Mayor de Blasio’s Affordable Housing Campaign Causes Tax Credit Problems

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HAUPTMAN
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HOST INTRO: Mayor de Blasio is running on a campaign of creating more affordable housing. The main way that happens is through giving developers tax breaks for providing affordable housing. But enforcement has been tricky and a recent audit says the city may have given away more than $2 billion dollars in these tax credits with little to show for it. Now, Governor Cuomo has a new proposal on the table. Max Hauptman reports.

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HAUPTMAN 1: On Fleet Place in Downtown Brooklyn, a 32-story condominium is going up. A lottery is open until March for nearly 30 affordable rate apartments. Those who win could pay as little as $850 dollars a month for a studio. And the developer will get a tax break to make sure this happens. Now, there is an new proposal to manage how these tax breaks are regulated.

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Erica Buckley is a former chief of the New York Attorney General’s Real Estate Finance Bureau. She now specializes in real estate law and government practice. (0:24)

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BUCKLEY 1: So this just makes the previous version of the law that was enacted effective, so there’s pretty much an affordability requirement across the board for most projects. (0:12)

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HAUPTMAN 2: Affordable New York – which is being championed by Governor Cuomo replaces 421-a – the tax exemption New York developers could apply for if they were building in the outer boroughs or northern Manhattan. According to developers, these exemptions create incentive to build. But affordable housing advocate Jeff Maclin disagrees.. (0:22)

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MACLIN 1: Back in the 70s and 80s there was a dearth of affordable housing and you needed some lever to get the real community and developers to build affordable housing. Now it’s more of a gimme, a giveback, a perk for the development community. (0:15)

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HAUPTMAN 3: The old tax exemptions expired last year, and since then the city, state, and developers have been at an impasse. Now, in a move that some see as a challenge to Mayor de Blasio, the Governor’s office is taking the lead and putting forward a proposal that offers a few changes to the old tax law. Buckley says a key part of the new law is keeping a closer eye on developers….(0:18)

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BUCKLEY 2: That requires both city and state agencies to work together to make sure that laws are properly adhered to and that, you know, benefits are properly administered. (0:10)

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HAUPTMAN 4: In the past, developers that applied for the 421-a exemption were granted tax subsidies as soon as construction began. Under Affordable New York, those benefits only kick in once a building is complete and tenants have moved in. Two city councilman want to ensure that the city conducts annual audits of 20% of buildings receiving tax subsidies to ensure compliance. Buckley says these proposals would be critical in ensuring that the city is able to guarantee affordable housing for it’s residents.

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BUCKLEY 3: I’m a firm believer in, you know—we need to keep building. We need more housing, because we have so many people that are underserved (0:07)

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WATERS 1: It’s not really affordable, it’s not really relevant to meeting the city’s major housing needs. (0:06)

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HAUPTMAN 6: Governor Cuomo’s proposal has met with some pushback, though. A recent press release from the Mayor’s office reads, “Albany needs to make good on the reforms we secured to the old broken 421-a program; no tax breaks for luxury condos.” Tom Waters is an affordable housing policy analyst and agrees that providing affordable housing remains a problem for the program.

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WATERS 1: It’s not really affordable, it’s not really relevant to meeting the city’s major housing needs. (0:06)

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HAUPTMAN 7: Waters also adds that, despite the recent proposals by the City Council, enforcement remains an issue.

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WATERS 2: There’s been very little enforcement, partly because the city and state agencies each think it’s the other one’s job. (0:07)

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HAUPTMAN 9: Until the State Assembly votes on Governor Cuomo’s proposal, providing affordable housing for New Yorkers will remain a contentious issue. Max Hauptman, Columbia Radio News. (0:09)

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