When at first you don’t succeed, kick the affordable housing can down the road.
That appears to be the case as multiple sources say that Gov. Kathy Hochul is pushing to give an expiring subsidy to New York City developers to build affordable housing a one-year extension as part of the now late state fiscal year 2022-23 budget.
The tax abatement, known as 421-a and is set to expire June 15, is used to incentivize real estate developers to build affordable housing. Many developers get the tax break for constructing buildings that contain 80 percent market rate and 20 percent affordable units.
As 421-a is currently written, those making up to 130% of the area median income (AMI) — $139,620 for a family of three — would be eligible for these units in buildings subsidized by the program.
Hochul proposes replacing 421-a with a new tax break called 485-w. Under this plan, the ceiling is lowered for which families qualify from 130 percent of the AMI. Instead, those making up to 90 percent of the AMI will qualify for buildings with 30 units or less. And larger buildings will only be open to those making up to 80 percent of the AMI.
But progressive lawmakers in the state want to see the program scrapped altogether, arguing the subsidy should be replaced with a reformed property tax system that supports new housing construction and focuses our scarce affordable housing resources.
“There’s going to be a one-year extension of 421-a as part of the final budget,” said one veteran assembly lawmaker, adding the governor is adamant about including it as part of the budget.
But one progressive lawmaker source says Hochul wanting the extender to be included as part of the spending plan is a last gasp measure that will not make it into the final budget.
“As a progressive and somebody who cares tremendously about reforming our property taxes and building affordable housing, 421-a and 485-w does not do either. We have time before the old program expires and we should come up and reform our property tax code and figure out how to build affordable housing cheaper and more efficiently,” said Assembly Member Robert Carroll (D-Brooklyn).
Assembly Member Steve Cymbrowitz (D-Brooklyn), chair of the Assembly Housing Committee could not be reached on the issue at post time.
Meanwhile, longtime Assembly Member Peter Abbate (D-Brooklyn), the de facto head of the Assembly’s Brooklyn delegation, who has been through numerous state budgets in his 35 years in the assembly, said budget hold-ups are usually over one or two issues, and then other issues start getting thrown in.
This year it is criminal justice reforms they couldn’t agree on and then the 421-a extender gets put in, said Abbate.
“There’s two conferences this weekend. One on Zoom Saturday night. And one on Sunday afternoon in person. Then there’s another conference on Sunday in the late afternoon probably to go over the final details and we’ll probably start voting on Monday,” said Abbate.