The program expired in January and no renewal agreement has been reached
The 421-a tax abatement program spurred a lot of affordable housing, and new numbers show just how much. Forty-two percent, or 5,885 of the 13,755 affordable units built in 2014 and 2015, were aided by 421-a, according to a new report by the Real Estate Board of New York (REBNY) published by Crain’s. That study included 156 projects that were either all affordable or mostly market-rate with about one-quarter of the units set aside as affordable housing.
The 421-a program expired in January and the fear is that without it, the production of affordable housing will drop significantly. "It is clear that without 421-a, much less affordable housing will be developed, particularly in those areas of the city where it is most difficult to build [because of high costs]," REBNY President John Banks said in a statement.
One of the issues that derailed the renewal of 421-a was union work and prevailing wages. If a prevailing wage was paid on each project, the Independent Budget Office (IBO) estimated achieving Mayor Bill de Blasio’s housing goals would cost an extra $4.2 billion.
However, a study from the Building and Construction Trades Council of Greater New York, the umbrella organization for union work in the city, said union labor had a 65 percent share in projects over 100 units, even more on larger projects, but wasn’t seeking legally mandated wages on very small projects all-affordable projects. Gov. Andrew Cuomo said he would not sign any deal that doesn’t have the backing of organized labor.
The head of the Department of Housing Preservation & Development (HPD) said other programs can help fill the gap left by the expiration of 421-a. That remains to be seen.
• All 421-a coverage [Curbed]