Under New York City’s 421a tax abatement program, most new housing developments in the city with three or more units are eligible for a 10-15 year property tax exemption upon completion. The program is intended to subsidize affordable housing in low-income neighborhoods, but it has been widely criticized for being available to housing developments that provide no affordable housing units. In 2003, the Independent Budget Office conducted a study that found that only seven percent of the housing units subsidized between 1985 and 2002 were affordable to low and moderate income families. 421a is set to expire on June 15 and many New Yorkers, including New York City Mayor Bill de Blasio, are calling for reform of the program.
Amidst reform negotiations, Andrew Cuomo announced that he would be holding an unexpected rally on Thursday in Harlem to open a dialogue about rent control issues. During a recent speaking engagement in Nassau County, Cuomo expressed his desire to refine rent regulations and 421a in the coming months. “I’m fighting not just to renew the rent control laws, but also to improve and expand them,” Said the governor in regard to the tax exemption program.
In spite of his apparent willingness to reform 421a, Cuomo’s critics are arguing that the rally is nothing more than a publicity stunt designed to bolster the governor’s ailing approval ratings. Last week, governor Cuomo and mayor de Blasio engaged in a very public dispute over the program in which de Blasio accused Cuomo of being “disingenuous.” Cuomo downplayed the significance of the argument in subsequent interviews, but it has still been the subject of a great deal of speculation in the media. It remains to be seen how the reform talks will be affected in the coming weeks as 421a approaches its sunset date.
Stay tuned for more updates on the New York City real estate market from Robert Khodadadian of Skyline Properties.