State Budget Revives Controversial Tax Break for Developers

Lawmakers in Albany have revived a lucrative tax break real estate that developers say is key to building affordable housing in New York City.

The break, known as 421a, expired last year when the real estate lobby and labor couldn't reach a deal on wages. The new version — promoted by Gov. Andrew Cuomo and passed as part of the state budget — extends the length of the break for eligible projects to 35 years, and guarantees a wage threshold for workers: $60/hour in Manhattan; $45/hour in Brooklyn and Queens. 

Developers cheered the deal: The Real Estate Board of New York released a statement saying it will result in "substantially more" affordable rental housing than would otherwise be built. The Building and Construction Trades Council of Greater New York said it supports "good middle class jobs." And the de Blasio Administration, which was counting on the break as part of its housing plan, called it a necessary tool to address the city's affordability crisis. 

But critics of the break were livid, accusing lawmakers of siding with wealthy developers over the interests of tenants. "It is unconscionable that the state legislature passed this massive corporate welfare program at a time when we are facing draconian federal budget cuts, especially when study after study, and eviction after eviction case, shows 421a produces little affordable housing and instead leads to gentrification and deregulating stabilized apartments at alarming levels," said Delsenia Glover with the Alliance for Tenant Power.