Wednesday, June 27, 2007

The 421-a map emerges--shocker?

So this is what the New York Daily News, City Council Speaker Christine Quinn, and some others are so shocked by.

The New York Observer yesterday published the map of the proposed expansion of the 421-a exclusion zone--where developers would have to construct 20% affordable housing (for households with incomes up to 60% of area median income, or AMI) in exchange for tax breaks. The map comes via the Pratt Center for Community Development.

The maroon area, in Manhattan, was added in the 1980s to require affordable housing (achievable via a certificate program in low-income neighborhoods, typically in the Bronx) as a tradeoff for new construction The rust color indicates the areas--notably Brownstone Brooklyn, Greenpoint/Williamsburg, the Queens waterfront, Lower Manhattan, and parts of Harlem--added last December by the City Council (which eliminated the certificate program).

And the zones in yellow were added by the State Legislature. Missing from the map, of course, is the outline of the Atlantic Yards project, which gets a special exemption.

The expansion

Several members of City Council wanted the so-called "exclusion zone" expanded citywide, and Assembly Housing Chairman Vito Lopez, who also chairs the Brooklyn Democratic Party, also wanted the zone expanded.

It's notable that Lopez did not expand the zone to middle-class neighborhoods in central Queens, southern Brooklyn, and Riverdale, where 421-a probably distorts the market. Clearly he was particularly concerned about the areas around his Bushwick/Williamsburg base.

As I wrote, I think it's a victory to have continued to expand the zone. Still, critics who point to the absence of transparency--on both the boundaries and the "Atlantic Yards carve-out"--deserve attention from Gov. Eliot Spitzer before he signs the bill. It's not too late to order a revamp.

Development effects

The Observer noted:
The new policy is likely to slow development in the earth-toned areas and keep it pretty much as it is in the gray parts.

That may well be true, but there are numerous other factors--zoning, cost of materials, etc.--that affect development. So the question is not so much whether the absence or presence of the tax break would affect development, but whether it would distort appropriate development.

If Spitzer signs the bill, it would go into effect July 1, 2008. That gives the real estate industry, which apparently cared much more about the six-month extension (from a planned end-of-2007 deadline passed by City Council) than the expansion of the exclusion zone, to take advantage of the tax break at sites in Manhattan.

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