Mayor de Blasio, with a goal to keep or create 200,000 affordable apartments, has moved closer to the city’s real estate industry by refusing to call for expiration of the 421-a tax abatement program.
The program costs the city $1.1 billion in tax revenue every year. The tax break law was passed over 40 years ago when people were fleeing the city for the suburbs and developers had no incentive to build in the city. The law requires developments in areas to set aside 20 percent of the apartments as affordable in exchange for a property tax break. The state legislature had until June 15 deadline to extend it, change or let it expire.
In fiscal year 2013, the 421‑a program created few affordable rental apartments in exchange for the $1.1 billion property tax abatement. The law benefits penthouse swimming pools for billionaires as well as apartments for the middle class.
The mayor has pushed for modification of the law to require developers to set aside more affordable units for working‑class citizens. He traveled to Albany to sell his ideas to lawmakers but Governor Cuomo criticized him for complicating efforts to revise the program.
Governor Cuomo said, “You can’t come up with a resolution in [a] few days, and I am not going to.” In 2015, people are fleeing the suburbs to live in New York City, and despite the 421-a law, rents are beyond the reach of working people. This expensive tax break for the wealthy should be allowed to expire.
Would rents for one-bedroom apartments in Manhattan average of $3,039 a month if the law helped? The fact that developers are advocating for the continuation of it while housing advocates are advocating for its expiration tells any reasonable person that it is the developers who benefit from the law. Rents are truly “too damn high” when the average rent of a one-bedroom apartment is greater than the median income of an average family in New York City.
Brooklyn’s median rent jumped 5.6 percent from 2014 to a record of $2,961 a month. Developers in Brooklyn — including Ofer Cohen, Boaz Gilad, David Kramer and David Schwartz — traveled to Albany to lobby State Senators Martin Golden and Simcha Felder for an extension of the law.
While the developers went to Albany, tenant advocates rallied outside of City Hall to call for an end to the 421‑a tax abatement law. Meanwhile, builders are rushing to begin projects in order to be eligible for the 421-a tax abatement. It is amazing how philanthropic real estate developers can be when they can get a $1 billion tax break reward for themselves.
Some developers, under the law, can also get extras like permission to add square footage to a project while others can get the tax abatement, as of right, even when no affordable units are included in the project. In many ways, the 421-a law has failed the people it was supposed to help. It created demand for projects which displaced long-term residents from communities and provided more benefits for developers than for working people.
In Washington, D.C., another little known and little understood piece of law — the Trans‑Pacific Partnership (TPP) — is being debated. The White House has supported its passage. WikiLeaks published sections of the secretive treaty that indicate it would give big pharmaceutical corporations more control over access to medications and weaken public healthcare programs.
President Barack Obama went to Capitol Hill to push for passage of the treaty. The House overwhelmingly rejected it. However, the most controversial element of the package — a Trade Promotion Authority bill, giving a president “fast‑track” authority to submit deals like the TPP to Congress for a vote, without opportunity for amendment — passed by a narrow margin.
That yes vote is meaningless since procedural rules connect the Trade Promotion Authority bill to a Trade Adjustment Assistance bill, which was defeated in the House 302‑126. The TPP package will only pass in Congress if Democrats and some Republicans have their minds changed before a re‑vote.
This corporation-friendly treaty has allied Mr. Obama with Congressional Republicans. House Republican leaders are calling for a re‑vote and say they may delay a final vote to give Mr. Obama more time to lobby House Democrats.
The U.S. trade representative has stated, in essence, that the contents of the TPP agreement cannot be revealed because it would create political complications for the negotiation of the treaty! This alone is enough for any citizen to oppose the TPP. You can be sure that in the end its passage will give a corporation more rights than a citizen.