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Recommending an Overhaul of New Yorks 421a Property Tax Exemption Law

Abstract:
The problem area I have chosen for this paper is affordable housing in New York. The
existence and long-term sustainability of affordable housing units in New York have dissipated
as neighborhoods have become increasingly gentrified or increasingly middle-upper class. This
has become a major problem for the low income worker and has made more families susceptible
to neighborhood displacement or homelessness.
In this paper, I will propose an overhaul of New Yorks 421a Property Tax Exemption
policy. I believe that this state tax law is an important aspect of affordable and unaffordable
housing in New York City right now, and that amending it will have a positive impact on the
lives of middle and lower class New Yorkers. In my Introduction to this recommendation, I will
share the insights that led me down the path of creating a policy recommendation for 421a in
New York. In Sections II and III, I will explain this policy in the context of a brief history of
New York City housing policy. I will then explain the policy as it exists today. In Section IV, I
will explain its current impact on city life, and on the lives of those like Barbara and Dasani,
members of the middle and lower classes. I will propose my idea of overhauling this historical
policy to take on a more fair and balanced role in city housing in Section V. My proposal will
recommend strengthening the ability of 421a to ensure the security of existing affordable units as
well as to create a higher number of affordable units than current trends suggest are being
created. In Section VI, I will outline the hopeful impacts of this policy. In Section VII, I will face
potential objections to my policy, as well as concerns and uncertainties regarding its
implementation. In Section VIII, I will conclude my recommendation.

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Section I. Introduction

In Mayor De Blasios 5 boroughs, 10 year plan, he states, we have a crisis of

affordability on our hands in many ways built on New York Citys success.1 The success he
speaks to is 40 years of development and reinvigoration of what was once a hard and seemingly
unlivable city. New York is now, for the most part, a safe, populous, and economically thriving
city. But with these changes have come unfavorable problems to housing stock and affordability.
What was once a ploy to incentivize developers to build in the city on unused land has become a
destabilizer for thousands of middle and lower class families in the city who can now barely
afford the price of shelter. With new policy, and through honing in the effects of a now outdated
421a tax abatement and incentives policy, we can put more money into public housing,
affordable housing vouchers, and housing subsidy programs devised to help homeless families
get back on their feet. That is the overall gist of the policy recommendation I will make.
There are far too many people in my city that go to sleep hungry and insecure at night,
and too many subsidies being handed out to the super rich at little to no benefit to those on the
other side of the economic spectrum. For the middle class, the working class, and those at the
very bottom, my policy recommendation seeks to find governmental, policy justice for these
groups through renewed protection of housing security and affordable housing possibilities. The
streets are safer in New York, but too many families are being displaced by these rampant
economic changes to neighborhoods, and there are nearly 60,000 people sleeping in homeless
shelters in New York City on any given night.2

1 http://www.nyc.gov/html/housing/assets/downloads/pdf/housing_plan.pdf
2 http://www.coalitionforthehomeless.org/the-catastrophe-of-homelessness/facts-about-homelessness/

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The changes I will propose will hopefully serve the purpose of leveraging more power to
those who will have the most to lose in what has become a New York City housing crisis. There
is an increasing population of those who are displaced by rapidly increasing prices of rent and
living. In this proposal, I hope to continue to increase the benefits of income integration and
private development, while ensuring the economic and housing safety of all those who live and
work within the City. If the city were to make the changes I am insisting on, it would benefit
from hundreds of millions of dollars added to the budget through allowing fewer tax exemptions.
In reserving the majority of these funds the city could, in theory, begin to provide better and
more realistic care for families in need of a fresh start.
In policy, and especially in contentious policy debates, there must be resolution and
compromise between key players. For years, the voice of the tenant of the middle and lower
classes has been overshadowed by the strong lobbying efforts of the real estate developers and
their lobbyists in Albany. This recommendation seeks to shift this power balance to reflect the
views of the tenant as well as the developer. I do, however, acknowledge that this policy may
seem politically unrealistic. For this reason, it seeks to begin the conversation between
developers, tenants, and law-makers on this crucial issue. True, meaningful compromise must be
made, and this recommendation is a place to start.

