A revived 421-a tax break program may soon be in the offing, and this new version could see exemption on buildings extended to 45 years from the previous 25 years, Politico reports.
Talks of the revival first surfaced in August this year. The main point of contention that led to the program’s expiration in January this year was union-level wages. Despite a proposal to extend the exemption to 35 years last summer, the Real Estate Board of New York (REBNY) and the Building and Construction Trades Council of New York were not able to come to an agreement on wages.
Now it appears that Governor Andrew Cuomo, developers, and workers unions are in the midst of closed-door negotiations to hammer out a final proposal to renew the program, which has seen the city lose over $1.2 billion in revenue this year, according to Politico.
From what we do know so far, the group overall is considering an average wage of $60/hour for workers on projects with 300 or more apartments that are in most parts of Manhattan and on the waterfront in Brooklyn and Queens. In other parts of Queens and Brooklyn it would be $45/hour on average.
The program was previously criticized for favoring real estate developers and not creating enough affordable units, not just in terms of quantity but also the income range they were being offered at. Construction unions argued prior to the expiration that just the developers were making bank on the projects.
Since the program’s expiration, the city has seen almost no new applications for rental buildings, The administration on its part however has argued that its intention to create 80,000 new units of low and middle-income apartments will not be affected regardless of the program’s existence.