Pointing to a shortfall in New York City’s supply of affordable housing units, the authors of an NYU research paper offered recommendations similar to an earlier tax plan from Governor Andrew Cuomo.
The study, which was written by experts from the university’s School of Professional Studies, recommended government assistance to renters, something that the governor proposed over a year ago.
“Direct assistance to renters in the forms of tax rebates or direct subsidies will be required to boost the supply of low- to moderate-income housing, not just for the non-working and underemployed, but for households whose combined incomes are as high as the low six figures,” the study read.
The study, entitled “New York City: The Great Reset,” contained an outline of the city’s recovery from the 2008 financial crisis.
It also included recommendations for solving New York City’s housing dilemma, with prescribed measures such as the rezoning of industrial areas and the creation of a range of affordable housing options through programs such as the 421-a tax break.
The paper primarily offered ways to stimulate the creation of affordable housing. However, its findings also unearthed an imbalance in the city’s tax policy.
Unlike developers and homeowners, renters have generally been exempt from tax breaks.
Developers get tax incentives in the form of programs such as 421-a and 421-g, which were introduced to boost the inventory of rent-regulated apartments.
Homeowners, on the other hand, get property tax relief from the STAR exemption program. At the close of the legislative session last June, state lawmakers also authorized $1.3 billion in reimbursements across the state.
The state does offer tax incentives for renters. However, the payout is low and few people are eligible for it. The program that is in effect only covers people with an annual income of up to $18,000 and pay rent at a rate of $450 or less.
For most who qualify, the endowment under the current tax incentive only goes up to $75 per year. That figure can increase to $375 per year for people aged 65 or older.
In January of 2014, Governor Cuomo proposed a tax break that would benefit tenants making less than $100,000 a year. According to state officials, about 80 percent of the 3.3 million renters in the state would be covered under the plan.
While the six figures threshold may inspire some objections, one of the report’s authors justified the number by saying that it is attainable in households with multiple people in the workforce.
“That probably looks generous depending on the size of the household… But our concern, frankly, was with the very poor who are making $30,000 or less,” said Rosemary Scanlon, the divisional dean of NYU’s School of Professional Studies Schack Institute of Real Estate.
The paper also revived some affordable housing strategies from past administrations.
“Private land trusts in underutilized neighborhoods could buy out existing landlords and provide neighborhood continuity for local business and residents as the city’s demand profile gradually shifts, eventually providing sites to builders of high-density, affordable walk-to-work housing, enabling and encouraging not just more construction, but more place-making,” the paper read.
According to Scanlon, a similar strategy was used by former New York City Mayor Ed Koch.
Koch, who served three terms from 1978 to 1989, invested billions of dollars in reviving abandoned homes in Harlem, South Bronx and Brooklyn.
The 10-year housing plan led to the creation of 150,000 affordable housing units.