The potential sunset of a lucrative tax incentive has developers racing to get into the ground, and city agencies potentially swamped with work.

The 421-a tax exemption is worth millions to real estate developers. It can last up to 25 years and slash tax bills by as much as 95 percent. But the program will sunset on June 15 unless the New York state legislature renews it or revises it, as Mayor Bill de Blasio is proposing. 

If the law is amended to reflect the mayor’s plan, it could require developers who use 421-a to set aside more of their units for affordable housing throughout the city. Currently, this stipulation only applies to Manhattan and some other key neighborhoods. That possible change has some developers who work in the outer boroughs, where they have not been required to set aside apartments for affordable housing, looking to start construction before the tax incentive ends or is amended.

"Primarily, I've seen in Brooklyn and Queens, that owners are trying to get in market rate projects. They're trying to get into the ground by June 15th," said real estate attorney Paul Korngold with Tuchman, Korngold, Weiss, Liebman & Gelles, LLP.

Under current law, developers who wish to get a 421-a tax abatement must commence construction before the law expires. That entails getting a new building permit from the Department of Buildings, and putting concrete or other load-bearing materials in the ground at the project site.

"It’s my understanding that there are upwards of 200 buildings which are waiting to have their final building permits issued at the Department of Buildings," said attorney Ken Fisher with Cozen O'Connor. "With this impending deadline, they've [the Department of Buildings] been overwhelmed with the number of applications who are trying to get clarification on the rules or get approvals."

But a spokesman for the building department said that appointment wait times for initial new building plan examinations have become shorter in recent months, showing an increase in the department’s service levels. 

That's little consolation for developers who stand to lose out if their projects don't get the necessary construction completed ahead of the deadline.

"If we don't have full approval of plans by [June] 15th, with a partial foundation in the ground, we don't know what we're facing,” said Joseph Hentze of Hentze-Dor Real Estate. “And at that point, the project may or may not work." Hentz is waiting on permits for a multi-family development project in Astoria, Queens.

The 421-a program is administered through the Department of Housing, Preservation and Development. According to HPD data, 318 421-a applications have been filed so far in fiscal year 2015. That's up from 227 in all of FY2014, and 178 in FY 2013.

However, a developer can apply for the tax break anytime from when the project begins construction to when it is completed, making it difficult to determine a direct connection between new building permits and applications for the 421-a tax incentive.