New York’s 421-a tax break could get new life with legislation put forth by Gov. Andrew Cuomo following a deal struck by construction unions and developers late last year, according to WNYC. The abatement encourages developers to build more affordable housing and provides a tiered labor wage structure for projects in the city.
Now called Affordable New York, the former 421-a incentive is set to be presented to the state legislature. Cuomo said it will add 2,500 affordable housing units annually for a total of 9,000 units. The proposed bill would let residential projects breaking ground after Dec. 31, 2015, qualify if work starts before June 15, 2020, and is finished by June 15, 2026.
- Critics of the deal and the new legislation alike contend that the program’s tax revenue — cited at $1 billion — could be used more effectively, such as to create projects exclusively for low- and middle-income households. Cuomo was quoted last week on a radio program saying that he is now pressing the state legislature to green-light Affordable New York and release the state’s $2 billion affordable housing allocation.
Large metro centers like New York City are in the grips of an affordable housing crisis as rising population levels put a strain on dwindling inventories, causing housing prices across the board to rise.
Earlier this month, New York City Mayor Bill de Blasio announced that in 2016, the city added or restored more than 21,000 units of low- and middle-income housing — the most since 1989. One-fifth of those additions were for households making less than $25,000 annually while nearly one-third were allocated for those earning up to $40,800.
For builders and developers, however, balancing rising demand for market-rate housing with the need to incorporate lower-cost alternatives will likely remain a challenge. A report last week from real estate website Zillow found that a 20% down payment on a median-priced home in the New York City metro area will cost buyers there 114% of their average annual income.
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