Conflicting Calls for 421-a Revisions

NEW YORK CITY— Affordable Housing and Local Jobs Now—a new coalition including The Real Estate Board of New York— is set to launch a multi-million dollar campaign to gain approval for a revised 421-a tax abatement program. The revision will call for the creation of tens of thousands of more new affordable housing units throughout New York City as well as creating jobs for residents. The coalition also includes the New York State Association for Affordable Housing, Community Preservation Corp. and the NAACP. 

 This proposal is in opposition of other effort wanting to impose prevailing wages on these projects; AHLJL calls this “deceptive.” This would also stop builders from hiring local workers and drastically cut the number of new affordable housing units that would be built, according to a statement from AHLJN.

The campaign put fourth by AFNJN will feature television commercials on New York City and Albany broadcast and cable stations as well as radio and paid digital advertising, according to a statement.

Since it's establishment, 421-a has lead to over 70,000 affordable housing units to be built, but with the current housing crisis, it is estimated that 80,000 more units are needed in NYC alone.

The 421-a tax abatement plan, which was put into place in 1971, is set to expire next month. The plan was created after residential construction dropped in the city due to many residents moving to the suburbs, resulting in the city granting tax breaks to any newly constructed housing complexes.

In the 1980s, according to a document consolidated by the Pratt Center for Community Development, the plan was revised as housing began to rebound, leading to the creation of the “exclusion zone” in Manhattan. This said that between 14^th and 96^th st. the only way developers would be eligible for the tax exemption would be if they constructed affordable housing units.

Access to these tax exemptions are not restricted to just these areas, contractors are gaining access to this plan who were not committed to creating affordable housing.  

This is where opposing coalition, Up4NYC, sees the largest issues. A statement from the group's website says: “The policy has a become tool for tax breaks for wealthy developers, who in turn often refuse to pay their workers, the ones actually building the housing, a good wage. Furthermore, many developers are not required to build affordable housing within the developments. So, while the rich are getting tax breaks, the hard working men and women constructing the buildings are not able to live anywhere near them.”

Affordable Housing and Local Jobs Now says this wage mandate would create a 30% increase in construction costs, which makes housing projects too costly, leading to either a decrease of new affordable units or an average rent increase of units by $400 per month.

Jolie Milstein, the president of New York State Association for Affordable Housing, says, “421-a is the only tax abatement available as-of-right for mixed-income affordable housing. Adding a prevailing wage requirement to a continuation of 421-a would make it more difficult for local workers to access job opportunities on these sites and inhibit the development of more affordable housing units.”

A recent editorial from the New York Times deemed that 421-a should be scrapped entirely, and not be renewed. The current program is set to expire June 15, and will have to be voted on by the New York State Legislature to determine if the program will continue and by what terms.