By Frank Fortino
Nearly two months have passed since Governor Andrew Cuomo’s office sent state legislators a replacement for the 421a tax break, now dubbed “Affordable New York.” That move came two months after initial reports of the office reaching an agreement with developers and construction workers.
Will the legislation pass? Does it hold the answer to affordable housing in the five boroughs?
After three decades of partnering with the New York City construction and real estate industries, I don’t know.
But I do know that this city needs affordable housing, whether or not Affordable New York holds the answer.
The Need for Affordable Housing
Back in the day, 421a gave the construction industry a much-needed push. The original legislation gave the industry an opportunity to turn around, building residential properties for highly successful people, as well as for those with more modest incomes. People who earned a reasonable salary or wages could own or rent apartments near their offices or businesses, allowing them to enjoy the New York lifestyle.
That lifestyle—the access and the opportunities—is why so many people want to live in New York. But it’s impossible to rent or buy here at an average income level, even one that’s significantly higher than in other parts of the country. Affordable housing programs allow regular folks, not just the super-rich, to rent nice apartments in desirable communities. These incentives also help pay for maintenance on existing units, in addition to creating new ones.
No Silver Bullet
The Affordable New York bill in Albany has its critics. A study published by the New York City Independent Budget Office earlier this year estimates that, under 421a, the city wasted up to $2.8 billion over 11 years by providing tax relief to property owners instead of supporting additional development. Even as lawmakers consider 421a’s successor, a new bill has already been introduced to change methods of calculating affordability for housing projects in hopes of increasing affordability under Affordable New York.
At the same time, I’m encouraged by the discussions and the proposed solutions. This complex problem requires creative thinking—from all parties. With the collective talent and intelligence in this city, we can find a solution by harnessing that creativity with the right incentives.