FOR IMMEDIATE RELEASE
May 11, 2006
MAYOR BLOOMBERG SIGNS LEGISLATION REFORMING 421-A TAX EXEMPTION PROGRAM
Remarks by Mayor Michael R. Bloomberg at a Public Hearing on Local Laws
“The last bill before me today is Introductory Number 202, sponsored at the request of the Administration by Speaker Quinn, Council Members Dilan and McMahon and The Public Advocate, Betsy Gotbaum. This bill amends the exclusion area for 421-A tax benefits in Manhattan in connection with the recent West Chelsea rezoning.
“Since being enacted in 1971, the 421-A Partial Tax Exemption Program has played an important role in stimulating housing production throughout New York City. By providing a limited period of exemption from tax liability, the 421-A program has induced the creation of over 150,000 apartments throughout the City.
“However, as real estate values rose in the 1980s and tax incentives were no longer necessary to promote residential development in Manhattan, the City Council established the Manhattan Exclusion Zone to limit 421-A benefits. To achieve tax benefits in the Exclusion Zone, developers must develop at least 20% of the new units onsite as affordable for a twenty-year tax exemption, or build affordable housing off-site through the Affordable Housing Negotiable Certificate Program and realize a ten-year tax exemption.
“Introductory Number 202 extends the Manhattan Exclusion Zone to those areas of Manhattan’s West Side covered by the West Chelsea rezoning. In combination with the new zoning designations, this legislation will substantially increase the City’s affordable housing stock by requiring the creation of affordable housing units in return for receiving 421-A tax exemptions for residential development in the West Chelsea area.
“I would like to thank Department of Housing Preservation and Development Commissioner Shaun Donovan and his staff, and the City Council, for their work on this bill.”
Stu Loeser / Jordan Barowitz (212) 788-2958