Section II. History of 421a

There is a long and complicated history of housing law in New York City. The New York
City Housing Authority (NYCHA) was formed in 1934 under the guidance of then-mayor
Fiorello La Guardia. The First Houses were established in 1935 as the first set of public housing
in the city of New York, holding within them thousands of units owned by the city. These units -

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as was the promise of public housing and NYCHA - provided housing for those making very low
incomes in the city. The city continued to build and provide these units to New Yorkers through
the 1960s and 70s, using federal money starting after 1937. 3
In 1974, there was a major change to the way affordable housing would be approached
forever. The federal government passed the Housing and Community Development Act of 1974
which, in its Section 8, established federal rent subsidies to help those who could not afford to
pay rent at market rate pay a lower cost of rent.4 Section 8 provided city agencies in New York
with vouchers which tenants who sat between 50-80% of median family income in the area
qualified for, and which would subsequently be given to landlords to be redeemed for cash. This
helped replace funds for public housing in New York with a voucher system that would reserve
space within private developments, ensuring that those making less money could still afford to
live where they work.
At this time, in the 1970s, New York City faced a serious housing problem. Public
housing and Section 8 vouchers were working well to create and sustain affordable spaces in the
city, but the city was lacking severely in private development. Thousands of acres of land sat
desolate and underutilized, and so in order to combat this, the city government had to make a
change. This leads us to the history of the property tax exemption law, 421a.
421a was created in 1971. It is a city-run and state financed program that offers property
tax exemptions to developers of residential buildings in New York City. It was created in 1971 as
an incentive for development in New York City. It was created in the hopes that it would make
developing and investing in New York City less risky if new landlords and tenants could pay
vastly minimized property taxes on new developments.
3 http://www.nyc.gov/html/nycha/html/about/nycha70.shtml
4 http://www.nyc.gov/html/nycha/html/about/nycha70_timeline.shtml

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1974 was the final year in which public housing was built, through NYCHA, by city,
state, or federal funds in New York. With 421a in place, development skyrocketed in the city, and
with Section 8 in effect by the mid 70s, some units in privately developed buildings became
reserved for families with lower incomes.

Section III. 421a in Its Current Form

In 1985, 421a Property Tax Exemption law took on a new, more modern meaning. In this
year, it became the first program in the United States to use property tax abatements as incentives
for market-rate developments to build affordable housing units.5 As a result of outrage within the
city, the City Council proposed to amend 421a to require a portion of new private housing in the
city to be affordable. Under new provisions, new developments in certain areas called Exclusion
Areas - mainly more developed parts of Manhattan, from West 14th to 96th Street - would be
required to create 20% of new units under the definition affordable if they wanted to receive
tax incentives on their developments. Affordable meant this percentage of units would be
reserved and rent stabilized for families living within 50 to 80% of median family income in the
area. Units, however, could exist within the development or outside, with incentives varying
between choices developers made, and developers could just as well choose to develop without
any incentives - and without any affordable units. The city then provided 10 to as many as 25
years of property tax abatements to new developers on their new projects, if they chose to
participate. Projects must also exist on lots deemed by the city as underutilized, unused, or
misused by previous development. This became a very important piece of legislation and to this
day, it has remained an important aspect of affordable housing conversations in New York.
5 http://manhattanbp.nyc.gov/downloads/pdf/2015%20421-a%20Policy%20Brief.PDF

