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.
As the three year extension of the program terminates at the end of this year, the time has come to ask the question again: Where does the 421-a program go from here? The market is in a different place, but most of the decision-makers are the same.
Earlier this month, Assemblyman Vito Lopez, Chair of the State Assembly’s Housing Committee, held a hearing to discuss the future of the program.
According to the New York Observer, the hearing was not well-attended and did little to advance the discussion – Assemblyman Lopez called for more affordable housing requirements, a representative from the Real Estate Board of New York (a pro-developer industry organization) called for greater tax relief for developers, and HPD Commissioner Rafael Cestero called for a continuation of the program with minor tweaks.
Where it all goes from here is unclear. If the past is any indication, as the deadline nears, there will be a flurry of activity, there will be some changes made to the program, no one side will get everything they want, and the program will continue.
We are actively following the debate and will keep you posted.