Policy Brief | May. 2015 |View the Press Release

New York’s Unaffordable Housing Program: Time to End 421-a

Thomas J. Waters, Victor Bach

Summary: First conceived in 1971, the 421-a tax exemption was billed as a stimulant for a lagging private residential market with a strong affordability mission built in. As the economics of the city’s housing market changed over the years, it has evolved into a spectacularly inefficient affordable housing program that today costs the city more than a million dollars per affordable apartment created. Our new report analyzing the impact of 421-a argues against continuing the housing program because the tax exemptions that developers receive at great public expense produce very little by way of affordable housing. The report also counters the claim that development would cease without 421-a, or that 421-a is needed to compensate for high land and construction costs.

Issues: Affordable Housing

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