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In 2008, the program was amended further. After a significant housing boom in the early
2000s, calls for reform to the program were made by tenant advocates and many city officials.
Subsequent changes included an expansion of the Exclusionary Zones aforementioned, now to
include the rest of downtown Manhattan, as well as many gentrified areas of Brooklyn and the
other boroughs. For other neighborhoods, 421a served to incentivize developers to build, and
further, optionally, to build affordable units. Also in 2008, reforms were made to ensure that all
affordable housing built under the program would be built on-site of market rate units, rather
than somewhere else, as was an option in earlier years.6
In the form in which it exists today, 421a incentivizes the development of private housing
and affordable housing in New York City by offering tax exemptions to developers of new
residential buildings on underutilized lots. In its exclusionary zones, developments must contain
20% affordable units if they are to receive the benefits of 421a, although they may choose to
avoid the program altogether. In non-exclusionary zones, above 110th street and in many parts
of the outer boroughs, there is no affordability requirement developers must fulfil in order to
receive property tax exemptions from the city, although they can receive longer property tax
exemptions by creating affordable units. These units are kept affordable through rent
stabilization and Section 8 vouchers. This year, provisions were made to extend tax abatements
for developments that extend the affordability of their already affordable units, as time expires on
the original deals made by those developments.7 It was kept alive by state legislators and will
remain that way for the foreseeable future.

Section IV. Current Impact of 421a Property Tax Exemption

6 http://prattcenter.net/projects/sustainable-community-development/reforming-nycs-421-property-taxexemption-program
7 http://www1.nyc.gov/site/hpd/developers/tax-incentives-421a-main.page

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The questions that face New York City and its residents are these:
a. What are the current impacts on 421a on the lives of middle and lower class New Yorkers?
b. Since it was amended to reflect the affordable housing push of the 1980s and early 2000s, how
effective has the program been in creating and sustaining affordable housing in New York City,
while creating and sustaining private development?
c. How much money is lost on tax breaks afforded to new developers by the city every year? And
further, how much is being gained by families benefitting from the affordable units created?

The current impacts have become easier to infer as more data has been released. Since the
1980s, only 7-8% of the units created under 421a have been affordable.8 9 Of those units,
affordable, being defined relative to the median family income of the area, has not always been
so affordable for low and middle income people. This begins with the legal distinction of
affordability and consequently, how median income is calculated in New York. Median Family
Income (MFI) is defined for all of New York under the heading New York Metro Area, and
designates a median income of over $76,000 for two-adult, two-children families for all of the
boroughs and Putnam County. This is an inflated rate, however. It is inflated by the federal
government, in fact, because of the dense population, and is intended to be more inclusive to
families looking to apply for affordable housing in the city.10 In 2009, for instance, the average
MFI in New York City was under $62,000, according to the Center for Urban Pedagogy (CUP).
Brooklyns MFI was $49,000, the Bronxs MFI was $38,000, and Queens MFI was $61,000.
With a city-wide MFI of $76,000, affordable housing units are more accessible to more people,
8 https://www.youtube.com/watch?v=BNyzJ_Opa8Ehttps://www.youtube.com/watch?v=h3BJ9gUxhHA
9 http://prattcenter.net/sites/default/files/prattcenter-ny421-areport.pdf
10 http://welcometocup.org/file_columns/0000/0011/cup-fullbook.pdf

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however less accessible to families within lower income brackets, especially in the outer
boroughs.
According to different reports, New York City exempts hundreds of millions of dollars in
tax revenue to developers through 421a every year, even despite these lackluster results.
According to the New York Times, last year, 150,000 units were created in the city using 421a
tax exemptions, resulting in 1.06 billion dollars lost in property tax exemptions.11 At the same
time, the federal government has all but halted funding for Section 8 and Project-Based Section 8
vouchers in New York City, and has significantly cut funding to NYCHA, the citys source of
public housing and public housing upkeep. NYCHA now allocates one third of its annual
funding to debt relief, and requires an estimated 6 billion dollars to cover all of its necessary
building repairs across the city.12 13
Another issue that has affected families and the sustainability of affordable units has been
the loopholes that allow landlords and developers to deregulate affordable units while still
receiving property tax exemptions. Loopholes through what is called Major Capital
Improvements (MCI), and through vacancy decontrol - which currently allows many rent
stabilized apartments to be decontrolled, meaning they lose their stabilized status, after they are
vacated by a tenant - have made the longevity of affordable units created under the program less
secure, and more easily susceptible to deregulation or increased rent by landlords in the city.14

