A top housing official for the de Blasio administration declined to say on Thursday whether the city’s 421a affordable housing program should be extended in its current form.
At an oversight hearing held by the City Council’s housing and budget committee, New York City Housing Preservation and Development commissioner Vicki Been would only say that the administration is analyzing the program including looking for ways to make it more efficient.
Housing advocates have called for an end to the affordable housing program, saying it privileges big developers.
The program provides a tax abatement for new housing construction, but in some areas of the city the developer is required to include affordable housing in order to get the tax break. The program is set to expire in June, setting up a possible showdown to renew the program in Albany.
A coalition of housing advocates have come out against the program, including the Association for Neighborhood and Housing Development, Make the Road NY, the Legal Aid Society, and the Community Service Society.
“In the very different New York City of 2015, 421-a is a scam and a senseless subsidy: billions in unnecessary tax breaks for luxury condos,” the coalition said in a statement.
Committee chair Jumaane Williams said that as the program exists now, it should not be extended, and other councilmembers, including Rosie Mendez, Ydanis Rodriguez, Mark Levine, Antonio Reynoso, and Helen Rosenthal, have also called for an end to the program with tenant advocates.
Been said that she shares concerns about the efficiency and effectiveness of the program and that the administration is taking a deep look at the program to see how it could be reformed.
Been said they want to see whether they can make the program more efficient, make the benefit (in the form of the tax break) no more than is absolutely necessary, make it better aligned with the agency’s other programs, and make it less costly for the agency to administer and developers to use.
Specifically Been also said that they would be looking at the boundaries that dictate whether the developer needs to include affordable housing (the Geographic Exclusion Area), whether condos should be treated the same as rentals in the program, how much affordable housing should be required, and whether the affordable housing should be on-site, off-site, or whether they could bring back a certificate program.
The old 421a certificate program allowed developers of market rate housing to get the tax abatement if they bought a certificate to subsidize affordable housing elsewhere. The certificate program was abolished the last time the program was reformed because it was thought to be inefficient. Councilman Brad Lander said that the program provided fifteen cents of subsidy for every dollar of tax abatement.
Williams tried to get the commissioner to take a position on whether the program, as it exists now, should be continued, but Been would only say that the city is looking at that, and looking at whether the program can be made efficient and effective.
Rent regulation laws are also set to expire in June, and some advocates are hoping the possible dissolution of 421a can help force the Republican-controlled State Senate to extend the rent regulation laws.
In her testimony, Barika Williams of ANHD said, “Any conversation about 421a must include our City Rent Regulation Laws, which are also set to expire in June 2015.”
The last time the city’s rent regulation laws were up, housing advocates used a similar strategy, linking the renewal of the rent laws to the J-51 tax abatement program.
The New York State Association for Affordable Housing, a trade organization for the state’s affordable for-profit housing industry, submitted testimony in support of the program.
“The growing demand for more affordable homes means we must continue 421-a and strengthen it broader affordability and ensure what is built today can be sustained in the future,” reads the testimony.
The Real Estate Board of New York (REBNY) also supports the program. In their submitted testimony they said, “we need to see the program as one very important tool to address our housing issues and to meet the goals of the administration’s housing plan.”
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