With the 421-a tax abatement program expiring this June, legislators, advocacy groups and the real estate industry are all ponitificating on what they think the changes if any should be to the current program. Currently, the program allows developers in high demand areas like many neighborhoods in Manhattan to get a tax abatement in exchange for making 20% of the units affordable housing. In other areas outside of these zones, the developer can receive the tax abatements without constructing any affordable housing.
The argument against the program is that the City is giving away tax money and getting very little in return. This idea gathered more momentum with the Extell building called One57 where the units including the $100mm recently sold duplex are all abated. According to the developer, the building which started construction in 2009, would not have been built without those tax credits.
The real estate industry argues that with the high price of land, tax abatements are needed to subsidize both rental and condo buildings.
The DeBlasio administration is about to release their proposal for the 421-a tax abatement program and since building affordable housing is one of their major priorities, you can expect that to be a major part of it.