Section V. The Policy Recommendation

11 http://www.nytimes.com/2015/05/05/nyregion/overhaul-of-housing-tax-abatement-is-aim-of-lobbyingcampaign.html?_r=0
12 http://www1.nyc.gov/assets/nycha/downloads/pdf/fy2015-budget-book.pdf
13 http://nymag.com/news/features/housing-projects-2012-9/
14 http://www.nycrgb.org/html/resources/faq/decontrol.html

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New policy must answer to these crucial questions being asked by New Yorkers. It must
ensure affordable housing for those who work and live within the city. It must ensure that most
New Yorkers will not be priced out of their neighborhoods because of new developments, as rich
tenants and developers squeeze themselves in. As the original purpose of 421a has been fulfilled,
many aspects of 421a in its current form need not exist any longer, as they increase inequality
and damage the citys diverse economic population. 421a is no longer working to create and
sustain the affordable housing it was created to, and so it must be overhauled in order for these
necessary changes to be made.

With the information provided in Sections I-IV in mind, these are the major changes I
recommend for 421a Property Tax Exemption policy in New York:

I.

Firstly and primarily, Geographic Exclusionary Areas (GEA) will still require 20% affordable
units in new developments in underused, unused, or previously nonconforming lots, but there
will no longer be tax breaks offered as incentive to build affordable units. It will now be
mandatory that new residential developments are built to with 20% of units designated affordable
units. Affordable units will be financed through rent stabilization and vouchers which the city
and state will finance, rather than relying on federal aid. Developers will still receive market rate
rents for apartments, but the city will vouch for the difference in rent between what is affordable
for low income families and what is market rate.

II.

In areas not currently designated GEAs, new developments will still be required to contain 20%
affordable units, but tax incentives will be available for these developers, as well as increased

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benefits and exemptions for added affordable units. New developments will always be inclusive
to the neighborhoods they inhabit, and developers will have increased incentive to build in nonGEA areas of the city, rather than in Manhattan or other highly populated areas.

III.

Within exclusionary areas and also outside of these areas, incentives can be won back (in the
case of exclusionary areas) or extra incentives can be won if developers opt to finance or cofinance minor projects within their district. These projects will be available to finance through
either Participatory Budgeting, if that system has been set up in the district by the standing
Councilmember there, or through infrastructure and capital projects approved by the
Councilmember of the district. Examples include contributing to the building of new parks or
improving schools.

IV.

These amendments will not work retroactively. They will only apply to contracts made with the
city after the passage of these amendments. However, the outlined changes below which intend
to close major loopholes in 421a affordable unit sustainability, will be retroactively enforced.
These loopholes regard Major Capital Improvements and vacancy decontrol. These changes will
go as follows:

A. Rent laws in correspondence with 421a currently allow buildings with 35 or more
units to permanently increase rent on units, including those which are rent stabilized,
after new installations are made on the general premises. These rent hikes are called
Major Capital Improvements and are ways in which landlords can raise rent on rent
stabilized apartments. After increasing rent above the threshold of stabilization which
currently sits at $2,700/month, landlords can decontrol those units which have fallen out

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of affordability into the market rate.15 Major Capital Improvements will no longer apply
to affordable units in new developments. However, rent increases that result from
individual apartment improvements will still be allowed until individual rent increases
have paid their share of 1/40 the cost of these improvements.

B. If rent regulated units in New York City created through 421a are vacated, their
vacancy will be filled via the same waitlist which was used initially, with priority going
to families with lesser means, those who applied first, and families currently living within
the same borough as the new development. Petitions for vacancy decontrol will be
directed to New York City Housing Court.

V.

Median Family Income (MFI) measurements will now be specific to each borough in accounting
for affordable units in new developments. Lotteries will open up to families who fall within the
MFI of that borough and as previously stated, preference on the lottery will be given to families
with lesser means and those who apply first.

VI.

