State Senators Simcha Felder and Martin Golden are working to re-instate a tax break for developers that they hope will open the door to expanded housing options for New Yorkers, especially in their south Brooklyn districts.
The abetment, known as 421-a, has offered generous tax breaks to developers in the city since the 1970s, originally as a means of correcting what was then a sluggish market of housing starts. As the New York real estate market regained its strength, the program’s focus has been to ensure that developers provide affordable housing and keep city neighborhoods open to different income levels.
Last year, Governor Andrew Cuomo tied 421-a to a push his administration was making to raise wages for construction workers. Negotiations with builders failed and, for the first time in decades, legislation renewing the program went unsigned, allowing it to lapse.
Following an announcement from the governor’s office last month that an agreement on wages had been reached, Senators Felder and Golden were tasked by Senate President John Flanagan to draw up plans to revive 421-a.
Sen. Felder told Hamodia that his goal is to design a plan that will translate into real housing options that could alleviate the housing crisis faced by so many in his constituency and others struggling with the city’s dearth of affordable housing.
“Everybody has their ideas of how to solve the housing crisis. I don’t think that any one plan is going to solve it, but at the same time, giving up is not something that is in our DNA and giving incentives to build is the most basic tool to work with,” he said.
Even before Governor Cuomo’s confrontation with contractors effectively canceled 421-a, the program had begun to face opposition. News reports showed that it had strayed from its stated goal and been used to cut costs of luxury condos in high-income neighborhoods. Reforming the abatement became a central message of Mayor Bill de Blasio during his 2014 campaign.
A round of negotiations between the state, city, the New York State Board of Real Estate, and other stakeholders yielded a compromise, but one that Sen. Felder said did little to help families in search of affordable housing.
“I wasn’t happy because the new proposal was okay for developers, but didn’t do a thing for most homeowners,” he said. “I’m not sure why we haven’t heard any advocacy from the mayor on this point.”
A key objection that Sen. Felder had to the changes made was a clause limiting the tax break only to buildings that were subdivided into six units or more. Previously, those split into four or more were covered. He hopes new proposals to re-instate the program will include larger living spaces designed for families.
“This is not really a new argument. We have been saying for a long time that the change from four to six makes 421-a into a program that only helps people looking for studios and small apartments, but does very little for families and certainly not for large ones,” he said.
Sen. Felder’s Boro Park constituency holds little open space available for new development, but he said the abatement could help push builders to consider options in the few areas that do exist and the scarcity is “even more reason” why 421-a could help the neighborhood.
The governor’s office did not respond to an inquiry from Hamodia on the matter. A member of Sen. Golden’s staff said that he was not available to comment.
The 421-a abetment has always had different standards in different parts of the city. However, the changes made in recent years severely limited its application to the outer boroughs, another issue that the senators hope to address.
“No one has seen the agreement that the governor struck, but some news reports say the only place it covers in Brooklyn is the waterfront. That’s not where the affordable housing issue exists,” Bob Farley, legislative advisor to Sen. Felder, told Hamodia. “This is an important program. We need to make sure that it’s re-instated and that it comes back in a way that it actually does something for families.”