Yesterday, Mayor Bloomberg released a budget that calls for closing 20 firehouses, senior centers and layoffs for over 6,000 NYC public school teachers. The New York Times called this a “good news” budget! Another headline stated that New York Yankee third baseman Alex Rodriguez was buying a new condominium at The Rushmore on the Upper West Side. The condo is selling for a reported six million dollars. ARod made 33 million dollars last year, 9 million dollars more than the second highest paid player in major league baseball. So you may be wondering where am I going with this. When I checked out The Rushmore I discovered that they are a recipient of a 421a tax abatement. A look at the Corcoran website that is offering units at The Rushmore, shows ARod’s six million dollar condo pays about $103 a month in property tax or $1,236 a year.
I am a homeowner who pays more in property tax on my one-family, 112-year-old home. The 421a program is a topic of great debate since it expired in December 2010. The REBNY (Real Estate Board of New York) has been lobbying for a return to the old program that requires no affordable housing to be built in return for this abatement that can last up to 25 years. The Independent Budget Office said in a recent New York Times article that the 421a program will cost a projected 930 million dollars in forgone tax revenues this year.
Just think what we could do with an additional 930 million dollars. We could save teachers, senior centers and firehouses, and have cash left over to build affordable housing. I’m certain that not-for-profits would do a better job than private developers at building affordable housing and they would do it for considerably less money.
It’s time to let the 421a program expire. It sickens me when Bloomberg threatens the safety of our children and seniors by reducing staffing on engine companies and then threatening to close 20 additional firehouses and senior centers. Cutting teaching jobs that will increase class size while refusing to increase taxes on the wealthiest NYC residents. By ending the 421a program we can begin to collect the property taxes we need to keep the city running in tough financial times.
—Phil
Ethan Pettit
February 20, 2011
Bravo, Phil! And let’s not forget that the 421a by itself is enough of an incentive to dissuade many developers from taking advantage of further tax incentives that would require affordable housing to be included in new developments.
A quick remark on affordable housing. There is a silver lining in the overbuilding in North Brooklyn that took place in the wake of the 2005 rezoning. It will likely depress condo prices all around, and Brooklyn’s aging housing stock has been bolstered with new and more energy-efficient housing that is much needed. Not all of that new housing will get the prices being asked, and much of it may go into bankruptcy and eventually become low-income housing.
Unwittingly perhaps, Bloomberg with his Williamsburg zoning scheme may have succeeded in luring the real estate business into putting up a lot of much needed housing — at little or no profit to the developers in many cases, and to the long-term benefit of the community. Surely, though, that was unwitting. And surely, the 421a program at this point is downright witless.