New York State Assembly Housing Committee Chair Keith Wright. Image credit: The Office of Assembly Member Keith Wright
The bill seeks to fill the gap left open by the expiration of 421-a, the decades-old tax exemption program that expired on January 1, 2016. On March 15, 2016, New York State Assembly Housing Committee Chair Keith Wright, who represents Manhattan, introduced Assembly bill A9537, which would provide for new, taxpayer-funded affordable housing subsidies and job training programs. If enacted, the bill would incentivize the construction of affordable housing and affordable senior housing through subsidies, rather than tax exemptions.
The proposed Emergency Affordable Housing Construction Act would subsidize the creation of affordable housing and senior housing throughout New York City. The Act would create an “Emergency Affordable Housing Construction Fund” to supplement the construction of affordable residential rental units reserved for families earning incomes up to 70 percent of the “area median income,” or AMI. The Act would increase the amount of State tax credits available for 100 percent affordable residential buildings with a minimum of one-third of their units available to families earning up to 30 percent AMI and no units available to families earning over 70 percent AMI.
The Act would incentivize the construction of affordable senior housing by increasing the tax credit available for 100 percent affordable senior housing buildings and providing an additional subsidy to buildings that provide on-site health, wellness, and case management services. Further, the Act would establish and authorize funding for a new job training program to be implemented by the New York State Department of Labor.
Committee Chair Wright’s proposed subsidy program is in stark contrast to the expired New York Real Property Tax Law section 421-a, most commonly referred to as “421-a,” which is the State-authorized, City-implemented tax exemption program responsible for the Citywide residential construction boom that has been ongoing since the 1970s. The 421-a program provides New York City property tax relief. Developers seeking to avail themselves of 421-a’s benefits need only build affordable housing if they are constructing new residential units within the “Geographic Exclusion Area,” or GEA, which is comprised of the Manhattan core—spanning from 14th Street to 96th Street.
The 421-a program expired on January 1, 2016. When the State re-authorized the City to implement an amended version of the 421-a program in June of 2015, it only extended the existing program until the end of 2015. For CityLand’s full coverage on the State’s re-authorization legislation, click here.
The proposed Emergency Affordable Housing Construction Act aims to “fill the void” left by the expiration of 421-a, but it does not seek to replace it. In the event that the 421-a program is resurrected by the State legislature, the two programs would co-exist simultaneously. Committee Chair Wright’s proposed subsidy program would provide a State-funded subsidy, regardless of whether the project sites are located within the GEA, while the 421-a program would provide a New York City tax exemption. Senior staff at Committee Chair Wright’s office confirmed that developers of projects meeting the eligibility requirements for both programs would have the opportunity to capitalize on the benefits of each simultaneously.
“The Emergency Affordable Housing Construction Act will bring relief to our neighborhoods, bolster local economies, bring jobs to the community and protect the longevity and fabric of our cities,” said New York State Assembly Housing Committee Chair Keith Wright.
The Legal Aid Society has also voiced its support for Committee Chair Wright’s proposed bill. “We are especially pleased that the bill would create a State Section 8 program to ensure that the lowest income New Yorkers can obtain affordable housing,” said Adriene Holder, Attorney-in-Charge of the Civil Practice of The Legal Aid Society.
Committee Chair Wright’s bill was referred to his own Housing Committee, however no date has been set yet for a Committee hearing.
New York State Assembly: Emergency Affordable Housing Construction Act , A09537 (March 15, 2016).
By: Jessica Soultanian-Braunstein (Jessica is the CityLaw Fellow and a New York Law School Graduate, Class of 2015)