Senate Minority Proposes Overhaul Of 421-a Affordable Housing Program

 

June 30, 2007.

OtherMembers of the Minority Confernecewho are advocating for this package include Minority Leader Malcolm Smith, Senators Liz Krueger, Marty Connor, Efrain Gonzalez, Bill Perkins, Eric Adams, John Sampson, Jose M. Serrano, John Sabini, Diane Savino, Eric Schneiderman, and Velmanette Montgomery.

Senator José M. Serrano (D-Manhattan/Bronx).

In preparation for the impending expiration of 421-a, Mayor Bloomberg and the New York City Council passed legislation calling upon the State to continue the program with changes to the exclusion zone, elimination of the negotiable certificate program, a requirement that all affordable housing to be built on-site, and creating a $400 million affordable housing fund. The Mayor and City Council recommendations are excellent, but the Senate Democrats feel even more should and can be done to improve this program.

  • Solaria (Lifetime tax break of $6,975,475)

65 market-rate condos; $720,000 - $2 million

  • Oceana Condominium & Club (Lifetime tax break of $87,007,700)

850 units; $620,000 - $2 million

  • Riverwalk Place (Lifetime tax break of $24,682,450)

230 market-rate condos; $750,000 - $1.3 million

  • 44-27 Purves Street (Lifetime tax break of $9,405,000)

57 market-rate condos; $440,000 - $1.3 million

  • 130 Bay Street Landing (Lifetime tax breaks of $8,300,000)

101 market-rate condos; average $500,000

These examples illustrate the continued limitations of the City’s proposed 421-a changes.

The SenateMinority Conferenceproposes that:

1.) Developers throughout New York City only receive a 421-a property tax break if they include at least 30% of total units as affordable housing for low- and moderate-income families;

2.) “Affordable” be defined as families that earn no more than 80% of the median household income for the City of New York (approximately $35,000 for a household of 4);

3.) Preference for 50% of affordable units should go to existing residents within the local Community Board;

4.) The program should require that all affordable units be on-site, as part of the market-rate development, in order to create mixed-income communities;

5.) The affordable units should be made permanently affordable to prevent a future crisis when restrictions expire;

6.) Owners in buildings receiving property tax exemptions should be required to pay prevailing wages to their building service workers. New York City should not subsidize the payment of substandard wages to building service workers;

7.) The additional tax revenue generated from these changes should be placed in a dedicated New York City trust fund for affordable housing targeted at the 15 poorest community districts in the city.

The New York State Legislature must decide whether to extend Section 421-a, and if so, what changes should be implemented prior to June 30th, or the law will sunset at the end of the year.