In a quiet move, Mayor Bill de Blasio’s office has added a new requirement to the 421a tax abatement program that now requires developers to set aside some affordable units for the homeless.
The City has not made any official statements on the matter, but The New York Times reported that city officials met with REBNY, developers, lawyers and marketing agents last week to explain the change.
Under the 421a tax program, developers are required to set aside 20 percent of apartments in a market rate building for low and moderate income tenant. Half are then distributed through a lottery system, and the other half for “community preferences,” which include local residents, elderly people, disabled people, and military veterans.
Although the 421a program expired earlier this year, many buildings that qualified ahead of the sunsetting of the program have yet to be built and would, therefore, be impacted by any changes to the tax abatement regulations.
The de Blasio administration wants to allot half of the community preference units to those living in homeless shelters.
“It’s unfair to change the rules of the game overnight for very little public benefit,” Extell’s Gary Barnett told the Times. “I think it would put the entire 421a program at risk, a program that has generated tens of thousands of affordable units.”
The article also reported that developers fretted about their buildings’ reputations, worrying that they would be damaged by the influx of tenants who had previously been homeless, and pointing out that the previously homeless tenants have special needs that the buildings aren’t equipped to address. City officials reportedly told the group of industry members that the apartment units would not go to those with social service needs, but instead those who had just been priced out of New Yorkʼs housing market.
Housing Commissioner Vicki Been told the group that the policy change was one of the ways the city is trying to address New York City’s homeless problem, and that those considered for community preference units would be employed people who had recently lost homes in areas where 421a buildings were located.
Douglaston Development’s Jeff Levine told The Times that he isn’t worried about the new rule.
“I don’t see a great exposure to us as landlords,” Levine told the paper. “I see this as helping the city deal with what is clearly a prominent issue today.”