Mayor de Blasio Calls for Overhaul of 421-a Tax Benefits
Mayor Bill de Blasio recently proposed a sweeping overhaul of the 421-a tax program to spur a new wave of housing with rent-restricted apartments in New York City. The mayor called for tough new provisions in the 421-a program that will expand requirements citywide, double the amount of rent-restricted housing it generates, and ensure tax benefits are granted only when developers agree that new buildings will have a minimum of 25 to 30 percent of their apartments set aside as rent-restricted.
The 421-a tax benefit was instituted to spur residential development at a time when very little new building was occurring in the five boroughs. It has since added a rent-restricted housing requirement, but one that produces only a modest amount of low-income housing for the more than $1.1 billion in forgone tax revenue it draws every year.
In addition, current 421-a benefits expire after 20 or 25 years. The mayor proposes aligning the length of the 421-a benefit to the 35-year term of rent-restricted units. The city also proposes eliminating provisions that allow for buildings to have two separate entrances based solely on the income of tenants.