With just two days left before Friday’s deadline, negotiations between developers’ representatives and the city’s construction unions over the future of the 421a tax abatement appear to be breaking down.
The development subsidy program, which allowed a total abatement of $1.1 billion in 2015, will lapse if the two sides fail to make a deal.
“It ain’t happening,” a source told Politico.
Earlier reports suggested a possible compromise: Developers represented by the Real Estate Board of New York would get an expansion of the new 421a program to condominium projects, while labor units under the Building and Construction Trades Council of Greater New York would get a promise that those developments would pay prevailing wages to workers.
But that deal now looks unlikely, Politico reported, citing sources blaming a handful of individual unions and others blaming Gov. Cuomo, who pushed the negotiations in the first place.
“We remain committed to working with stakeholders for a program that will allow much more affordable, or below-market rental housing to be built, ensure construction workers are treated fairly and create job opportunities for residents of New York City,” REBNY’s John Banks wrote to Politico in an email.
A Cuomo spokesperson, Dani Lever, argued there’s still time to come to an agreement.
“The negotiations regarding 421a are between REBNY and the Building Trades and the deadline is Friday, not tomorrow,” Lever said in an email.
The abatement program’s expiration could hinder new rental development in the city, one developer told Politico.
“With the average for-sale residence reportedly over $1 million and rental development not viable without 421a, its lapse is a huge loss for all New Yorkers,” Lever wrote to Politico. “With a city of which two-thirds are renters and a population [that] continues to grow, there will be more price pressure on all. It’s a blow to affordable housing and available sites will certainly be dominated by condominium developments.”