421-a Revamp: A Lose-Lose Proposition?
The new regulations for the 421-a tax-abatement program, which long offered developers a tax break in exchange for building affordable housing in certain parts of the city, are set to go into effect at the end of June. The bulk of reporting on the subject has focused on the fact that the program’s new rules…
The new regulations for the 421-a tax-abatement program, which long offered developers a tax break in exchange for building affordable housing in certain parts of the city, are set to go into effect at the end of June. The bulk of reporting on the subject has focused on the fact that the program’s new rules will mean developers can’t receive abatements in many neighborhoods they used to, including large swaths of Brooklyn. According to a story in today’s Times, however, changes to 421-a will also mark the end of its “negotiable certificate” program, whereby affordable housing builders could transfer or sell off the abatements they received for building affordable units to another developer who was building market-rate housing at a completely different project. The certificate transfers thus generated revenue for affordable builders and gave market-rate developers tax-abatements they could offer to their building’s buyers. A spokesperson for HPD says very few affordable developers used the transfer program, though developer Gary Barnett of Extell Development Corp., for example, says the change will mean there will definitely be a slowdown in affordable development, and development in general, in the city. Carol Lamberg, executive director of the Settlement Housing Fund, a nonprofit group that has built low-income homes in New York since 1969, says that while the certificate transfer program favored affordable developers who were well capitalized, its sunsetting is still a blow for the larger affordable housing development community. It’s one less tool, and we need every tool we can get, she says.
Developer of Affordable Housing Faces New Challenge [NY Times]
421-a Compromise Reached; AY Carve-Out Reduced [Brownstoner]
Downtown Boosters Wary of Credit Crunch, 421-a Revamp [Brownstoner]
Totally cutting out program an unmitigated long-term knee jerk disaster for affordable and unaffordable housing.
Good news – will kill much development in city, bringing down inventory. Will also cause shortage in 2-5 years, helping raise prices again.
Taxes so high in city. Program rules ought to have been changed to faster fade-out, partial abatement or some such thing, not total fadeout. Govt. and R.e. don’t mix well.
There will be less affordable in city as a result.
I spent 9 years doing 1000 affordable units for City and a NPO in BK, 10 years selling apartments in BK and Manhattan and how do commercial.
Wow you quoted the NY Sun. Everybody go home.
That is your research and basis for your specific ‘I have yet to see it work well in Brooklyn’ comment?
If you where in your junior year HS – I would fail you.
2:40
Understood. But as I said, that still remains to be seen. 10 years is a long time. The city already started a program to replace 421-a. God knows what else can come up between now and 2018.
NY Sun, May 8, 2008
Last Chance at 421-a Credits Could Spur Condo Market
By CANDACE TAYLOR
Excerpt:
“While some developers bemoan the end of the certificates, the city claims it wasn’t an efficient way to generate housing for poorer New Yorkers, as it leveraged only 15% to 20% of the value of the tax benefit for subsidized developments, a spokesman for the Department of Housing Preservation and Development, Neill Coleman, said. “Eliminating the certificates will lead to a greater mix of affordable and market-rate units citywide, and the production of more affordable housing in high-price neighborhoods,” he said.”
And that’s from City and HPD.
Need I demonstrait more? Wait, I guess I should STFU.
I think 11:50 was taking a longer term view and saying that, as project that have been built over the past 10 years begin to have their abatements expire over the next 10 years or so, the City will reap the additional tax collection.
BTW –
11:50 you are also wrong. All current abatement stands (10 or 25 year). Only developments are affected. And that remains to be seen if there is a slow down in both affordable and market priced development.
You are still wrong Action.
You declare it not working in Brooklyn how? Do you have statistics? Do you have low cost developers telling you not working? What does developers selling 421-a certificates say about it. Do you have anything other than your keyboard?
the only thing you are doing is putting your .02 in where it does not matter. So in return I put my .02 – STFU already! But mine lack pretentiousness.
The anonymity, lack of evidence and simplification of a complex topic makes blog sites worthless of any serious discussion. All it does it gives random people place to vent – no matter how nonsensical their comments are.
“Action Jackson – so you admit that 421a was an effective tool for affordable housing, just that it wasn’t working in Brooklyn? Then we agree.”
I have yet to see it work well in Brooklyn and that is the only exposure I have to it. I’ll take other’s leads for the other boroughs. The redraw, in my POV, will do little to encourage the new use. If anything, it will discourage the abuse of the current 421-a with the new rewrite of the tax abatement.
So, I guess we can half agree then…
Again, Mr. STFU (can I call you that), I would disagree that logical and well thought debates to occur on blogs such as this (hell, the major news outlets sight brownstoner often…perhaps you don’t read?). Of course the blogs do also have trolls like yourself.
So much for witty repartee.
Oh – and you can thank Vito Lopez for destroying a good program by pushing the reform too far…
10:54 here. 11:45 is exactly right. The problem with 421a was that the “exclusion zones” really only included manhattan south of 96th Street. So it was silly to have Dumbo, Brooklyn Heights and Park Slope not included. What was needed in order to reform 421a was simply to redraw the boundaries to include the high-rent neighborhoods of Brooklyn. However, the reform that was passed went way beyond that. The exclusion zone was expanded to include huge sections of Brooklyn that are clearly not “high rent” also, the whole third portion of the program I listed above (buying certificates from affordable housing developers) was effectively killed. The reform went way too far and killed a program that on the whole was an effective tool to get affordable housing built and bring new market rate development to “pioneering” neighborhoods.
Action Jackson – so you admit that 421a was an effective tool for affordable housing, just that it wasn’t working in Brooklyn? Then we agree.