Keith Wright, Chairman of the Assembly’s Housing Committee, says he’s offered the first major proposal to replace the expired 421a tax abatement program.
His bill would radically alter the program’s former structure, funding affordable housing through direct developer subsidies of up to $100,000 per unit from the city budget, rather than a 25-year tax property tax break.
Wright estimates the reconstituted program would cost as little as $200 million per year, compared to $1 billion a year in lost tax revenues under the old system, New York Daily News reported.
“It’s a win-win,” the Assembly Democrat told the Daily News. “It’s filling the void that’s been created by the lack of 421-a and we’re taking a different philosophical slant.”
The administration of Mayor Bill de Blasio had no part in creating the proposal, according to the Daily News. A representative for the Real Estate Board of New York told The Real Deal that the proposal is not an actual replacement for 421a. A representative for the Building & Construction Trades Council said the group is reviewing the proposed legislation and does not yet formally support the subsidy program. A spokesperson for the New York State Association for Affordable Housing said the while the group supports the concept behind the proposal, it hasn’t formally endorsed the bill and doesn’t view it as a replacement for 421a.
The 421a tax abatement expired in January after negotiations over prevailing wage requirements between REBNY and the constructions unions broke down. It’s impending end inspired a wave of building permit filings by developers hoping to take advantage of the program before it disappeared. [NYDN] – Ariel Stulberg
Correction: An earlier version of this story misstated the position of REBNY, the Building & Construction Trades Council and the New York State Association for Affordable Housing due to an error in the source article.
The headline was amended to clarify that it was Assemblymember Wright who characterized the proposal as a replacement for 421a.