Governor Cuomo recently announced that his revised version of the city’s 421-a tax exemption program would officially be moving forward. He said the initiative, dubbed “Affordable New York,” would create 2,500 new affordable housing units per year, but a new study from the city’s Department of Housing Preservation and Development says this will come at a cost. As Politico reports, Cuomo’s changes to the program would cost NYC an additional $820 million over 10 years if approved by the state Legislature, $82 million a year more than Mayor de Blasio’s proposed 421-a overhaul in 2015.
As 6sqft previously reported, the major provisions of Affordable New York are that rental buildings with 300 or more units–in Manhattan south of 96th Street and in Brooklyn and Queens’ Community Boards 1 and 2 one mile from the East River–that reserve at least 20 percent of units as affordable for 40 years will be eligible for tax credits for 35 years. This is up from 421-a’s 35-year requirement and 25-year tax break. Additionally, construction workers on these projects must receive an average rate of $60/hour in Manhattan and $45 in Brooklyn and Queens.
The de Blasio administration didn’t provide a cost estimate for the entire 421-a revision, but the Department of Finance estimates that in Fiscal Year 2016, the tax break cost the city $1.2 billion in foregone revenue. The Mayor wouldn’t provide a comment on the new estimate, but Cuomo spokeswoman Dani Lever pointed to the legislation that de Blasio previously supported: “In 2015, the mayor proposed amendments to 421-a that made the program far more expensive overall, but stood to create more units of affordable housing. The governor’s proposal provides more affordability for tenants and fairer wages for workers, but keeps the cost of the program from the original 2015 law largely intact. Any expenses in exchange for making sure that all New Yorkers have a safe and decent place to call home are minimal, 26 years out, and worth it.”
- Cuomo dubs revised 421-a plan ‘Affordable New York,’ advances new legislation
- Cuomo’s revised 421-a plan will move ahead as REBNY and construction trades come to agreement
- Is the end of the 421-a tax abatement program ‘a self-created recession’?
- All 421-a coverage