While new construction around the city, except a significant chunk of Manhattan and the Brooklyn waterfront in Greenpoint-Williamsburg, currently gets a 25-year tax break as of right, the belated revision of the 421-a law would require 20% affordable units in exchange for the tax break for construction in the “exclusion zone,” which has been expanded to include Prospect Heights and several other neighborhoods.
The original “carve-out” would’ve given four or five Atlantic Yards condo buildings the 25-year tax break with nothing in return—in effect, grandfathering in Atlantic Yards while treating other developments in Jeffries' Prospect Heights district (and beyond) differently. The “compromise” shortens the tax break to 15 years.
"While the modification of the Atlantic Yards carve-out provision is a step in the right direction, I remain concerned that this project is treated differently than any other in the city,” Jeffries said in a statement. “Given the need for increased affordable home ownership opportunities in our community, I will continue to push the developer to build at least twenty percent of the apartments in each on-site condominium building in a manner that is affordable to working families and moderate income households.” Two weeks ago, he had called it “economic segregation.”
The bill seems like a done deal, expected to be signed next month by Gov. Eliot Spitzer. But Develop Don't Destroy Brooklyn argued, "Governor Spitzer should veto this bill as long as this indefensible, special and exclusive tax break for Forest City Ratner remains in the bill."
HPD lets it go
In an interview in this week’s New York Observer, conducted before the compromise was announced, Housing Preservation and Development head Shaun Donovan was asked about 421-a. His response:
We are in continuing discussions over that. The concern, one of the concerns that we have about the bill that was passed, is that it removes all of our flexibility to do moderate-income projects. It would require that every single project that gets 421a benefits, within the exclusion zones, to have a low-income component; and while our focus has been on low-income, we also have a significantly expanded middle-class housing initiative. Queens West is one example.
We’re also concerned about the exclusion zones. The South Bronx, for example, is clearly not an area where we think it’s appropriate to expand the exclusion zone. And then, third, we’re concerned about the level of benefits that the bill would provide to a hand-picked group of developers—the Atlantic Yards provision, which, by our count, gives $300 million in tax benefits to Atlantic Yards. Now, if we could solve the broader issue around middle-income housing, we could get to a solution that would reduce their benefits but also allow the project to proceed.
That’s a bit of a non sequitur. Yes, some 900 of the 2250 subsidized Atlantic Yards units would be middle-income housing, for families of four earning from $70,900 (100% of Area Median Income, or AMI) to $113,440 (160% of AMI).
But Donovan sounds like he’s saying Atlantic Yards would’ve been stalled without the tax break. If that’s the argument, then: show us the numbers. He still hasn’t justified why Atlantic Yards would get special treatment.
The busy Matthew Schuerman of the Observer got hold of Assemblyman Vito Lopez, architect of the 421-a revision, who declared himself “happy—not ecstatic—on the compromise,” which significantly extended the exclusion zone beyond the city’s bill.
“My objective in passing this bill was to provide some form of defense against gentrification of poor and working-class neighborhoods. I believe we have accomplished that,” Lopez told the Observer.
(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 in exchange for onsite units. And the zones in yellow were added by the State Legislature, extending through the five boroughs.)
Schuerman also noted that, while the tax break would last 25 years, the low-income units would be kept affordable for 40 years, a jump from the previous 25 years, but HPD scaled it back to 35 years in the compromise.