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Atlantic Yards/Pacific Park graphic: what's built/what's coming + project FAQ/timeline (pinned post)

As Hochul proposes 421-a reforms (without offending REBNY), fewer middle-income "affordable" AY units? (A new path to condos, maybe.)

With the Affordable New York (aka 421-a) expiring this year as of June 15, that means that any new Atlantic Yards/Pacific Park building must launch by then to take advantage of those provisions, which provide tax abatements for buildings that include 30% "affordable" middle-income units, such as in Plank Road (B15) and Brooklyn Crossing (B4).

(That's the most common configuration, and most advantageous to developers, though configurations with greater affordability are possible.)

That also means that future towers must be planned with recognition of the financial considerations from the replacement for Affordable New York, one that's been under discussion for a while.

Well, this week, we learned what Gov. Kathy Hochul wants: reform, without offending the Real Estate Board of New York (REBNY), focusing on "deeper affordability," a recognition that the middle-income provision was way too generous. 

As I wrote last March for Bklyner:
In its recent fair-housing report, Where We Live, the de Blasio administration proposed restricting that option “in neighborhoods where market conditions allow for new housing development without it.”

That would “help promote the construction of more lower-income units in higher-cost, amenity-rich neighborhoods.”
Hochul's plan

Her 1/5/22 announcement said she'd be "Ending the 421-a tax abatement and establishing a new, more effective program." From her briefing book:
End the 421-a Tax Abatement and Establish a New Program That More Effectively Uses Public Dollars to Drive Affordability 
There is a critical need for affordable and market-rate rental housing in New York City. Real estate tax abatements have historically driven the development of new rental units across the city with 200,000 apartments105 currently covered by the 421-a program. Since 2010, nearly half106 of all new residential units built in New York City took advantage of this program, which has spurred housing construction and the creation of thousands of affordable units.

With 421-a set to expire in 2022, there is an opportunity to enact a different kind of abatement program that can continue to incentivize rental housing construction across New York City while creating permanent and deeper affordability and spending taxpayer money more efficiently. 

Governor Hochul will propose a new tax abatement that aims to achieve these goals:
  • Create deeper affordability that services lower income households than 421- a. 
  • Create longer-term affordability to provide more stability for low-income households. 
  • Ensure long-term availability of affordable rental units in neighborhoods across the city. 
  • Restructure the tax abatement to ensure maximum efficiency of taxpayer dollars.
  • Align with city and state climate goals by requiring carbon-neutral technologies, electrification, and electrification-ready building systems. 
  • Allow flexibility to enable construction of financially viable smaller buildings.
  • Create an all-affordable homeownership option to promote low- and moderate-income homeownership opportunities across the city.
(Emphases added)

Obviously, the devil's in the details (yet to be revealed, and negotiated), but the call for "deeper affordability" seems to recognize that "affordable" units at 130% of Area Median Income serve people who are, by New York City standards, better off.

Affordable condos?

Also note that the "all-affordable homeownership option" just might--who knows--help deliver the proposed/promised 200 "affordable" Atlantic Yards/Pacific Park condos, which have been promised--though the developer faces no penalties for not delivering.

Note that Hochul wants that option to reach low- and moderate-income households, while the project Development Agreement says the goal is to make the units affordable to families with incomes up to 150% of Area Median Income (AMI)--middle-income--while making some fraction available to moderate-income families with incomes below 100% of AMI.

The reaction

City & State reported that 421-a reform was not part of her speech.
The controversial tax exemption is unpopular among many progressive Democrats, but strongly supported by the politically influential real estate industry.

Already, housing advocates have criticized Hochul’s agenda on housing, particularly on revamping 421-a. “She tinkered at the edges of the 421-a program, while making it clear she will still send billions in tax abatements to corporate landlords,” Cea Weaver, campaign coordinator for the Housing Justice for All coalition, said in a statement. “Lipstick on a pig is still a pig: 421-a must be scrapped entirely.” On the other side of the housing fight, the real estate lobby praised Hochul’s decision to replace 421-a with something else.
amNY reported that "REBNY president James Whelan said the group is in support of the governor’s push for a new program which would place added emphasis on ensuring the availability of affordable housing." Hochul also offered a significant olive branch to real estate, allowing for increased residential density and encouraging the conversion of office buildings to housing.

Note that City & State's link in "controversial tax exemption" goes to 2017 coverage regarding the proposed revision of the law, not the impact of that revision.

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