NYC Comptroller-Elect Wants to End 421-a Tax Abatement

Chris Gaetano
Published Date:
Nov 18, 2021
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Brad Lander, the New York City comptroller-elect, said he wants to end the 421-a property tax abatement, saying that the ostensible affordable housing provision is serving as a loophole for property developers, Crain's New York Business reported

In general, the 421-a program is a tax incentive for the construction of affordable housing in the city. Rental units that apply and are approved for the program are subject to rent restrictions, which are administered either by the state government or through a city agency that finances affordable housing, such as the New York City Department of Housing and Preservation Development (HPD). Once the application meets all eligibility requirements, HPD issues a certificate that is then filed with the city Department of Finance, which would then implement the benefit for the developer. 

The comptroller-elect said that the program, which saves developers about $2 billion a year, has not generated the amount of affordable housing one would expect, based on the costs to the city. Proponents of 421-a said that ending the program would freeze affordable housing development in the city, which they assert is next to impossible without the tax abatements. But Lander believes that developers of luxury properties have benefitted the most, which calls into question the program's status as an affordable housing initiative.

With this in mind, he has called for the provision to sunset at its schedule June 2022 deadline, after which he hopes it will be not tweaked, as it has been in the past, but, rather,  replaced entirely as part of a broader property tax reform. 

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