Amid new efforts to revive a massive tax break for housing developers, some advocacy groups say it should stay dead.
Housing activists slammed the push to bring back the expired 421-a program, which is controlled by Albany and the de Blasio administration says is needed to spur rental construction and increase affordable housing.
“421-a is a major giveaway to luxury developers, and it’s not an effective affordable housing program” said Katie Goldstein, senior organizer at Tenants & Neighbors. “We’re happy that 421-a died, and we hope that it continues to stay dead.”
The decades-old tax break program expired last January, in a dispute over whether developers should be required to pay their workers union-level prevailing wages. Negotiations between the Cuomo administration and real estate and labor leaders to bring it back have been stop-and-go ever since.
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In one plan now being discussed, the life of the tax break could be extended to as long as 45 years, up from 25 in the previous version, and wage requirements could be added, according to a Politico report.
That could balloon the tax break’s cost to as much as $3 billion a year, up from $1 billion, according to estimates by groups in the Alliance for Tenant Power, which opposes the program.
Deputy Mayor Alicia Glen said late last month that while the administration’s affordable housing plan remains on track, the death of the program is taking its toll. “It’s nearly impossible to finance rental construction in New York City without a tax benefit, and our housing market simply leans too heavily on condo as it is,” she said at a New York Building Congress breakfast.
An analysis last week by NYU’s Furman Center found building permits had rebounded to the levels they were at before the tumult over the tax break — with 5,256 housing units authorized for new construction in the third quarter of 2016, a growth of 49% over the previous quarter.
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That report, however, did not break down how many of the new units were rentals and how many were condos. The city argues the absence of the tax break is spurring developers to choose condos over much-needed rental apartments.
“We have been arguing all along that 421a is just a huge waste of taxpayers money,” said Delsenia Glover, campaign manager of the Alliance for Tenant Power.
“What is outrageous is the fact that Ms. Glen continues the lobbying for a tax incentive that only benefits wealthy developers and (her former employer) the Goldman Sachs ‘urban investment’ program and not New York City tenants and we'll still be paying for 2017's housing in 2062 if this goes through.”
De Blasio spokeswoman Melissa Grace said changes the mayor pushed through to the program, before it expired, would mark a great improvement over the old version.
"This administration fought to reshape the law, and succeeded in ending the old program's giveaways to luxury condos. We need this reform legislation to spur the construction of affordable housing and rental apartments across New York City that people need,” she said.
But opponents argue the city could get more bang for its buck with a more narrowly tailored subsidy. “The cost is so dramatically out of line with the benefit,” said Thomas Waters of the Community Service Society.
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