Good riddance to a juicy tax exemption that never worked as well for the needy as it did for the rich.
It’s time to start over.
The expiration of the controversial 421a program, which was intended to incentivize affordable housing development, is now an opportunity. The program had long been a problem, as it gave tax breaks to developers building luxury complexes, condominiums or other projects with no affordable housing at all. It has long needed significant reform.
But when change was attempted in June, it came with a poison pill from Gov. Andrew Cuomo:
Developers and the construction unions had to come to an agreement to pay workers prevailing wages on 421a projects. Those negotiations collapsed this month.
For now, 421a’s expiration on Jan. 15 won’t hurt affordable housing because there’s plenty in the pipeline. But in the long term, without the incentive, developers might stop constructing such housing in hotter, higher-priced neighborhoods. They might use other city programs to build affordable units, but they could pick and choose lower-cost or less desirable areas, creating an even greater unacceptable divide among the haves and have-nots.
Mayor Bill de Blasio’s rezoning efforts can help, especially the mandatory inclusionary zoning that requires that up to 30 percent of new units be designated as permanently affordable. If the City Council approves a final plan that adds units for lower-income levels, and makes affordable percentages higher, the effort could do even more.
But ultimately, it’s up to Albany. State lawmakers must create a program that makes sense, leads to new affordable housing in all neighborhoods and doesn’t give multimillion-dollar tax breaks to luxury buildings or condominiums with little in return. A new law must make affordable housing the priority, with severe penalties for not doing so. It must avoid loopholes for developers looking for yet another tax break, and avoid impossible caveats, like a broad prevailing wage requirement, that would doom the program.
Commit to creating a new law that developers and union workers can get behind, but more important, a law that leads to affordable housing for far more New Yorkers.