Mayor Bill de Blasio has proposed changes in New York’s housing laws aimed at preventing deregulation of even high-rent apartments and limiting rent increases when stabilized or controlled units become vacant. This follows a push by a union-affiliated campaign for the abolition of the 421-a tax abatement, originally intended to spur construction of low-income housing but now used to finance luxury towers like One West 57th Street, where a condo recently sold for $100 million. Unless Albany intervenes, both rent regulation and the 421-a law will expire this June, prompting Governor Andrew Cuomo to warn of “immediate mass mayhem” in the form of evictions and rent hikes. Developers warn that, without a tax break, little housing will be built at all, threatening de Blasio’s goal of building 80,000 new low-income units.
With so much at stake and so many players at the table, a compromise is inevitable—but who will be subsidized by whom, and for how much?
The Facts You Need to Know
The Frozen City: Because of rent regulation, Gotham’s housing turnover rate is by far the lowest among the nation’s big cities. An end to regulation would mean higher rents in high-income neighborhoods, but could also lead to higher property tax revenues that could support other services. Read more
421-a Fact-Check: Some 150,000 housing units qualify for the 421-a tax abatement, which costs the city more than $1 billion annually in foregone tax revenue. But a change in the law enacted in 2008 ended a program that permitted construction of more low-income housing units at a lower cost in tax abatements. Read more
How To Spur New Construction: The real way to spur development of low-income housing in New York City is not targeted tax abatements, but overall property tax reform. Read more
The Past is Present
Gotham hasn’t had a functional housing market in nearly a century, because generations of New York politicians, confusing rational housing policy with utopian social policy, won’t trust the market to do its job.
On The Calendar
The Alexander Hamilton Award was created by the Manhattan Institute to honor those individuals helping to foster the revitalization of our nation’s cities. This year, the winners are George Kelling, co-author of the Broken Windows Theory, and Eva Moskowitz, Founder and CEO of Success Academy Charter Schools. Click to purchase tickets.
And in other news...
A man stole a flower-shaped crystal from an Upper East Side mineral store Monday and then mysteriously returned it about five hours later, according to the NYPD.