Legislation Introduced to Audit 20 Percent of 421-a Buildings
Two bills, Int. 1366 and Int. 1359, were recently introduced in the City Council by the chamber’s housing committee chair, Jumaane Williams, and Stephen Levin. The first bill would require HPD to audit a certain number of buildings receiving benefits under section 421-a of the real property tax law annually to determine whether such buildings are in compliance with applicable rent registration requirements. And the second bill would require HPD to audit buildings receiving benefits under the 421-a tax exemption program to ensure that such buildings are complying with the applicable affordability requirements.
Specifically, the agency would have to audit at least 20 percent of all 421-a buildings each year. If a building is out of compliance, the housing agency would report it to the Council Speaker and tell the Finance Department to revoke the tax benefits for the period of the violation.
The pressure to audit the 421-a program has increased due to an October 2009 audit by the City Comptroller, which found that 70 percent of the properties reviewed didn’t have the proper paperwork on file showing they were approved for the tax break.
The 421-a program has been suspended since January while the real estate industry and construction labor unions worked out an agreement on wages for construction workers in larger buildings collecting the subsidy.