By Eddie Small & Amanda Glowdoski via Crain’s New York Business

A property tax break the city launched a year ago to incentivize landlords to build or expand child care centers is attracting much less interest than Mayor Eric Adams’ administration had prepared for.

In February 2023 the city launched the program, which provides an abatement of up to $225,000 each to any landlord whose work on a building leads to either a new child care center or the expansion of an existing one, part of the Adams administration’s effort to make such centers more accessible and affordable. The law allows for up to $25 million worth of tax abatements over the first seven years of the program, but the city is on pace to give out just $7.5 million during that period, Benjamin Williams, an attorney at Rosenberg & Estis who specializes in property tax law, told Crain’s.

The city had about 2,200 center-based child care facilities overall as of Jan. 30, and 149 were newly permitted between February 2023 and February 2024, according to the Department of Health and Mental Hygiene. But officials received just 32 applications for the child care tax credit during its first year and approved 19 of them, equating to 22 sites, according to the mayor’s office (some applications were for more than one site).

The tax abatement could help developers offset some of the high costs of erecting buildings, ideally enticing more of them to put shovels in the ground.

And more day care centers in general would almost certainly help alleviate the city’s affordability crisis around child care costs. Roughly 80% of city families with children under the age of 5 are unable to afford care, according to the nonprofit Citizens Committee for Children of New York. Savings that landlords get from tax credits tend to trickle down to their tenants, and for retailers and service providers, those can in turn be passed along to customers, although this can be difficult to track, noted Sean Campion, director of housing and economic development studies at the Citizens Budget Committee.

The low number of landlords taking part in the incentive program could be because not enough landlords know it exists. Jay Martin, executive director of the Community Housing Improvement Program, a landlord advocacy group, praised the program itself but criticized the city for the lack of publicity around it.

“The city has done virtually nothing to advertise it, unfortunately,” he said. “It’s always a constant educational effort to get people to sign up for it.”

The mayor’s office defended the outreach the administration has done so far on the tax abatement, saying it shared information about it with the City Council, state legislators and congressional members in March 2023 and has reached out directly to almost 300 new or expanded child care centers. Information about the credit is also available in the Department of Health’s borough offices and as part of the Small Business Services boot camp, the Adams administration said.

Victor Sismanoglou, whose firm Vima Property Group manages about 30 buildings across the city, found out about the tax break through his membership in CHIP and has used it at one of his Upper West Side buildings, home to the day care center Sequence for Cidz. He echoed Martin’s comment that he has not seen much of a push to get people to know about the program, which has worked out very well for him.

“It was a pleasant surprise that the city was actually trying to do something to help us out,” he said. “I wish they did more of this stuff, because they’ve definitely done a real number on what we can collect.”