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NEW YORK CITY-Gov. Eliot Spitzer has signed bills that will encourage housing construction throughout the city, with an emphasis on the construction of affordable housing. The package of bills reform New York's outdated 421-a law to better target limited resources to neighborhoods in need of affordable housing.
"This legislation will allow New York City to target its limited tax abatement resources to more effectively promote the construction of affordable housing in the neighborhoods that need it most," Spitzer says in a prepared statement. "This reformed law will build on our efforts to solve the housing crisis that has pushed too many working New Yorkers out of the middle class and prevented those struggling New Yorkers from climbing up into economic security."
The 421-a program was initially established 36 years ago to promote the construction of multiple dwelling housing units in New York City during a housing market downturn. The law has provided property tax exemptions to housing developers, particularly developers of desperately needed affordable housing, and has produced more than 110,000 apartments in the city. According to a release, given the dramatically changed real estate market in New York City since the program's inception, tax breaks are no longer necessary as incentives for pure market-rate housing projects in many booming areas of the city. Therefore, reform of the program was necessary to direct more of these tax dollars toward the production of affordable housing.
"I am pleased that all sides were able to come together to produce this important reform, which is critical to the future development of affordable housing in New York City," Spitzer says. The three bills signed into law amend the 421-a program to significantly expand the areas within which affordable housing is required for tax abatements; require that these units meet more stringent affordability standards; give community residents priority for the affordable units; assure that these units will remain affordable over a long period of time; and require projects receiving city tax subsidies to pay prevailing wages to their building service employees. Moreover, a grandfather provision is included that prevents the disruption of projects already in the development pipeline by exempting them from these new regulations.
The Legislature has also agreed to swiftly pass further reforms that address some outstanding concerns. Among other provisions, these promised amendments will assure the city's continued ability to provide tax abatements to moderate and middle-income housing projects for which it is providing substantial government assistance. They will also assure that the buildings that make up the Atlantic Yards project will receive enhanced abatements only if they meet on-site affordability requirements during each phase of project construction.
"Through inventive rezonings and the largest municipal affordable housing plan in the nation's history, we have already built tens of thousand of affordable units," says Mayor Michael Bloomberg. "Today's signing--along with the additional amendments that the Legislature has agreed to swiftly pass--will ensure that we have the tools to spur even more affordable housing construction for years to come."
Assemblyman Vito Lopez, assembly sponsor of the legislation notes "I commend Gov. Spitzer for signing the 421-a Reform Bill into law. This ground-breaking reform will for the first time require the production of on-site affordable housing for working class families in many of the city's up-and-coming neighborhoods. In an unprecedented effort to offset gentrification, our reform also mandates that 50% of the affordable units built using 421-a will be set aside for community residents, and that all the affordable units will remain affordable for at least 35 years. In addition all building services workers in buildings over 50 units will receive a prevailing wage for their services. This is a major victory for low-income and middle-income New Yorkers."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
