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November 30, 2006

City Council Pushes Back on 421-a Proposal

j condo
Yesterday twenty City Council members came out against Mayor Bloomberg's effort to extend the 421-a tax subsidy program, saying that the plan does not go far enough in limiting the eligibility standards. Instead of the administration's proposal, which makes the subsidy contingent upon an affordable housing component only in certain more affluent parts of Manhattan, Brooklyn and Queens (like Dumbo, home of the subsidized J Condo), the twenty City Council members co-sponsored a bill that would required any project in the five boroughs to include affordable housing to qualify. “The administration is proposing to narrow the tax break very slightly,” said David Yassky, one of the 20 co-sponsors of the new bill. “We’re proposing to get rid of the loophole altogether. A project that includes affordable housing deserves taxpayer subsidy. We are completely eliminating the tax break for pure market-rate development.” The administration's logic is that tax revenues from the development spurred by the 421-a program could be used to build affordable housing; housing advocates liken the unrestricted tax breaks to "subsidizing gentrification". City Council speaker Quinn will introduce her own 421-a bill next week, presumably aimed at bridging the divide.
Challenging a Tax Break for Housing Developers [NY Times]
Controversial 421-a Program May Get Extended [Brownstoner]




Posted by Brownstoner at 8:55 AM | Comments (8)
Categories: Development

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From the NYTimes article:

"The new plan would require that the lower-cost units remain permanently affordable to lower- and middle-income tenants, even after the tax break expires."

Do they mean tenants or owners? Would these lower-cost units be owned or rented? PERMANENTLY affordable? Sounds an awful lot like rent stabilization and rent control to me. A bad idea for everybody.

Posted by: Anonymous at November 30, 2006 9:57 AM

Well, it would be optional - not forced on anyone. If you want the tax break then follow the policy. If not you are free to build as you want.
Currently any new apt. building in NYC is not subject to rent regs unless they sign on themselves.

Posted by: Anonymous at November 30, 2006 10:03 AM

I say chuck the tax break completely. Developers just use the tax break to raise the prices on their units. A new pricing calculation would have to be used without the tax break. It's really pretty simple...

Posted by: Anonymous at November 30, 2006 11:04 AM

I am an appraiser in Manahattan. I consistently value new construction condos over the entire island. I can say that the 421-a abatement is the perfect example of the rich getting richer at the expense of the rest of the city. Only affluent developers and the buyers they cater to are benefitting from these breaks. It's amazing to see how many foreign buyers are able to purchase these units at the expense of the NYC taxpayer. In my eyes, this whole program is obsolete. The notion of extending it is absolutely absurd.

What they should do is end the program and invest the money in the city's infrastructure. The existing transportation system can barely handle the 8+ million people who are here now - let alone the larger population that is expected in the coming years.

Posted by: Anonymous at November 30, 2006 11:18 AM

Seems this new bill (in it's current form) would mandate the housing we are looking for, and eliminate the "as of right" benefit for many developers (such as in our area) who take this abatement, though they are only offering market rate housing (i.e. luxury).

A good move in the right direction, according to this man's opinion. I was all for letting it expire, but if they can REQUIRE affordable housing units ans mandatory to participating in the 421a program, then let's go team.

What Ms. Quinn is upto in her own bill is a mystery to me...perhaps something between this bill and the Mayor's suggestion? I hope not...

I think we all need to encourage our CM's to support this new bill and make sure if 421a is not to expire that the COMMUNITY gets something back, and not just the developers.

Posted by: lostinbrooklyn at November 30, 2006 11:22 AM

I'm a buyer, not a developer. The 421-a will help keep a little more money in my pockets every month... because I am by no means 'rich'. I am not opposed to the requirement for including affordable housing. In fact, I think that's a great proposal. However, if a building has already been marketed as being eligible for the subsidy and it's too late to include affordable housing... the building should not be subjected to the new law (if passed). Anyone know if that will be the case?

Posted by: Anonymous at November 30, 2006 11:34 AM

Wouldn't it be great if the city bought up a certain percentage of the apartments on 5th Avenue as they became vacant and turned them into lower-cost units? Why are new buyers of property in NYC being asked to unfairly shoulder the burden (and, yes, it is a burden) of providing low-income housing to New York's poor? I say spread the wealth (pun intended).

Posted by: Anonymous at November 30, 2006 1:20 PM

Under the new law all units would go into the rent regulation system. This law would only apply to new construction that takes place after it is passed, no retro activity.

It would be citywide and for households with 50% AMI. The mayor and the speakers bill will continue 421a as is, luxury housing.

Posted by: Anonymous at November 30, 2006 3:34 PM

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