Tenant advocates: Time to ditch 421-a tax break

Developers use the program, set to expire in June, when constructing new buildings

New York /
Jan.January 23, 2015 08:10 AM

Tenant advocates are planning to fight to put an end to a tax abatement program that is widely used by the city’s developers.

The 421-a program, which is set to expire in June, provides tax breaks for developers who provide affordable housing as part of their newly constructed buildings. Mayor Bill de Blasio, who is planning to add and preserve a total of 200,000 affordable units in the city over ten years, has used the tax breaks as an incentive to get developers to create affordable housing.

Tenant groups, however, are saying that the program is an inefficient way to create affordable housing, according to Capital New York. They also say that while the program was effective in boosting the number of  non-market-rate units when it was created in the 1970s, today it mostly functions as a perk for wealthy developers who are creating housing for even wealthier residents.

The advocacy groups contend that the potential tax revenues that are waived through these abatements — roughly $1 billion a year — should be spent on direct subsidies such as Section 8 vouchers, according to the website.

A handful of tenant groups have organized themselves into two coalitions: the Alliance for Tenant Power and Real Affordability for All, according to the website. They are planning a rally for Tuesday. [Capital NY] — Claire Moses


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