David Yassky

New York City 421, a property tax exemption program, was designed to promote affordable housing in multi-family residential construction. I proposed “421-a Comprehensive Reform Act of 2006” because it has wasted hundreds of millions of taxpayer dollars, created very little affordable housing, over-subsidized luxury developments and fueled gentrification.  

This reform act will allow the tax exemption only if the building includes permanent, affordable housing on-site for low-income families, with 30% of the units affordable to families earning no more than 50% of the area median income. The proposed reforms will also generate significant new revenue for the City since developers of exclusively market-rate housing would now pay their taxes instead of receiving exemptions for 10-15 years.

Initial estimates suggest that the new revenue would total $2 - $5 billion for new construction over the next 20 years. At least half of this new revenue should be dedicated to the City's Affordable Housing Trust Fund to create or preserve affordable units around the city. This could be done by creation of PILOT (payment in lieu of taxes) through legislation in Albany. Taxes from new development would be paid into the PILOT and distributed evenly to the City’s Affordable Housing Trust Fund and the City’s general fund. Alternately, the city could make a one-time transfer of at least $1 billion, half of the conservative estimate of new revenue, to the NYC Housing Development Corporation. A portion of the revenue would be committed to insure that neighborhoods now receiving 421-a “negotiable certificates” would continue to receive an equal or greater amount of affordable housing investments from the dedicated fund.