The Independence Party of New York, a centrist political organization, is backing a bill that would replace the 421a tax abatement, which expired in January following a fall out between the real estate industry and organized labor.
State Senate Republicans introduced the legislation Monday that would create what’s being called 421aa. The bill requires any developer building a New York City structure that benefits from the tax break to create a higher percentage of affordable units than the pre-existing guidelines called for. Construction workers would also be paid $21 an hour as part of the bill, titled S.8133, and $55 an hour on projects in Manhattan south of 96th Street that contain more than 300 units by the year 2020. (421a didn’t have a prevailing waged attached to it.)
“Producing new, affordable or below-market rental housing is one of the most pressing needs that New York City faces,” reads the memo circulated to all 231 state senators and assembly members today and obtained by Commercial Observer. “Two-thirds of the housing in New York City is rental. The city’s population continues to grow, surpassing previous highs. Similarly, there are more New Yorkers employed today than at any point in the city’s history.”
The memo goes on to note that half of the New York City affordable housing units created in the last two years were through 421a. Edward Miller, the chairman of the Independence Party’s issue committee, told CO that the city was at risk of not creating more below-market apartments because the tax break has been expired for almost six months.
The Real Estate Board of New York and the Building and Construction Trades Council of Greater New York had until Jan. 15 to agree on a prevailing construction wage in the Big Apple. The continuation of 421a relied on both sides coming to a deal by that time.
The Independence Party memo supported the salary guidelines laid out in the bill, which would have to be passed before the six-month legislative session concludes tomorrow. Miller said legislators are weighing discussing the bill by that time.
“I know they’ll be looking at it heavily on Thursday,” he said.
REBNY has come out in favor of the bill introduced this week by Republicans, which hold a slim majority in the State Senate. Talks between the lobbying arm of the real estate industry and organized labor have been at a virtual standstill as the legislative session enters its final days. John Banks, the president of REBNY, told The Real Deal in a statement yesterday that the new program would create more affordable housing than 421a, which only required 20 percent of a project’s units be designated affordable.
The bill has not been as well-received by Democrats, which control the Assembly. A spokesman for Assembly Speaker Carl Heastie said the 421aa bill is a “non-starter.”
Building and Construction Trades Council President Gary LaBarbera was not immediately available for comment on the Independence Party’s backing of the legislation. The union leader has thrown cold water on the floated bill, telling TRD yesterday that the wage component of 421aa was particularly troublesome because the proposed $21 to $55 per hour is too low.
“Thank you for giving the workers the minimum wage,” LaBarbera told the paper. “Are they really that out of touch?”
Cuomo’s office did not immediately return a request for comment.