A key housing tax break is “dead and will not be revived,” the head of the building trades union said Monday.
The 421-a tax break expired last month after the real estate industry and the unions failed to reach a deal on wage requirements at projects getting the money in time for a deadline imposed by the state.
“After exhaustive good faith conversations had over the last seven months, it is clear that 421a as we know it is dead and will not be revived,” said Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York.
“After careful consideration, we believe it is very clear that absent a prevailing wage requirement, the 421a tax abatement program should not be renewed under any circumstances.”
HEAD OF MAJOR BUILDERS ASSOCIATION ACCUSES TRADE UNION OVER TAX-DEAL FLOP
He said it should instead be replaced by a new program.
The program gave developers property tax exemptions to spur them to buy housing, requiring them to build a portion of affordable housing in certain neighborhoods.
But critics, including Mayor de Blasio, wanted it reformed so it would not subsidize all-market rate development in other areas. Meanwhile, unions pushed to require builders to pay a union-level prevailing wage.
“Imposing a construction prevailing wage requirement on the new 421-a program will simply result in much less affordable housing so that certain segments of the construction industry can be paid well above middle class wages,” said John Banks, president of the Real Estate Board of New York, adding he still wants to try to work out a deal.
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Jolie Milstein, president and CEO of the New York State Association for Affordable Housing, slammed LaBarbera’s stance. “Gary LaBarbera’s hard-line position is irresponsible and reveals his disregard for addressing New York City’s affordable housing crisis,” she said.
De Blasio and Gov. Cuomo have both expressed worry about what the expiration of the tax break will mean for affordable housing.
“The previous approach was not right. We needed a method for creating affordable housing that was more fair to the taxpayers, that came with fundamental reforms including not subsidizing luxury housing on a vast scale,” de Blasio said Monday. “I think there’s still a path to get to something like that.”
One of the major proponents of the tax break, Glenwood Management, is a major political contributor, and was involved in both the Sheldon Silver and Dean Skelos corruption cases.
