421-A Real Estate Tax Break Remains Under Scrutiny in Albany
Albany lawmakers are still pouring over a housing proposal to replace an expired tax break to developers known as 421-a. Zack Fink filed the following report.
A major tax break for real estate developers was known by its bland tax code designation, 421-a. It had been on the books since the 1970s, but in 2015, Albany lawmakers, including Governor Andrew Cuomo, let it expire.
Now, Cuomo has a new proposal to revive it, but the reception has been lukewarm at best.
"It's on the table," said Assembly Speaker Carl Heastie. "It's part of the city's affordable housing plan, so it's always something we have to look at. And we will talk about it as a conference as part of the budget, it looks like at this point."
In 2015, Mayor Bill de Blasio came up with plan for 421-a that would have led to more affordable housing. But the governor shot it down because it included a tax on luxury developments. The governor's reaction was considered by many to be part of the ongoing feud between him and de Blasio.
Cuomo's new proposal was first announced late last year and officially introduced as legislation last month. But earlier this week, it was the ,ayor's turn to throw shade on Cuomo's plan.
"And we are concerned that we not creep back in the direction of the old broken system," de Blasio said. "We are particularly adamant that we cannot support a plan that reverts back to subsidizing luxury condominiums."
The governor's proposal includes a prevailing wage for union workers on new construction projects.
Some Democratic Assembly members are aligning themselves with the mayor.
"I think that the governor has a two-way proposal. Unfortunately, there was a third party who wasn't at the table during negotiations, and that was the tenants, people we represent each and every day here in Albany," said Assemblyman Walter Mosley of Brooklyn. "Clearly, there are some concerns about oversight and compliance."
Senate Republicans want to see some form of the program reinstated.
"421-a has been off the table now for over a year. It's cost us over $1 billion in money that could be on the street today building housing. And it's wrong," said state Senator Martin Golden of Brooklyn. "We need to get that bill resolved. We need to get it done."
Whether the legislature ends up passing the governor's plan or something close, they certainly do not appear to be in a hurry. It's likely to get resolved as part of the budget due at the end of March.