With the money formerly used to provide tax abatements to new developments in exclusionary
zones, the city will finance affordable housing initiatives and public housing costs, so as to
continue to alleviate the housing crisis that has arisen over the last several years by extending the
promise of a new 421a beyond its explicit reach. Allocation of these new funds will be budgeted
by the Mayor and the New York City Council in their annual budget.

15 http://www.nyshcr.org/Rent/FactSheets/orafac24.pdf

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VII.

Apart from parts A and B of Section IV of this recommendation, agreements already made with
the city will be carried out unchanged and uninterrupted.

Section VI. Envisioned Outcomes

421a policy as it currently stands has not been adjusted adequately to meet the needs of
the middle and working class people, and this policy recommendation seeks to make a more fair
and practical compromise with developers, providing a more reasonable and straightforward
approach to creating and sustaining affordable housing opportunities for middle and low-income
residents of New York City.
Firstly, with these recommendations, the government will receive much useful tax
revenue. New York City and State will spend far less money on allowing tax exemptions, and in
return, will have the opportunity to empower housing agencies like the Department of Housing
Preservation and Development, the Department of Homeless Services, the State Division of
Housing and Community Renewal and more.
With 421a tax incentives now only incentivizing non-exclusionary areas for future
development, poorer neighborhoods throughout the outer boroughs should see more positive
economic and social changes. To accompany these changes will be the safeguarding of
affordable units, as with new developments will now come affordable units. Small business
should benefit in these communities as neighborhoods gain more residents and more economic
and social diversity, without the negative side effects of displacement.
The Councilmember and community will have more leverage over development in their
districts, and will be able to help determine how to ensure development that benefits all members

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of their community, not just the upper class elite or the developer. New developers will still have
the right to build what they want, where they are able to. Developments can now bring more
money, economic stability, and diversity into neighborhoods in an inclusive and neighborly
manner.
By changing the Median Family Income determinants for affordable housing in
respective boroughs, affordable housing will become more accessible and localized. For
developments in Brooklyn, The Bronx, and Queens, MFI will be lowered substantially, allowing
more vulnerable populations to apply for housing in lottery situations. Using Brooklyn as an
example, as of 2009, the median family income in Brooklyn was $49,000. Under these proposed
amendments, Section 8 vouchers which apply to families with incomes between 50-80% of MFI
will apply to those making as low as $24,500 a year, down from $38,400.16

Section VII. Uncertainties, Potential Challenges, and Objections

How will this recommendation ensure new affordable units? This is pushing development away
from parts of the city that need affordable housing most.

Firstly, the results of current tax exemption policy suggest that a very small number of
units created under 421a are actually affordable. That being said, if developers are intimidated by
the new policy, the city will have that much more money saved from the tax abatements they
were formerly throwing away. This amounts to around 1 billion dollars saved annually, which
can be put toward sustaining affordable units through rent stabilization, Section 8, and project
based Section 8, among other options.
16 Personal estimation based on MFI of $76,800 and MFI of $49,000, finding 50% of each estimation.

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With NYCHA in the red because of a lack of federal funding for the program, this new
policy will help NYCHA continue to function for the foreseeable future, ensuring for hundreds
of thousands of families, the sustainability of public housing in New York City. I will note,
however, that this recommendation does not intend to push away development. It intends to
continue to incentivize development in the outer boroughs, however, in relation to the restrictions
being given to exclusionary areas.

What does this do to curb huge increases in rent in New York City?

This is not a plan to decrease rent in the city. This is a plan to increase affordability of
rent in the city which is intended to, in turn, narrow the gap between what people are forced to
pay for, and what they are able to afford in New York City. Construction on new developments
has increased at a rate disproportionate to other types of growth, and this growth has widened the
gap between what market rate expects, and what most people are able to afford in neighborhoods
that have experienced rapid construction and gentrification. So while it may not impact rent
directly, it certainly will have an indirect impact on the market rate and on New York residents
making less than what is necessary to survive paying it.

This is a free market economy... How can you force affordable units?

