Mayor Bill de Blasio’s proposed reforms to the 421a tax abatement would increase the program’s cost by about $2.8 billion, administration officials told City Council members Monday.
The de Blasio administration’s proposal would lengthen the abatement period to 35 years while also expanding affordable housing requirements for developers. The total cost of the program would increase to $9.9 billion over a 45-year life cycle, according to deputy mayor Alicia Glen.
The reforms are projected to subsidize the creation of 25,500 affordable units over the next decade, according to Capital New York, compared to just 12,400 units under an extension of the current 421a program. An extension of the current abatement would cost the city $7.1 billion over a 45-year cycle.
Glen noted that the Mayor’s proposal would make the program more efficient and reduce the program’s “cost per affordable unit” from an average of $573,00 to $391,000.
Glen added that the additional cost would be largely offset by up to $200 million in annual revenues from de Blasio’s proposed “mansion tax,” which would add a 1 percent tax to home sales over $1.75 million. [Capital New York] – Rey Mashayekhi