In a move not likely to boost fundraising efforts with developers, state lawmakers yesterday agreed on a tougher version of the 421-a bill than the city had proposed last December; it is expected to pass when it is brought to the floor on Thursday. The 421-a program, originally enacted in 1971 to spur development in a weak market and set to expire at the end of this year, gives builders significant tax breaks over anywhere from 10 to 25 years. In recent years, even luxury projects in the ritziest neighborhoods have benefited from the law, sparking criticism that the tax breaks are nothing but give-aways in a booming market that would support the creation of new housing on its own. When the City Council proposed extending the bill for another four years back in December, it did so with the proviso that projects in certain upscale neighborhoods be required to set aside 20 percent of its units for people making less than $56,000 a year. (A map from The New York Times of the City’s plan is at right.) The State version not only expands the affordable housing zone (called the “exclusion area”) by 12 neighborhoods but it also brings the income hurdle down to $42,000. (Additionally, it calls for developers to pay workers a “prevailing wage” on participating projects.) While stiffening the affordable housing requirements, the State bill does throw developers one bone: It pushes back the start-date for the new rules to July 2008 which should lead to a wave of projects looking to get grandfathered under the existing rules.
Albany Likely to OK Affordable Housing Bill [NY Sun]
State Revises 421-a “Corporate Welfare” Subsidy [AY Report]
Legislators Agree on 421-a Reform Bill [Crain's]