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Affordable housing production at risk with loss of tax abatement program – QNS.com

Affordable housing production at risk with loss of tax abatement program

By Bill Parry

The de Blasio administration’s ambitious Housing New York plan, which has already financed more than 40,000 affordable apartments enough for more than 100,000 New Yorkers, may have hit a wall with the expiration of the state’s 421-a tax abatement program last Friday.

Negotiations between the Real Estate Board of New York and the Building and Construction Trades Council of Greater New York failed to bring about an extension of the program because it would not be beneficial enough to labor and a “giveaway” to developers, according to Gov. Andrew Cuomo.

The 421-a program provides vital tax abatements to residential developers by eliminating property taxes in exchange for a higher number of below-market-rate apartments. According to a city analysis, ending the program will result in the loss of 18,000 newly built affordable rental units over the next four years.

“Last spring, we proposed important 421-a reforms that would spur the construction of sorely needed affordable rental housing, eliminate tax breaks for luxury housing and drastically reduce the city’s subsidy,” Mayor Bill de Blasio said. “The proposed reforms were a win-win for families in need of stable homes and for taxpayers. It is deeply disappointing that these reforms were not enacted. We are facing an unprecedented crisis of affordable housing, and we must employ every tool at our disposal to confront it.”

It is still possible that the Real Estate Board of New York and the Building and Construction Trades Council of New York may reach an agreement in the future. The program had expired in June, but after further negotiations an extension was reached nine days later.

“We remain ready to engage with all stakeholders in the weeks and months ahead to achieve our goals of creating needed affordable housing and middle-class jobs for New Yorkers,” Gary La Barbera, president of the Building and Construction Trades Council of New York, said.

The Real Estate Board of New York said introducing a prevailing wage for construction workers would result in greater government spending to cover wages and benefits.

“Without a program like 421-a, one can’t build multi-family rental housing with a significant below-market, or affordable, component on a scale necessary to address the City’s needs,” RBNY President John H. Banks, III said.

Meanwhile, de Blasio, who admitted to being “a little obsessed with affordable housing” during the Hallets Point ground breaking last week, vowed his administration would push hard for action in Albany in the coming days.

“In the short-term, in 2016, we’re quite confident in our ability to continue to produce housing at essentially the same clip,” de Blasio said Monday. “But, going forward, we do have to address this issue. Albany has a chance to make real reform to take a program that was unfair to taxpayers, that wasn’t producing enough affordable housing, and fix it. That’s certainly what we’re going to fight for.”

During an appearance at a Martin Luther King Day event Monday, Cuomo said that he and de Blasio would “have to find a way” to stimulate creation of affordable housing.

“Right now, we have no affordable housing program that’s operating in the City of New York, and that is a major concern for the mayor and myself,” Cuomo said.

Reach reporter Bill Parry by e-mail at bparry@cnglocal.com or by phone at (718) 260–4538.

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