Statement from Comptroller Brad Lander on Governor Hochul’s Proposed 421-a Reforms

(New York, NY) — NYC Comptroller Brad Lander issued the following statement in a response to Governor Hochul’s proposed reforms to the 421-a tax abatement program:

“The 421-a program is an obscene tax giveaway for market rate housing in the name of affordability, and slightly altering its numbers and letters won’t change that,” said Comptroller Brad Lander. “It makes sense to offer tax incentives for affordable units, but providing full 25-year tax breaks to four luxury units for every one affordable unit, without an underwriting analysis to see if it’s even needed, results in tax giveaways that are far too large.

“The new outer-borough condo option is especially concerning. It would provide a full, 40-year tax exemption for housing that’s only affordable to households earning 130% of the area-median income, which is $155,090 for a family of four. Not one single unit in these developments would be affordable to the approximately 75% of New York City households who make less than that.

“There is a better way forward. First, we should end 421-a.

“Second, we should reform our property tax system to create parity between rentals and condo developments. Developers are right that our current system strongly disincentivizes new, multi-family rental development in New York City – we can and should fix that. But the new outer-borough condo option actually makes that problem much worse.

“Third, we should scale affordable housing tax benefits to match the actual affordability provided. That way, we’ll be getting our money’s worth in depth and length of affordability.

“The new proposal also contains a Trojan horse for workers,” continued Comptroller Lander. “The current 421-a program requires that building service workers be paid the prevailing wage in any building with more than 30 units — but the new proposal would increase that ten-fold to 300 units, dramatically reducing the number of buildings which would be covered.

“Many of the prevailing wage cases brought to the Comptroller’s office in recent years are on behalf of building service workers in buildings with fewer than 300 units. We’ve been able to investigate and win recourse for them when they’ve been underpaid. The new proposal would deny the vast majority of them any recourse.”

UPDATE (1/20/22, 8:00 PM) — The Comptroller’s office was informed by the Governor’s office that changes to prevailing wage requirements from buildings with over 30 to over 300 units were a drafting error and will be corrected in the 30-day amendments.

###