Billionaire's Boondoggle or Essential Tax Credit? More Debate Over 421-A

Tenant advocates rallied outside of city hall Thursday to call for an end to the 421-A tax abatement. The controversial program offers real estate developers tax abatements for up to 25 years, sometimes in exchange for building affordable housing.

"It's pretty hard to find out exactly what was given and what was got for the 421-a program, because it's not tracked very carefully, probably because the numbers are really embarassing," said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development, ANHD. 

According to new research from ANHD, in fiscal year 2013 the 421-a program cost New York city $1.1 billion but netted just over 13,000 affordable rental apartments.

The New York city council committee on housing and buildings heard several hours of testimony about the program after the rally. At times, the discussion was tense as council members sparred with Vicki Been, commissioner of the Department of Housing, Preservation and Development. 

"421-a has failed my community. It has displaced many residents in my community while allowing for developers to outright steal the show; there's luxury development happening left and right," said Williamsburg area councilman Antonio Reynoso.

The councilman added that he had been hoping the Mayor Bill de Blasio's Administration would have joined with him in calling for an end to the program. 

"It should not be renewed, and I don't think that's something that the administration seems to be in agreement with," said council Jumaane Williams, chair of the city council's committee housing and buildings.

The mayor must walk a fine line, because the decision is ultimately out of his hands. Whether the program stays in place will be decided by the state legislature, that must re-approve the program or it will sunset in June. At the hearing, HPD commissioner Vicki Been detailed how the program should be changed, but refused to condemn it.

"We're entering into discussions obviously, with Albany and a lot of stakeholders, and I don't think it's a productive line in the sand to draw," said Been.

Another problem for the de Blasio Administration is that it needs developers building rental units if it is to meet its ambitious affordable housing goals, of creating or preserving 200,000 units within the next decade. The real estate industry has said that without the program far fewer rental units will get built.

"In Manhattan and most areas of north Brooklyn and western Queens [eliminating 421-a] will dictate as of right condo development and as a result much less affordable housing, too," said David Lombino, director of special projects at real estate development company Two Trees Management.

FINAL 421-A Hearing Powerpoint