The Real Deal New York

De Blasio concerned that Albany will try to add larger condos back into 421a

Some lawmakers have been pushing for an expansion

Bill de Blasio (Credit: Getty Images)

Mayor Bill de Blasio on Tuesday said he’s concerned about negotiations surrounding the revival of 421a, specifically that lawmakers might make a play to add larger condo projects back into the program.

“We all can agree that this has been one of the great moving targets over the last few years,” he said during his presentation of the city’s preliminary budget for fiscal year 2018. “No one knows where it’s going.”

Last week, Gov. Andrew Cuomo proposed the latest iteration of 421a, rebranded as“Affordable New York.” The proposal closely mirrored the legislation signed in June 2015, with the addition of modifications agreed to by the Real Estate Board of New York and the Building and Construction Trades Council in November 2016. Cuomo said last week that the new program would create 2,500 units of new affordable housing per year.

The latest proposal, like the one in June, allows certain small condo projects outside Manhattan to qualify for the tax abatement. However, in December, Brooklyn Senators Marty Golden and Simcha Felder said they would push for larger condos to be included in the program. A spokesperson for the mayor told The Real Deal on Tuesday that de Blasio was referring to their efforts and additional chatter in Albany. The concern is that lawmakers — specifically Senate Republicans — might try to expand the program to other condo projects before reviving the tax abatement.

Representatives for Felder declined to comment on Tuesday.

“The governor’s proposal does not include expanding the program to include condominiums, and as he has said publicly, would not support a plan that does,” said Dani Lever, a spokesperson for the governor.

De Blasio noted that the tax abatement’s revival seemed closer than ever, but he was concerned by the uncertainty of the costs that could be added to the city if more condo projects become eligible for the program.

The mayor — whose own proposal in 2015 excluded condos from 421a — also noted that real estate transactions dropped 15 percent in the first half of fiscal year 2017, compared to the same time the year prior. The number of approved residential construction permits plunged dramatically in 2016, dropping 70 percent from 2015, when 421a was in effect.

In December, The Real Deal and ProPublica published a detailed analysis of how the industry bankrolls state legislators who are sympathetic to 421a.

Will Parker contributed reporting.