The 421-a exemption, dubbed “New York City’s most expensive real estate tax break” by the NYC Independent Budget Office, will cost the city $3 billion in tax revenue from fiscal 2012 through the fiscal year that ends next month.
It is designed to encourage new residential construction, and developers who get it are often required to include affordable units in their projects.
The 421-a exemption expires June 15, and the Legislature is considering alterations that could curb its effect.
The Real Estate Board of New York says without the tax break, developers couldn’t afford to build lower-cost housing. But watchdogs say the lucrative program encourages corruption because developers need votes in Albany to keep it in place.