With 421a dead, all eyes turn to Albany

From the March issue: In the months leading up to a state-imposed negotiations deadline in January, the Real Estate Board of New York and union leaders came tantalizingly close to coming up with a deal to renew 421a, the controversial tax abatement program for new developments.

The compromise, according to sources familiar with the talks, would have extended 421a to condominiums, which had been cut out of the most recent proposal. It would have also assured that workers were paid prevailing wages on such projects. But it was no secret that Gov. Andrew Cuomo had been strongly against a deal including condos in the program following public outrage over the 421a inclusion of luxury condos like One57.

Ultimately, the talks broke down.

“The affordable housing program that we hoped would pass did not pass. Right now, we have no affordable housing program operating in the City of New York,” said Cuomo in the days following the expiration of the program.

Now, 421a — or whatever may replace it — is back in Albany and the governor’s hand. But depending on who you ask, it’s been there the whole time. The ultimatum handed down by Cuomo and the legislature on the prevailing wage issue in June 2015 — which put developers and construction unions in the position of having to agree on an extremely contentious issue — has been painted by some observers as doomed from the start. [more]