Most city officials and builders agree affordable housing is a widespread issue in New York City. The average monthly rent is $2,629, and housing eats up 63.1 percent of workers’ wages, according to a recent study from the Global Cities Business Alliance.
While Mayor Bill de Blasio’s Housing New York plan to incorporate 200,000 affordable units over the next decade was approved by the NYC City Council in late March, the tax abatement relieving the astronomical costs of building on pricey NYC land, 421-a, expired in January.
A recent Real Estate Board of New York (REBNY) study of data from the New York City Department of Housing Preservation and Development (HPD) reveals that 421-a plays a critical role in the development of affordable housing units.
“New York is a city of renters and a city that continues to grow,” said John H. Banks III, president of REBNY. “It is clear that without 421-a, much less affordable housing will be developed, particularly in those areas of the city where it is most difficult to build.”
The analysis shows 98 percent of HPD’s designated affordable housing projects used some form of property tax benefit — though not necessarily 421-a — and in 2014, over 50 percent of affordable housing units used 421-a, specifically.
REBNY also revealed that less than 10 percent of affordable housing projects were union built.
The study references a report from the NYC Independent Budget Office (IBO), which shows the city would be required to pay $4.2 in additional funding for constructing 80,000 new affordable housing units.
Do tax breaks affect the boroughs differently?
In Manhattan, over 78 percent of affordable housing projects used 421-a between 2014 and 2015. Conversely, 26.2 percent of affordable housing projects were union built that year in Manhattan. Nearly 55 percent of the 68 affordable housing projects used 421-a to alleviate the costs of construction in Brooklyn, compared with just 4.8 percent union developments.
In Queens, nine affordable housing projects were built between 2014 and 2015. Almost half (44.4 percent) were built with 421-a, while 11.1 percent were union built. In the Bronx, 41 affordable housing projects went up in 2014, 17.1 percent of which were built with 421-a, and none of which were built by unions.
In Staten Island, just two affordable housing projects were constructed in 2014, half of which were built with 421-a. No projects in Staten Island were built by unions in 2014.
