Tuesday, June 26, 2007

City Limits explains the 421-a changes

There's no map (yet) of the exclusionary zones added to the 421-a reform legislation passed by the State Legislature last Thursday (but not yet signed by Governor Eliot Spitzer), but City Limits has a good article, headlined REDRAWING THE 421-A FORMULA FOR TAX BREAKS AND HOUSING, summarizing the law's multiple factors.

Along with the expansion of the zones where developers would be required to build affordable housing in exchange for a tax break, the bill features the notorious "Atlantic Yards carve-out" and, crucially for the real estate industry, an extension of the current law for six months--which should spark a frenzy of building, especially in Manhattan north of 96th Street and south of 14th Street, boundaries of the current exclusionary zone.

City Limits points out that some "healthy real estate markets," including Riverdale in the Bronx and downtown Flushing and Forest Hills in Queens are oddly left out of the zones and explains that city officials oppose some expansion of the exclusion zones because some neighborhoods would be taken off the list of those targeted for benefits.

More details

A summary of other details:
• A reduction in the AMI income threshold to 60 percent from the city’s 80 percent to qualify for affordable units (for every place other than Atlantic Yards);
• Reserving 50 percent of affordable units for "community preference," meaning for existing residents within the community board district;
• Building all affordable housing on the actual site where a building is being developed, thus eliminating the "certificates" granted to developers allowing them to build their required affordable component offsite;
• An extension of the certificate program for six months before ending;
• Rent stabilization of such units for 40 years; and
• Bolstering the city and state’s monitoring and enforcement practices.


And some criticisms:
State Senator Liz Krueger, the Upper East Side Democrat and ranking member of the Senate housing committee who had sponsored her own legislation, criticized several aspects, including: that only 20 percent of created units were required to be affordable instead of the 30 percent included in the original legislation; that they'll remain affordable for 40 years rather than in perpetuity; the special terms for Atlantic Yards; and that the certificate extension “allows the real estate industry to continue to operate under old, flawed rules during that time.”


So, will Spitzer ask for changes, including an elimination of special benefits for Atlantic Yards developer Forest City Ratner?

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