“The 421-a tax abatement program was originally established to help spur development in New York City when it was struggling financially in the 1970s. However, now we are experiencing a housing boom and we need to make sure that new construction includes affordable units for the hard working middle class residents of our city,” Senator Dilan said.
“This is an important step toward not only creating new affordable housing options for residents, but also to preserve the integrity of the communities in which these new buildings are constructed. For too long developers have been receiving the tax benefits and then building the affordable units off-site. I am pleased this legislation holds developers accountable to the communities in which they are constructing these buildings,” Senator Dilan said.
One final and important provision of the bill is that it creates an affordable housing fund of at least $400 million. According to the sponsor’s memo on the bill, New York City would receive this revenue as a result of the proposed changes to the existing property tax exemptions. All this new revenue will be placed into a dedicated New York City trust fund to be used only for the purpose of funding affordable housing programs. The programs will target the fifteen poorest community districts in New York City. This trust fund will act as a supplement to the existing affordable housing programs in the city rather than replace any existing programs.