Mayor Bill de Blasio today celebrated what he said was a partial victory on the controversial 421a tax credit for developers, which underwent some revisions in the package deal that concluded the legislative session in Albany last week—even though Gov. Andrew Cuomo had repeatedly asserted there was not time to reform the abatement this year.
Speaking to reporters after an unrelated event in Brooklyn, Mr. de Blasio highlighted that the final agreement between Mr. Cuomo, Assembly Speaker Carl Heastie and State Senate Majority Leader John Flanagan included his administration’s recommendation that all buildings receiving the exemption be required to include affordable housing. He and the governor had one of their most bitter feuds when Mr. Cuomo accused the mayor of coming “late in the day” when he laid out a set of reforms to 421a in May, a month before the end of the legislative session.
“The broad answer is, obviously some real progress was made on 421a. We were very proud of that fact. You know, we had often heard it would not be possible to handle it in this session, we believed it was doable in this session. Lo and behold, it got done,” he said. “We’re going to have a lot more affordable housing than we would have otherwise, and taxpayers are going to get a much better deal, because any time we subsidize a building, there will be affordable housing as part of that.”
Mr. de Blasio did not mention Mr. Cuomo by name.
The abatement was created in the early 1970s to spur construction during an economic downturn, and was revised in the 1980s to include provisions for below-market housing. Critics long complained that the program only required developers to include affordable units if their buildings are in the “Geographic Exclusion Area” covering less that 17 percent of the five boroughs, and that it cost the city upwards of $1.1 billion in foregone revenues.
Even though his recommendation to abolish the GEA went through, Mr. de Blasio nonetheless lamented that his proposal for a city “mansion tax” on any condo or co-op unit valued at more than $1.75 million did not make it through. Revenues from such a tax would have gone toward below-market housing development and preservation.
“I think that was a mistake, I think that was a lost opportunity,” he said.
The mayor said he would have a more comprehensive statement on the package deal, which included minor reforms to the city’s rent laws. While the agreements slightly raised the thresholds for removing an apartment from the rent stabilization program and for passing along the costs of building improvements to tenants, it did not eliminate a landlord’s power to yank a unit out of rent control once it becomes unoccupied, a reform Mr. de Blasio and Mr. Cuomo both called for.
“On rent, we made progress, and we look forward to making more progress in the future,” Mr. de Blasio said.
Even Mr. de Blasio’s proclaimed victory on 421a might be short-lived. The Albany arrangement only extends the abatement for six months, with the intention of allowing real estate interests and building trades unions to reach an agreement on prevailing wage requirements.
If no consensus comes about, the exemption will expire completely. And even if one does, Deputy Mayor Alicia Glen testified before the City Council that obligating builders to pay prevailing wages would mean “jeopardizing” as many as 17,000 potential affordable apartments.
Mr. Cuomo’s office did not immediately respond to requests for comment.