My first response is that the free market in any context can be amended to better serve the
people. This is the purpose of our branches of government, and the reason for which many laws
exist to limit the possession of goods and wealth by a minority of citizens. This idea is also not

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unprecedented as we have seen in other cities like Los Angeles and Seattle. In these cities, and
others, tax laws are far less lenient for new developers. In Seattle, commercial developers are
actually given an additional tax per square foot, extra money which is put toward the
development of affordable housing. In a separate resolution this year, Seattle voted to enforce
affordable units in new residential dwellings without tax exemptions.17
In many ways, then, it is even more of a free market economy now. Developers are still
free to develop what they want within zoning restrictions. If developers want a free market, then
they will be opposed to any tax exemptions at all, as they allow new tenants to pay unnatural
(rather than natural market rate) property taxes on their units. This is neoliberal policy that must
change. What we will see in the future, at least with my policy recommendation or any
compromises based on it, it that the affordable units created through the development of market
rate units will now be lamented for continued future use, and developers will not lose money on
these units simply by building them; they will be subsidized and covered by government
vouchers.

This will hinder development, which the city is still in desperate need of.

This is actually a myth, which can be debunked with a simple statistic on development
over the last 20 years. According to the Pratt Center for Urban Planning, over the last 20 years,
64% of new developments have not used 421a subsidies to build.18 My policy recommendation
still allows for subsidies in non-exclusionary zones, however, cutting at potential decreases in
development. Given that developers will still be receiving market rate rents on all of their units, a
17 http://www.reuters.com/article/2015/11/18/us-seattle-housing-idUSKCN0T707820151118
18 https://www.habitatnyc.org/pdf/advocate/Pratt421a.pdf

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huge decline in development does not sound like a realistic result. In short, there will most
definitely still be development, as the city and its reputation to developers has changed
drastically since 1971 when 421a was passed into law. There is plenty of free market incentive to
build in New York City. I am confident that building will still take place if a portion of units are
forced to have affordable units built within them.
The city has been thriving economically in recent years, and as outlined in New York
Citys Fiscal Year 2015 Executive Budget, Gross City Product now exceeds 700 billion dollars
annually. The amount of building permits issued annually continues to rise since plummeting in
2008, and it is understandable that with new restrictions will come more hesitation on the part of
developers. The fact of the matter is, however, that developers can afford to develop, as
suggested by the fact that the majority of new developments in the city currently do not utilize
421a tax benefits. 46% of New Yorkers live at or near the poverty line, meanwhile. 19 It is time
for change.

This plan does not do enough to compromise with developers, who hold the political power in
Albany.

Compromises can be made, and the small compromises made recently are a small
testament to the compromise that we may see in the future. As we have seen over the past year,
the Real Estate Board of New York, a large trade group of developers in New York, has made
concessions on real estate and housing policy in New York. In an article for Capital New York in
June, the expanded affordability requirements, a ban on giving the abatements to condos and a
new mansion tax on homes sold for more than $1.75 millionREBNY said it would back the
19 http://www.nyc.gov/html/records/pdf/govpub/OMB%202015%20Exec%20Budget%20Summary.pdf

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plan and had already called lawmakers in Albany to say they should approve it.20 Small steps
are being made every year to downsize the tax incentives and upgrade the affordable
requirements and strengthen the durability of rent stabilized units. It is true, however, that small
steps will not do enough to actually represent the needs of the middle, working, and lower
classes. This is how 421a has become increasingly outdated, and why stronger policy
recommendations like this one must be made.

