CrainsNewYork reports that Real estate groups praised an affordable-housing bill from Assemblyman Keith Wright, but clarified Thursday they do not believe it can replace 421-a, a controversial property-tax break for developers that expired last year.
“While Chairman Wright’s proposal is laudable, it is not a replacement for 421-a,” a spokesman for the Real Estate Board of New York said in a statement. “[Wright’s proposal] would not provide the amount of affordable housing across different income bands and throughout the five boroughs that the new 421-a program will.”
The lawmaker, who is chair of the Assembly’s Housing Committee, proposed spending $200 million a year on what he called a multipronged housing program. It would provide eligible affordable-housing projects with up to $100,000 capital subsidy for every unit. The Emergency Affordable Housing Construction Act would also dedicate $50 million to funding senior housing and job training programs. In a statement, Wright suggested his legislation would replace 421-a, which gave a property-tax break to developers for up to 25 years and was originally designed decades ago to encourage construction when few wanted to invest in New York City.
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New York City developers do not need to be lured to Times Square or Harlem to invest and build apartment buildings that largely cater to residents of greater means rather than the average New Yorker
“We are no longer grappling with a state on an economic downturn,” Wright said in a statement. “New York City developers do not need to be lured to Times Square or Harlem to invest and build apartment buildings that largely cater to residents of greater means rather than the average New Yorker.”
His office later clarified that the legislation was never meant to take the place of the program.
“It was not designed to replace or replicate a previous tool,” a spokeswoman said. “It is an entirely different approach to create affordable housing.”
The Furman Center for Real Estate and Urban Policy issued a report last year showing that in many areas of the city, the tax exemption is needed to make new rental projects financially feasible. That is why the de Blasio administration crafted a revised version of the policy that would have required developers to build affordable-housing units in exchange for receiving the benefit.
Gov. Andrew Cuomo later inserted a stipulation that required REBNY and a construction union umbrella group, the Building and Construction Trades Council of Greater New York, to come to an agreement over the new program’s parameters. They did not, and as a result developers rushed to get their projects into the ground before 421-a expired on Jan. 1. And since then, developers have delayed projects in the hopes that a replacement exemption will be written.
Other groups, such as the the New York State Association for Affordable Housing, which represents for-profit affordable-housing builders, praised Wright’s efforts but fell short of endorsing the plan. That group, too, did not consider the legislation a substitute for the tax exemption.
The trades council, which was part of a 421-a-themed panel that was convened by Wright before the bill was drafted, is still on the fence.
“We are currently reviewing the legislation proposed by Assemblyman Wright and have not yet announced our position,” a spokesman said in a statement. “However, at this time, we cannot formally support it.”