Out With a Whimper

The controversy over tax incentives for affordable housing began with a bang this week when the Independent Budget Office issued a report concluding that paying prevailing union wages adds 13% to the cost of construction. It ended with a whimper today as it appeared the 421a tax incentive will expire. The State Legislature had punted the issue of how to pay prevailing wages and still afford to build under the program to REBNY and the Building Trades–who couldn’t figure it out either.

The City and State are still willing to throw public money at the housing shortage. On Monday, the Mayor touted City financing for the construction or preservation of 40,000 units since he took office, including 21,000 in 2015. Two thirds of those units are so-called preservation units such as the thousands “preserved” at Stuyvesant Town that were already subject to rent regulation.

Wednesday, Governor Cuomo proposed spending $10 billion to build or preserve 100,000 units of affordable housing by 2020. It was part of his State of the State and Budget Message that included about $100 billion in capital spending proposals but was vague on funding sources.

Following last week’s Appellate Division decision affirming an $876,619 overcharge award, including treble damages, State Legislators are proposing to up the ante with a bill to provide for quintuple damages.

CHIP and ABO are sponsoring a new Registered in Apartment Management class beginning Tuesday. Contact brent@registeredmanager.com for details.

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