Controversial 421-a Program May Get Extended
In a surprise move, the Bloomberg administration is expected to push for another four-year extension of the controversial 421-a tax break program, albeit with some modifications. The program, which has resulted in the city leaving an estimated $400 million in taxes on the table, was started in 1971 when you couldn’t give an empty lot…
In a surprise move, the Bloomberg administration is expected to push for another four-year extension of the controversial 421-a tax break program, albeit with some modifications. The program, which has resulted in the city leaving an estimated $400 million in taxes on the table, was started in 1971 when you couldn’t give an empty lot away in this town. The benefit to developers and their customers derives from the fact that real estate taxes for the next 10 to 25 years are calculated on the value of the property before being developed. In recent years, the incentives have gone to help developers put up luxury housing in Manhattan and Brooklyn (like Richard Meier’s Perry Street towers above). The extension is not a done deal, however, as the approval of the Office of Management and Budget is still required and the word is that it is leaning towards eliminating the program in favor of a dedicated affordable housing fund.
City Panel Expected to Back Property Tax Break [Crain’s]
Mayor Facs Battle over Breaks for Developers [NY Observer]
Photo by archidose
I’m glad to see Brownstoner making this thoguhtful and informed post about 421-A.
I haven’t forgotten Brownstoner’s less thoughtful reaction when ACRON picketed the Adams Street Bldg in DUMBO (as a symbol of how such real estate tax breaks are serving the wealthy and developers).
At that time, his attitude was a little less thoughtful about such corporate welfare. Granted, ACORN is easy to (somewhat justifiably) mock, but they were calling attention to this very waste of taxpayer funds.
Whoops, should have been “whose”, not “who’s”. One of these days I will learn to proof before posting.
Back to say that, ideally, I believe these incentives to build middle income housing should be encouraged for building not just in the outer parts of the outer boroughs. Why can’t there be at least middle class development all across the city, in all parts of all of the boroughs? New York will be a lot less liveable if most of Manhattan becomes a gilded ghetto surrounded by the rest of us in rings of decending income levels out to the hills or to the sea.
You are correct, Brownstoneliving, it is insane. New tax monies for parks would certainly be great, but if NYC doesn’t promote the building of affordable housing for middle and lower income folks, tax paying citizens, you’ll be seeing them camping out in those parks.
Recent articles appearing only in the last couple of days state that the luxury housing glut is forcing prices down in those markets, and even causing some buildings to go to rentals, and for some buildings to halt construction. While that is great for people who can afford luxury living, it does nothing for everyone else. In spite of this, new luxury buildings are still going up like there is no tomorrow. My question of where are all of these wealthy people to fill all of these buildings has finally been answered – they don’t exist anywhere but in the minds of developers. Some may argue that this will mean that these luxury buildings will go to the middle class, but I find that hard to believe. If you build for CEO’s, you are not going to settle for secretaries. One only has to look at Stuy Town/Peter Cooper Village to see that the middle class is being forced out of this city. To say nothing of those people who’s incomes are below middle class.
The tax abatement program should be replaced by a program dedicating incentive funds for affordable housing, so that the average Joes and Janes who are the life blood of this city can continue to live in it, and have an opportunity to get a piece of the rock. This is not middle class welfare, or a handout, it is a prudent investment in New York City’s future.
Who do we write to in order to stop this insanity? Developers hardly need insentives any more. If we had that extra tax money, we could take better care of our city parks, something that we could all benefit from.