UPDATE: It’s now being speculated that Governor Andrew Cuomo’s version of the 421-a tax break program could cost the city over $800 million more than previous estimates, Politico reports. Annually, the expenses will be $82 million more than plan Mayor Bill de Blasio had offered when the tax break program was set to expire. The greater expense is largely due to a higher commitment to affordable housing and fair wages, a spokesperson for the Governor told The Real Deal, and stressed that the expenses were negligible when looked over a longer period of time.
After some back and forth between Governor Andrew Cuomo’s office, real estate developers, and construction workers over the renewal of the 421-a tax break program at the end of last year, all the parties now seem to have finally come to an agreement. On Sunday, Cuomo’s office sent off this new bill to the state legislature for their approval, and with that missive they announced that the program will henceforth be known as “Affordable New York,” The New York Daily News first reported.
Some of the biggest changes to the program, that were revealed in November last year, include an affordability timeline of 40 years on affordable units, up from the previous 35 years, and the tax exemption going up to 35 years. All of this will be made available to developers building projects with over 300 apartments south of 96th Street in Manhattan, and near the waterfront in Queens and Brooklyn, who pay an average of $60/hour to construction workers in Manhattan, and an average of $45/hour for workers in Queens and Brooklyn.
Governor Cuomo revealed the new “Affordable New York” monicker on John Catsimatidis’ radio show on Sunday morning, and at the time he only mentioned the 40-year affordability period, and did not go into details on some of the other aspects of the new bill, according to The Daily News.
It’s not yet clear when the state legislature will vote on the bill, but some of the new details that Governor Cuomo revealed on Sunday include the fact that this new program will help create 2,500 affordable apartments each year, and will have created 9,000 new affordable units by the time it expires in the summer of 2020, according to The Commercial Observer.
The new proposal has already received the backing of construction unions, affordable housing advocates, and developers alike, and now it’s up to the state legislature to put the bill into practice.
- Gov. Cuomo offers tax incentives in new affordable housing proposal for low-income New Yorkers [NYDN]
- Does Cuomo Have the Answer to 421a? [Commercial Observer]
- Developers, construction industry finally reach agreement on 421-a tax program [Curbed]
- 421-a tax break revival is already imperiled [Curbed]