Gary LaBarbera, James Whelan, Eric Adams, Tiffany Cabán and Kathy Hochul (Getty, iStock / illustration by Ilya Hourie for The Real Deal) UPDATE May 17, 2022, 7:12 p.m.: As the mayor makes a last-minute effort
UPDATE May 17, 2022, 7:12 p.m.: As the mayor makes a last-minute effort to save an affordable housing tax break, city council members plan to rally for his demise.
With seven business days left in the state’s legislative session, Mayor Eric Adams travels to Albany to do his business for a 421a replacement. Meanwhile, the city council’s housing and buildings committee has scheduled a hearing Tuesday on a resolution calling on the state to let him die.
But the Council canceled the hearing without explanation. A spokesperson said it was postponed and not rescheduled.
One possibility is that the Adams administration, which sources say plans to release its housing plan soon, has convinced Council leaders to back down. [Editor’s note: A Council leader said Tuesday evening that the hearing was pushed back to allow state legislators, who were in session Tuesday, to participate.]
The council resolution argues that the June 15 expiration of 421a “creates an opportunity for the New York State Legislature to examine issues with the New York City property tax system and to bring finally some long-awaited changes”.
The hearing was also supposed to focus on a state bill to implement statewide eviction for good cause. The measure would give tenants a defense against eviction if their rent was increased by more than 3% or 1.5 times the regional inflation rate, whichever is greater.
It will ultimately be up to state legislators to renew or replace the tax relief. But since a replacement program proposed by Gov. Kathy Hochul, dubbed 485w, was cut from the state budget, the issue has failed to gain traction among lawmakers. The chances of a resolution before the end of the session, scheduled for June 2, seem slim.
“I’m not too optimistic,” said Gary LaBarbera, president of the state and city chapters of the Building and Construction Trades Council.
“There’s no one to defend it. We’re on this merry-go-round,” he said, adding that lawmakers want affordable housing, but not to subsidize it or incentivize it. “When we say, ‘Qu ‘would you like?’ there is uncertainty. »
LaBarbera lobbied for 485w, teaming up with the New York Real Estate Board. The two were at odds the last time the tax break expired, with LaBarbera fighting over prevailing salary requirements on all projects that benefit from the exemption. It lasted more than a year, until the parties reached an agreement that included some of the wage rules demanded by the unions.
Developers argue that without the program, no multifamily construction will proceed in the city. Funding for projects that cannot meet the June 15 deadline is already on hold.
The governor replacement program calls for deeper and permanent accessibility, but 421a critics say it looks a lot like its predecessor.
Developers argue that the 35-year tax abatement is essential to building housing in the city, given the high property taxes and other costs that rental projects face. A recent report from New York University’s Furman Center found that a majority of multifamily units built between 2010 and 2020 were 421a beneficiaries.
In prepared testimony for Tuesday’s canceled hearing, New York’s Real Estate Board argues that the city and state cannot match the level of investment that the private sector is contributing to creating affordable housing.
The trade group also planned to testify against the eviction for good cause, saying it will “ensure a cycle of divestment, discourage new supply and render the 421a debate moot.”
Tenant advocates and elected officials plan to rally in Albany to demand passage of meaningful eviction legislation before the end of the legislative session. An earlier effort failed to persuade lawmakers to pass the bill before the eviction moratorium expires on Jan. 15.
Asked last week about property tax relief, Manhattan Sen. Brian Kavanagh, who chairs the Senate Housing Committee, said he did not know “if or when we will come back to this”. Although 421a is a complex issue and linked to other complicated topics such as property tax reform and mandatory inclusive housing, the senator noted that over the past few years major political issues have been resolved in the last days of the session.