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Cuomo Reaches Deal with Real Estate Board of NY to Revive Property Tax Break

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Governor Cuomo reached a deal between the Real Estate Board of New York and the 100,000 members of the Building and Construction Trades Council of Greater New York to revive the 421-a property tax break

On Thursday November 10, Governor Andrew Cuomo reached a deal between the Real Estate Board of New York and the 100,000 members of the Building and Construction Trades Council of Greater New York to revive the 421-a property tax break. In June 2015, the previous 421-a plan, giving developers a tax break in return for setting aside affordable housing units, expired. The negotiations between developers and unions took more than a year. Cuomo attached a required standard wage for construction workers which stalled discussions beyond the January 15 deadline.

As reported by Crain’s New York, in the final agreement, the required average wage for construction workers was set to $60 an hour (including benefits) for Manhattan projects with more than 300 rental units. In Waterfront Brooklyn and Queens neighborhoods, the average wage for similar sized projects was set to $45 an hour. In exchange, developers who set aside affordable housing units were rewarded with tax breaks for 35 years.

In the previous plan developers received tax breaks for only 25 years. Income limitations on affordable apartments will be extended to 40 years. “We applaud Gov. Andrew Cuomo and his administration for bringing all parties together to finalize an agreement on an important public policy that will allow for the development of critical affordable housing, and establishes wage standards for construction workers in New York,” said Gary LaBarbera, President of the Building and Construction Trades Council.

The agreement now awaits approval from the state Senate and Assembly. In January Cuomo outlined a five-year plan that dedicated $20 billion to affordable housing, of which $2 billion would be for this year. Legislative leaders didn’t sign off on the agreement in April because the affordable housing development was expired. As per the Commercial Observer, affordable housing advocates are now hoping for a speedy approval and the $2 billion in statewide affordable housing funds. If passed, the deal brokered by the Cuomo administration will give the de Blasio administration a boost, bringing it closer to its goal of reaching 80,000 units of affordable housing.

“The deal reached today between these parties provides more affordability for tenants and fairer wages for workers than under the original proposal,” said Gov. Cuomo. “While I would prefer even more affordability in the 421-a program, this agreement marks a major step forward for New Yorkers. I urge the legislature to come back to Albany to pass desperately needed affordable housing and to sign the MOU to release these funds. We simply cannot allow the lack of resolution to stall affordable housing production for years to come. There is no excuse not to act.”

By: Ilana Siyance

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