.

I admit my game needs a catchier name, but let's save that for another day.

Whatever you want to call it, New York City developers are now incentivized to build "fun-size" apartment buildings instead of the full-sized ones that ordinarily make so much more sense.

Last year, the city launched a tax incentive program called 485-x — speaking of needing a catchier name — to "expand affordable housing," as the city put it, with property tax exemptions for developers building new housing projects that include affordable units or rent-stabilized apartments.

I'm not generally a fan of government meddling, but this is Democrat-run NYC, so tax incentives for rent-controlled apartments are probably about as good as it's going to get for building anything remotely affordable.

Sadly, the meddling doesn't end there. This is NYC, after all.

The city slapped higher ‘affordability’ requirements on projects with 100 or more units, and construction workers on those buildings "will be guaranteed a minimum wage of $40 per hour."

Did you catch that part about 100 or more apartments and higher wages? Because developers certainly did. "There’s an unmistakable trend across New York City," Bloomberg reported today, "Real-estate developers are seeking to construct buildings with exactly 99 units. No more, no less."

The story continued: "In the past four quarters, 28 such permits were filed, more than double the total from the previous 16 years combined, according to city data analyzed by the Real Estate Board of New York, a lobbying group."

And Another Thing: That Bloomberg report is so thoroughly paywalled that I can't even get an archived version to let you read the whole thing. My apologies, but you'll just have to work with the parts of the story above the paywall — which isn't much.

"To those in the industry, there’s no question what’s behind the pileup at that precise number."

Well, yeah. It's the people in City Hall left scratching their heads until they bleed.

This is where I'd remind you that the 485-x program was the brainchild of the office of incumbent mayor Eric Adams, considered a moderate. The city has so much worse in store, since it still looks like Commie Zohran Mamdani will be the city's next mayor.

Commie Mamdani has some fun ideas for remaking the city in his red diaper image, including city-owned grocery stores, $65 million in city funds for trans medical treatment, seizing the means of production, and eliminating the kulaks.

He also wants — and this is where you'll scratch your head hard enough to draw blood — 200,000 "permanently affordable, rent-stabilized housing units." I don't know about you, but I'm having a difficult time trying to square higher developer costs and even more rent control with more construction.

"Show me the incentive and I’ll show you the outcome," Berkshire Hathaway's late vice chairman, Charlie Munger, liked to say. But that's a lesson too obvious for politicians.

My favorite example was four decades ago, when a St. Louis suburb passed an ordnance requiring that bars install breathalyzers for patrons to blow into to see whether they were sober enough to drive. My mom worked next door to one of those bars, and saw first-hand what happened: Drunk guys turned the breathalyzer into a game.

It's happy hour. There's a carnival atmosphere. You have a bunch of guys with a new toy to play with, even if it was mandated by the city council. If I recall correctly, the ordnance lasted just a few months before the city wised up and repealed it.

But New York City, I guarantee you, is about to double down on stupid in ways only a Commie like Mamdani can.

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