Albany allows 421-A changes

From Crains:

The de Blasio administration secured significant, last-minute changes Thursday to a bill outlining a revamped tax-exemption program known as 421-a, which has been hotly debated in Albany as the state legislative session went into overtime, officials told Crain’s.

The final bill, which was still being reviewed Thursday evening, would need to be approved by the Senate and the Assembly and signed by Gov. Andrew Cuomo, who has been feuding with Mayor Bill de Blasio recently.

According to city officials, the bill includes a six-month extension of the current 421-a program—which provides the developers of both condo and rental buildings with a property-tax exemption lasting up to 25 years. In Manhattan and some of the pricier neighborhoods in Brooklyn and Queens, though, builders have had to set aside 20% of their units for low-income households, while in about 83% of the city, the exemption came with no obligation to include affordable housing.

The new 421-a program will last four years. Instead of relying on geographic boundaries, which allowed many lucrative developments to receive the tax exemption unconditionally, it will adopt a three-tiered system that was proposed by the mayor last month. The idea is to let the market influence which option developers pick, but to lock in at least 25% of the units as affordable in each case.

In a late twist, the administration prevailed on Albany lawmakers to remove one of the three options for developments in Manhattan below 96th Street. The removed option would have allowed units for households earning 130% of area median income to qualify as affordable, thus meeting the mandate for the market-rate units to get a 25-year tax break. The administration wanted to ensure that some units in those projects are set aside for significantly poorer families.

Mr. de Blasio did not, however, get the mansion tax he proposed. And his plan to nix condo developments from the 421-a program was only partially granted. The new program would allow some lower-priced buildings in the outer boroughs to receive the tax break, provided that buyers agree to make the condo their primary residence for at least five years.