A very important hearing was held yesterday morning at City Hall. And bear with us, because there’s a lot of complicated stuff going on here, but you will feel way, way more informed about the current state of affordable housing in this city if you take a deep breath and listen up for this twisted tale. The City Council’s Committee on Housing and Buildings met for a hearing regarding a lil’ old tax exemption called 421a. Sound familiar? Probably not unless you’re a real estate dork, local politician, billionaire developer, or affordable housing activist.
But 421a is something every New Yorker should understand, because it’s a program that in 2014 alone ate up $1 billion in foregone tax revenue. Yep: $1 billion. That’s the city’s largest tax cash cow when it comes to housing. What’s more, critics of the tax incentive program say that luxury condo developers are seeing undue benefits from a program that’s functioned under the guise of an incentive for developers to build affordable housing.
The program has generally been approved and re-approved in the past, but on June 14th of this year 421a is set to expire and there’s a chance that representatives in Albany won’t vote for its renewal. The change could have enormous consequences for the real estate market, and some say it could even threaten affordable housing development, but as Council Member Jumaane Williams said on Thursday: “The way that it exists now is a debacle.”