Section VIII. In Conclusion

Throughout conducting my research for this project, I have found how complicated and
demoralizing the politics of housing law in New York really is. This is seen through many facets,
one of which being the public policy considerations made by public officials in New York.
Politicians are wary of the needs of tenant advocacy groups in New York City, but they
are also aware of the political power held by real estate developers and their lobbyists in Albany.
Just recently, former Speaker of the New York State Assembly, Sheldon Silver was charged and
found guilty on seven different accounts of fraud. Among these accounts was an agreement made
between Silver and two large development firms, in which Silver took bribes in return for his
support on certain rent legislation that favored developers. Meanwhile, Dasani and her family
have lived in a decrepit homeless shelter for years. It is well known at this point in time that New
York State government has been weakened by weak campaign financing regulations, and weak
oversight of the agreements made between lobbyists of developers, for instance, and elected
government officials.
20 http://www.capitalnewyork.com/article/albany/2015/06/8571033/accord-reached-421-program-rentlaw-renewal

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Policy recommendations and stances taken by public officials on the matter all seem to
acknowledge this balance of power. All schemes are, in varying degree and in varying approach,
pragmatic of these complicated politics in their approach to reform 421a. However, what is
apparent among all recommendations like those of Governor Cuomos, Mayor De Blasios, and
Manhattan Borough President Gale Brewers, are calls for an overhaul of the program that (1)
gives fewer tax exemptions to developers developing within the city, and (2) provides more
protections for middle and low income tenants by expanding the longevity of affordable units
and by strengthening rent regulation laws. In June, Governor Cuomo passed a deal that would
extend 421a for another 6 months while further deliberation ensued, and which would increase
the rent stabilization threshold from $2,500/month to $2,700. However, the effects of time and
the speed of development outweigh these moral, political victories, and for many middle,
working and lower class citizens, they can easily be perceived as major defeats. It is time for real
change to take place and for legislators to propose amendments that will actually change the
ways in which developers impact communities and how middle and lower income family living
affordances and protections are sustained.
421a was created to combat abandonment and a severe lack of development in the Big
Apple. It was greatly successful, bringing in development to make the city physically and
economically safer place to live and work. It has outlived its use, however, in the form in which
it now exists. It no longer caters to the citys housing needs of today, and has not done so for
many years. Reforms of the program began in the 1980s but could not keep up with the rapid
pace of economic development that took place - epitomized, possibly, by what we are seeing
now in New York. With new development, the city continues to see positive changes to the
overall quality of neighborhoods and certain aspects within them. But the income and rent gaps

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continue to grow. Wages increased 2% over the last year, and Gross City Product has increased
as well. However, in 2005, more than a quarter of tenants in New York were paying over half of
their income on rent, and that number has only grown.21 At the same time, homelessness has
continued to increase. In fact, in the last ten years, homelessness in the city has more than
doubled. Since 2013, the number of homeless people sleeping in Department of Homeless
Services shelters each night has risen 9.5%.22 This must be treated as an effect of skyrocketing
market values on rent and other aspects of living, aggravated by state legislators inability to
adjust affordable housing regulations within 421a to correspond with the needs of many New
Yorkers. The city has done far more to pay rich people to build apartments in the city than it has
to keep the middle and lower classes secure in their homes and for increasing amounts of people,
secure in their ability to find shelter entirely.
By changing 421a to better reflect these modern and pertinent needs, thousands of
families in the city will benefit through multiple means. Fewer tax incentives will indicate an
ideological shift by the government toward protecting affordable living in New York. Fewer tax
incentives and fewer tax breaks to wealthy developers will also put more money in the pockets of
the city, enabling the budget to more effectively combat issues like homelessness, public housing
upkeep, and affordable housing that have continued to raise concerns for thousands of New
Yorkers. More money going toward these programs will allow more of those living with poverty
and shelter insecurity to have the resources to help them achieve better futures for their families.
This will also allow the city to maintain middle and low income workers who are vital to local
businesses and local economies, as well as the city economy as a whole. In the outer boroughs,
median family incomes sit around $50,000 a year for families of four. For these families, more
21 http://prattcenter.net/sites/default/files/prattcenter-ny421-areport.pdf
22 http://www.nycrgb.org/downloads/research/pdf_reports/ia15.pdf

Frank 20

affordable housing and neighborhood development will mean increased employment

opportunities, safer streets, and increased tax dollars going to important neighborhood projects.
The city can continue to grow, but no longer at the expense of affordable housing.