Repeals certain provisions of chapter 4 of the laws of 2013 in relation to exemption from taxation of alterations and improvements to certain multiple dwellings

BILL NUMBER:S5629

Title of bill

An act to repeal section 14 and subdivision (c) of section 27 of chapter 4 of the laws of 2013 amending the real property tax law, relating to exemption from taxation of alterations and improvements to multiple dwellings to eliminate fire and health hazards, relating thereto

Purpose

This bill repeals the 421a tax break that was provided to luxury developers in Chapter 4 of 2013.

Summary of provisions

Section 1. Repeals Section 14 and subdivision (c) of Section 27 of chapter 4 of the laws of 2013. These sections provide the 421a tax break to luxury developers and the effective date of such section.

Section 2. Effective Date

Existing law

Section 14, Chapter 4 of 2013, subdivision (c) of section 11-245 of the administrative code of the city of New York Section 27 of Chapter 4 of the laws of 2013 provides for the effective date of section 14.

Justification

This bill repeals the 421a tax break that was extended to a few luxury developers in midtown and downtown Manhattan when Chapter 4 of 2013 became law. According to the New York State Tenants & Neighbors Coalition, the specific developers that benefitted from this legislation were: Extell Development, Silverstein Properties, Thor Equities, Steinhardt Management, and Sharonarn Associations, Inc. More recently, both the New York Times (Big Names in New York Real Estate Figure Into Skelos and Silver Cases by Charles V. Bagli, May 6, 2015) and the New York Daily News (NYC buildings show Albany corruption, real estate connection, by Greg B. Smith, May 9, 2015) have identified another developer, Glenwood. Management, that was also the recipient of the 421a tax break. These luxury developers are under no obligation to construct affordable housing, even though the 421a is a government subsidy.

According to an opinion piece written by Barika X. Williams, the Deputy Director of the Association for Housing and Neighborhood Development for the New York Times (A Tax Break Only Helps Developers, February 10, 2015), "The 421a tax break forfeited $1.1 billion in forgone tax revenue to the city in the last fiscal year alone. That is $1.1 billion that would otherwise have gone to public services like schools, infrastructure, hospitals - and affordable housing."

New York City can ill-afford to continue this government subsidy to luxury developers while working class families struggle to find affordable housing and pay the rent. The 421a tax break for luxury developers must be repealed.

Prior legislative history

New Bill

Fiscal implications

None to State

Local fiscal implications

New York City would likely see a significant increase in tax revenue.

Effective date

Immediately, and shall be deemed to have been in full force and effect on and after June 1, 2012.