The Albany real estate tax code 421-a was drafted decades ago and, in 2015, Governor Andrew Cuomo decided not to renew it. Because the code is a part of Albany’s affordable housing plan, its revival is being discussed. The idea has not resonated with the citizens of Albany, however.
Initially, Cuomo let 421-a expire because NYC Mayor Bill de Blasio’s idea to append a tax on luxury developments to the code which was supposed to be designed to provide more affordable housing. To some Albany lawmakers, the expiration was nothing more than an attempt to escalate the already seething tension between Cuomo and de Blasio.
Legislation based on Cuomo’s revival of 421-a was introduced in January of this year, but de Blasio returned fire, saying the archaic law was based on a “broken system” that should be abandoned in place of new, more current real estate regulations.
Cuomo claimed that the new version of the old law, which he named the “Affordable New York Housing Program” would result a total of 9,000 new apartments per year. Whether or not this would make much of a dent in regards to New York’s population growth is yet another question on the minds of taxpayers.
Union members are pleased with news of a better living wage for those working on new real estate construction, but members of the Democratic Assembly believe that the people of Albany should have been invited to negotiations on policy regarding 421-a. They mention the issue of oversight, and argue that the new regulations could be subject to corruption during implementation.
Naturally, Republicans have taken the opposing stance. According to them, the expiration of 421-a has cost the city over $1 billion that could have been spent on new housing projects. Both sides are seeking to resolve the current stalemate by the time the new budget is due next month. The real issue with the law right now is that it provides subsidies without considering rent stabilization in the future.
New York City’s code is facing less scrutiny.
President John Banks of the Real Estate Board of New York (REBNY) believes that 421-a will eventually be reinstituted as law. “I’m pretty confident, now that we have an agreement between the governor, the Buildings and Construction Trades, and REBNY, that the package we negotiated with the governor’s leadership will ultimately get passed,” he said.
The core principles of the law remain the same. Most importantly, rental units must remain affordable for no fewer than forty years. Also, the wages and benefits of construction workers must be boosted in order to foster a better understanding and relationship between real estate projects and the workers who build them.
Those who believe they may be affected by 421-a or other real estate laws in the works are urged to call an Albany real estate lawyer to discuss what the various proposals mean for their properties or investments. Anyone with concerns is also urged to voice them to Governor Andrew Cuomo’s office.