Welcome to the weekly edition of the New York Real Estate newsletter. We'll take a look at what's coming up this week and look back at what you might have missed last week.

The controversial 421-a tax break lapsed last week, following a rush in recent months to get projects started before the deadline to qualify for the now-expired program.

The real estate industry and other proponents have warned that the end of the tax exemption will bring rental housing construction in New York City to a halt amid a severe housing crisis. They’ve indicated they will push to revive the program during next year’s legislative session, but the political dynamics that doomed the effort this year could persist.

For now, the end of the tax break brings up the question: for developers that didn’t get their foundations in the ground before the June 15 expiration, will they pause their plans in the hopes that the Legislature approves a new version of the program next year, or will they change course under the assumption the program is gone for good?

Daniel Bernstein, a real estate attorney at the firm Rosenberg & Estis, said going forward developers may well build condos instead of rental apartment buildings, or not build housing at all if the zoning of a particular site permits that.

“For the most part, [they are] not going to build rental projects because of the uncertainty around the expiration of this program and what comes next,” said Bernstein, who focuses on affordable housing development and tax incentives.

Elected officials and advocates who opposed the continuation of the tax break — on the grounds that it’s a giveaway to developers — celebrated its demise last Thursday, joining city Comptroller Brad Lander in calling for comprehensive property tax reform as an alternative.

“421-a must stay dead,” Ellen Davidson, a tenant attorney at the Legal Aid Society, said Thursday. “I’ve seen it die before and I’ve seen it come back to life.”

State Sen. Brian Kavanagh (D-Manhattan), chair of the body’s housing committee, echoed Davidson on the program’s demise, saying he’s “hoping it stays that way.”

Lander has argued the end of 421-a — which helps offset a disproportionate tax burden on rental buildings — provides an opportunity to reform the property tax system as a whole, including the overtaxing of rentals. He's hoping to make progress on the issue this year, but it will also be a heavy political lift.

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NUMBER OF THE DAY: 3,439 — the number of unsheltered homeless individuals in New York City, according to the annual HOPE count (though advocates have long held this figure is a significant undercount.)

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RECESSION COULD BOOST OFFICE BUILDINGS, ROSS SAYS — Bloomberg’s Natalie Wong: “Real estate billionaire Stephen Ross says companies struggling to get workers to return to offices could see a flood of employees heading back if a recession hits the US. ‘Employers have been somewhat hesitant because they didn’t want to lose their employees, but I think as you go into a recession and people fear that they might not have a job, that will bring people back to the office,’ Ross said in a phone interview. ‘The employees will recognize as we go into a recession, or as things get a little tighter, that you have to do what it takes to keep your job and to earn a living.’…

“Ross’s Related Cos., the developer behind Hudson Yards in New York City, owns office buildings and other developments across the US. New York landlords, politicians and business executives have been vocal about the importance of bringing people back to the office. Banks such as Goldman Sachs Group Inc. have been at the forefront of getting employees back. Despite the push from certain employers, office attendance is below pre-pandemic norms. As of June 8, 41% of workers in the New York metro region were back at their desks, according to security-data firm Kastle Systems.”

CITY RELEASES UNSHELTERED HOMELESS COUNT — POLITICO’s Janaki Chadha: A count of the city’s unsheltered homeless population found 3,439 people sleeping on streets and subways in early 2022. The count showed a significant spike — about 1,000 individuals — from the 2021 count, which the Department of Homeless Services attributed to changes caused by the pandemic, particularly the overnight closure of subways. The city conducts the survey — called the Homeless Outreach Population Estimate — annually to estimate the number of homeless individuals who are not in the city’s shelter system. This year’s count was conducted over four nights in January by service providers and staff, per DHS.

WEEKEND MARRED BY FLIGHT CANCELLATIONS — Newsday’s Vera Chinese: “Thousands of flights were delayed or canceled at metropolitan-area airports over the weekend, with slowdowns continuing Sunday amid a national rise in travel demand, staffing issues and weather problems. Sunday there were 285 delays and 78 cancellations at Kennedy Airport, 201 delays and 73 cancellations at LaGuardia Airport and 208 delays and 103 cancellations at Newark Liberty International Airport as of 8:45 p.m., according to the website FlightAware. There were five delays and a single cancellation at Long Island MacArthur Airport in Ronkonkoma Sunday just after 9:40 p.m. Nationwide, there were 4,920 delays and 896 cancellations as of 8:50 p.m. Sunday for flights into, out of or within the United States, according to FlightAware. Saturday saw 6,454 delays and 860 cancellations across the country, according to the website.”

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EICHNER CALLS IT QUITS IN CROWN HEIGHTS — The Real Deal’s Joe Lovinger: “A Crown Heights spice importer has filed plans for a residential development on the same land near the Brooklyn Botanic Garden where Bruce Eichner’s Continuum Company spent years trying to build a much larger one. The new filing for 960 Franklin Avenue, from Zev Golombeck, calls for six stories and 293 apartments. It’s one-fifth as many homes as the 1,500 that Continuum and Lincoln Equities filed to build in 2020 in two 39-story towers spanning 1.4 million square feet. The reduction will spare the project from the rezoning drama that doomed Eichner’s plans.”

RUSSIAN OLIGARCH CAUSES REAL ESTATE DISARRAY — New York Post’s Kathianne Boniello: “A sanctioned Russian oligarch is trying to ‘blow up’ three Manhattan development projects he’d invested in via shell companies, according to a lawsuit. Nine days before Russia invaded Ukraine, Mikhail Vasilyevich Klyukin — a board member for Sovcombank, Russia’s ninth-largest bank — sent letters to the financial institutions, lenders and attorneys supporting the three projects, claiming developer Gary Vinbaytel should be removed, without saying why, Manhattan Supreme Court papers show.”

TENANTS THREATEN L+M APARTMENT BID — The Real Deal’s Joe Lovinger: “A developer’s fresh idea to fix up aging Manhattan apartments could be spoiled by some of their tenants. This winter, L+M Development Partners struck a deal to buy Knickerbocker Village, an 88-year-old affordable housing complex in Two Bridges. Ron Moelis’ firm, one of New York’s largest developers of affordable housing, promised to bring in new federal funding via Section 8 to pay for repairs and keep rents low for existing tenants.

The tenants association came to terms with L+M, but some Knickerbockers aren’t playing ball. In a lawsuit filed last week, the dissenting tenants aim to block the sale, arguing it would violate the little-known program that has kept rents low across the development’s 12 buildings for decades. The newly formed Concerned Tenants of Knickerbocker Village are suing the state’s Division of Homes and Community Renewal, which signed the deal with L+M and the official Knickerbocker Village tenants association in February.”

— The three-month closure of the Sitterly Road Bridge is prompting concerns from locals about traffic jams.

— Manhattan District Attorney Alvin Bragg is rolling out a plan to address shoplifting and smash-and-go robberies.

— New Jersey landlords have filed more than 40,000 eviction cases in the first five months of the year, after the state lifted its two-year moratorium on removals.

— A labor dispute forced New Jersey Transit to cancel several rail lines in the middle of the Friday night rush.

— A Juneteenth commemoration in Central Park told the story of Seneca Village, a predominantly Black community on the land that became the park.

— A supportive housing development has opened in the South Bronx neighborhood of Mott Haven.