421a Stalemate Over: Agreement Between REBNY and BCTC Paves Way to Reinstatement of Program

An agreement on a key component to the renewal of the 421a program was reached yesterday between the Real Estate Board of New York (REBNY) and The Building and Construction Trades Council of Greater New York (BCTC). The program expired last January, after REBNY and BCTC failed to reach an agreement on minimum wages for construction work on projects benefiting from the program.

The agreement calls for eligible buildings in Manhattan to pay on average an hourly wage of $60 (includes wages and benefits), with eligible buildings in Brooklyn and Queens paying an hourly wage of $45. The minimum wage obligation would apply to buildings with 300 rental units or more in Manhattan south of 96th Street and in Brooklyn and certain part of Queens Community Boards 1 and 2, nearer the waterfront. The new deal would extend the length of the tax exemption to 35 years. In return, affordable apartments must stay affordable for 40 years, up from 35 years.

Reinstating the 421a program would require legislation be passed in Albany. Governor Cuomo has released a statement endorsing the deal reached between REBNY and BCTC and has called upon the Legislature to return to Albany to “pass desperately needed affordable housing.”

We are following these ongoing developments very closely and will keep you updated.

421-a Program: What Does the Future Hold?

421aCrystal Ball

Picture it: City and State lawmakers racing against the sunsetting of the 421-a law to modify and extend the program.

While it may seem like only yesterday, this scene actually played out three long years ago; and is likely to reenact itself in a few short months.

At the end of 2007, the market was still trending upwards (the fall of Lehman in October 2008 was months away) and the overall tenor of the debate was not if the program’s benefits should be limited, but by how much.  In the end, the program was extended for three years, the exclusion zone was expanded, negotiable certificates were essentially eliminated, and benefits were capped based on assessed value. Continue reading