clock menu more-arrow no yes mobile

Filed under:

De Blasio's Affordable Housing Agenda In Jeopardy Without 421-a, Lawyers Say

Without tax breaks developers have less incentive to build mixed-income buildings

It's only been two days since the City Council approved Mayor Bill de Blasio's controversial housing proposals, and already real estate lawyers are expressing concern about their effectiveness. The Real Deal interviewed several of them, all of whom expressed hesitation about how Mandatory Inclusionary Housing (MIH) would work without requisite tax benefits for developers.

The 421-a tax abatement program expired in January this year and that has since led to a reduction in developers planning mixed-income projects, real estate lawyers told TRD. With no substantial tax breaks on the table developers are hesitant to create affordable units and are instead choosing to building commercial or condo buildings.

The success of MIH was predicated on the existence of the 421-a program or similar initiatives, lawyers told TRD, and without a significant program like it developers don't have an incentive to create affordable housing.

In essence, MIH asks for the creation of a fixed set of affordable units at new developments when developers are seeking rezoning.

With the City Council negotiating a lower threshold of affordability for some of the units (40 percent of area median income) developers are likely to be even more wary without any tax benefits, lawyers told TRD.

Some subsidies do exist as part of the rezoning efforts, but they're not enough, according to the lawyers. In the meantime some elected officials have so far suggested replacements for the 421-a program.