Homeless hotel owners who save millions of dollars through city tax rebates should no longer be entitled to the lucrative benefit, city lawmakers said Tuesday.
The Industrial and Commercial Abatement Program, or ICAP, rebate has saved homeless hotel operators $30 million over the last four years and $12.5 million during the last tax cycle, city records show.
Meanwhile, owners are also raking in big bucks to provide emergency shelter to homeless people in their hotels. In 2018 alone, $384 million went from city coffers to housing homeless people in hotels. City officials declined to say how much they project the city will spend in 2020.
“As I’ve long said, homeless New Yorkers don’t belong in hotels, they need housing," city Comptroller Scott Stringer said. "We need to end this expensive, senseless practice as quickly as possible and focus our resources on actually building the long-term affordable housing New Yorkers need.”
Stringer began calling ICAP into question last year during the debate over Amazon possibly bringing a second headquarters to Queens.
The fact that the online retailer would have been eligible for up to $400 million in ICAP and other property tax incentives prompted officials like him and others to publicly call for a re-evaluation of ICAP.
The program is projected to award more than $300 million in rebates in fiscal year 2020, said George Sweeting, deputy director of the city’s Independent Budget Office.
Council Speaker Corey Johnson said the program is being examined as part of what he described as the Council’s economic development tax expenditure evaluation process.
“I have serious concerns about these state tax breaks," he said. “It’s important that these programs benefit the people of the city, and not just the recipients of the tax break, and I am not convinced that’s what’s happening right now.”
Fellow Council member Ritchie Torres singled out one hotel developer and owner, Sam Chang, in particular. Chang has come under fire from workers for firing them after they voted to join a union. His Holiday Inn JFK saved $791,323 in taxes through ICAP during the last tax cycle, records show.
“It’s an outrage that there are bottom feeders who are essentially robbing New York City taxpayers of precious dollars that should be used for homeless housing and essential services,” Torres (D-Bronx) said. “New York City has no business subsidizing a profiteering, union-busting unscrupulous actor like Sam Chang.”
Chang did not immediately respond.
While ICAP is a city tax break, rolling it back or altering it would most likely have to take place on the state level.
State Sen. Michael Gianaris — an outspoken critic of the tax breaks offered in the aborted plan to bring Amazon to Queens — said he expects ICAP and other tax breaks will be closely examined during the next Albany legislative session.
“At the minimum, they need dramatic change,” he said. “There has been tremendous abuse of the economic development opportunities for too long.”
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