SUBJECT:

PURPOSE:

The 421-a real property tax exemption was enacted in the 1970s. It was designed to encourage the creation of multi-unit dwellings in a time when New York City's residential housing market was in a crisis. The residential housing shortage has persisted to the present and has skewed the marketplace for housing to the detriment of moderate/middle income tenants.

According to a recent study by the Pratt Center for Community Development and the Habitat for Humanity - New York City, the 421-a program will cost the City of New York $320 million this year. The Pratt report along with several news articles have suggested that the 421-a program has outlived its usefulness and has simply become a means by which to subsidize the creation of luxury apartments.

The purpose of this hearing is to review the merits as well as the need for the 421-a program. The hearing also seeks public input on viable proposals to enhance the 421-a program in such a way as to address the affordable housing crisis and/or to find alternative solutions for this most serious problem.

In addition, the hearing gives the public a forum in which to comment on Assembly Bill 10912 (companion bill S. 7884).

Persons wishing to present pertinent testimony to the Committee at the above hearing should complete and return the reply form as soon as possible. It is important that the reply form be fully completed and returned so that persons may be notified in the event of emergency postponement or cancellation.

Oral testimony will be limited to ten minutes duration. In preparing the order of witnesses, the Committee will attempt to accommodate individual requests to speak at particular times in view of special circumstances. These requests should be made on the attached reply form or communicated to Committee staff as early as possible. In the absence of a request, witnesses will be scheduled in the order in which reply forms are postmarked.

Ten copies of any prepared testimony should be submitted at the hearing registration desk. The Committee would appreciate advance receipt of prepared statements.

In order to further publicize these hearings, please inform interested parties and organizations of the Committees' interest in hearing testimony from all sources.

In order to meet the needs of those who may have a disability, the Assembly, in accordance with its policy of non-discrimination on the basis of disability, as well as the 1990 Americans with Disabilities Act (ADA), has made its facilities and services available to all individuals with disabilities. For individuals with disabilities, accommodations will be provided, upon reasonable request, to afford such individuals access and admission to Assembly facilities and activities.

SELECTED ISSUES TO WHICH WITNESSES MAY DIRECT THEIR TESTIMONY:

1. Should the 421-a real property tax exemption be eliminated and, if so, why?

2. If the 421-a program is permitted to sunset next year, what impact would it have on the creation of affordable housing units and on residential units in general?

3. Have there been proposals by the Mayor's office to revise the current 421-a program so as to require a greater percentage of affordable housing for each eligible project?

4. What are the primary obstacles to modifying the 421-a or any other real property tax incentive offered in NYC to encourage the creation of affordable housing?

5. Who and where are the primary beneficiaries of the 421-a exemption?

6. It would appear that the term "affordable" is distorted under the parameters of the 421-a exemption (e.g., households may be required to make as much as $100,000 annually), what measures should or could be implemented to address this dilemma?

7. It's estimated that 80% of the building service workers in NYC receive prevailing wage, yet, 50% of the service workers that are employed in buildings that have received the 421-a tax abatement are not. Why is there a discrepancy? What can be done to ensure that building service workers in 421-a buildings receive a fair wage?

PUBLIC HEARING REPLY FORM

Persons wishing to present testimony at the public hearing on the Real Property Tax Exemption 421-a and its correlation to affordable housing are requested to complete this reply form as soon as possible and mail it to:

Caryn Canfield
Committee Assistant
Assembly Committee on Housing
Room 513 - Capitol
Albany, New York 12248
Email: canfiec@assembly.state.ny.us
Phone: (518) 455-4355
Fax: (518) 455-4128

I will address my remarks to the following subjects:

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