Village Voice: Cheap Housing Plan too Pricey: This morning, Mayor Michael Bloomberg announced his proposal to revamp 421-a, the 35-year-old city policy that grants tax breaks to developers of residential buildings. Among the reported changes that the mayor will call for: requiring developers in more of Manhattan and Brooklyn Heights to include some rent-regulated units in order to receive tax breaks; capping tax breaks for projects above a certain price; and eliminating the much-derided "portability" provision whereby developers have been able to get city subsidies for otherwise ineligible market-rate projects by buying tax breaks from low-cost housing elsewhere.
The article goes on to say that "housing experts" believe that the provision should be wiped off the books since it hasn't created any meaningful low income housing in its three and a half decades of existence.
The New York Observer writes: HPD Predicts Condo Price Dip: The housing market has been nudging downward for a while now. Add one more factor: the overhaul, recommended this morning by the city housing department, of the so-called 421a tax break. Housing commissioner Shaun Donovan said in a conference call this morning that condo "prices would potentially go down to some degree" in neighborhoods where the abatements would be eliminated. In those neighborhoods, like Tribeca, the Financial District, Dumbo and Brooklyn Heights, prices have been inflated by about 50 percent of the value of those abatements, he said.
Just how much difference would that make? A Pratt Center/Habitiat for Humanity report (PDF) earlier this year looked at some examples where the abatements, originally meant to spur construction back in the gloomy 1970s, were worth $40,000 to $210,000 over their lifetimes, so prices would come down $20,000 to $105,000 just because of that one change.
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