Affordable housing construction in New York has declined significantly in the last few years in the wake of COVID-19 through a combination of factors including higher interest rates, inflation and supply chain instability resulting from the overall disruption of the pandemic. But a key factor that real estate developers, city and state government officials, and many housing advocates cite is the expiration of the states 421-a property tax exemption for the construction of affordable housing as part of larger rental housing developments.
Howard Slatkin, executive director of the nonprofit policy group Citizens Housing and Planning Council, pointed out that as-of-right buildings that have already begun construction could be completed before 2030 but without the 421-a program. “That housing is all going to be market-rate. All those affordable units just go ‘poof,’ which is really a terrible outcome,” said Slatkin, recently a top official at the Department of City Planning.
For buildings where Mandatory Inclusionary Housing is required, without 421-a developers will either be stuck or have to seek some other type of relief to make their projects successful, Slatkin said. “Without the tax exemption. It’s not clear how they would ever be able to afford to complete those buildings,” he said.
“If the Legislature can enable the units that have started to completeit’s kind of like well, they’ve stored a few nuts for the winter,” he continued. “But if those buildings can’t complete, then it’s a double-whammy, because there’s nothing new in the pipeline to replace it. The squirrel doesn’t have any nuts stored for the winter and we might not make it through that winter.”
