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421-a at 50: Unaffordable New York
Samuel Stein, Debipriya Chatterjee
Summary:
For the last 50 years, New York State has allowed New York City developers to access an enormous tax break known as 421-a, New York’s largest real estate tax expenditure program. In this report, we take a close look at 421-a’s performance as an affordability program. Whereas our last report on 421-a delved into the program’s history in order to explain its exploding costs, this report focuses primarily on the program’s latest iteration, Affordable New York, which we show has been used to build a large amount of high-end housing, including income-targeted "affordable" units that are at or above market rents, and is set to expire in June 2022.
While we recognize that Governor Hochul’s 421-a replacement plan, known as “Affordable Neighborhoods for New Yorkers,” seeks to deepen the program’s affordability requirements, it maintains the core logic of 421-a as it has been operating for the last 50 years. For this reason, we continue to insist that the best way to rethink real estate taxes and affordable housing subsidies would be to let this program expire, rebalance the property tax code, and create new incentives to support the kinds of housing everyday New Yorkers need.
Issues: Affordable Housing
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