What do you call a useless tax break meant to encourage construction of affordable housing for New Yorkers?
For years, it was known as 421a, the name of the law that enabled the tax break. Now Gov. Andrew Cuomo wants to revise the program and call it Affordable New York.
Neither name really matters.
What does matter is that the proposed revision now before the State Legislature could be a win for real estate developers and building trade unions — and a loss for NYC residents and taxpayers. That’s unfortunate, but not surprising, considering that Cuomo’s proposal is nearly identical to a deal developers and unions unveiled last fall.
His plan would provide a 35-year tax break on any NYC building with more than 300 units, if a certain percentage of apartments is set aside as affordable, and if developers provide higher wages to workers. The abatement would apply to both the affordable units and the market-rate units if wage and affordability requirements are met. The apartments would have to stay affordable for 40 years.
One problem is how the proposal defines “affordable.” In one option, developers could build in the outer boroughs or upper Manhattan, set aside 30 percent of their units for renters earning $117,780, which is 130 percent of area median income, and still get the 35-year tax break.
That income guideline wouldn’t help those who need assistance the most. Other options with lower income ceilings don’t go far enough. Meantime, while developers would build without paying taxes, taxpayers would have to fill an $82 million annual gap. In addition, there’s inadequate oversight and enforcement. That has to change.
Mayor Bill de Blasio is also rightly concerned that state legislators might try to make a bad program worse by adding more condominiums to it. That would detract from the focus on affordable rentals. State officials say Cuomo won’t back that, but if it happened, it would further sweeten a program that’s already dessert for developers.
Affordable housing is too important to be used as a reward program for developers and trade unions. But that’s all Affordable New York really is.