Other developers have been more succinct in their assessment.
âIf you want to slow housing construction in the most efficient way, you end up on 421-a,â said Radame Perez, managing director of Mastermind, a Bronx real estate development company. “This is the best way to end, or at least prevent new housing construction in New York.”
Progressive candidates Scott Stringer and Maya Wiley have promoted ambitious affordable housing policies that target benefits for developers and homeowners. Stringer, who has pledged to end âunnecessary tax giveawaysâ to private developers, has declared his desire to eliminate the long-standing 421-a property tax exemption, which is due to be extended next year. It also said it will require every new development to reserve at least 25% of its units for affordable housing.
Wiley said she would get rid of 421-a, which she said has “accelerated gentrification and housing segregation” throughout the city and contributed to economic inequality.
“We cannot repeat the mistakes of the past and give taxpayer money and public land to developers who stimulate real estate speculation, raise prices, increase racial segregation and contribute to the feeling that the city is affordable only for the rich, âits housing platform said.
Developers of luxury housing are seen by progressives as disproportionately benefiting from the allowance. But ending 421-a would also cut a path to both capital and construction for developers specializing in affordable housing.
“It’s a death knell,” said Edward Poteat, founder and president of Carthage Advisors. âYou are eliminating development, potentially. Our tax rate in the city is so high that without [421-a] a lot of residential development wouldn’t happen at all.
The 421-a abatement first appeared in 1971 to stimulate multi-family development in a recessionary New York City that has experienced urban leakage. There have been changes to the abatement over the decades, and it was even allowed to expire several times before being revived.
In today’s iteration, known as Affordable New York, the developer tax breaks occur for three years of construction, require 30% affordable housing, and can extend up to 35 years after. the completion of a project, decreasing over time until all units disappear. for the market rate. The benefits of the tax exemption vary, although they are usually based on the land use, location and number of affordable housing included.
The opposition to 421-It appears to be part of a recent explosion of anti-development sentiment on the part of some of the city’s Democratic leaders and the party’s progressive electoral base. From Industry City in Brooklyn to Amazon’s headquarters in Queens – and now a redevelopment of a $ 750 million blood center on the Upper East Side – Democrats and activists have thwarted ambitious development plans , raising questions about how a party can build more housing when it doesn’t. seem to want to build at all.
âThe same neighborhoods that say they want affordability reject affordable housing development,â said Rachel Fee, executive director of the New York Housing Conference. âWe need leadership at town hall to get communities to support a housing plan and get consensus from the bottom up. “