Stop 421-a Tax Breaks

Tell Mayor de Blasio [phone] and Gov. Cuomo [phone] that we can’t afford to give tax breaks to the rich that cause our rents to go up.

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Erin Durkin on Twitter

“.@BilldeBlasio says new and improved 421-a will be top priority if Democrats win the state Senate.”

Is this a ploy by Mayor Bill de Blasio (D-New York City) to get Big Business (a/k/a ‘REBNY’) to support Democrats in the New York State Senate, and, in exchange, the Democrats will pass costly and corruption-riddled 421-a tax abatement for developers ?

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Negotiations between construction unions and developers over wages at projects that receive a controversial real estate tax incentive appear to be breaking down.

If an agreement is not reached by Friday, the program, 421-a, will expire.

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New York Tax Abatements: Understanding 421-a

The controversial tax abatement 421-a will likely expire at midnight. Here, a guide to the abatement's history and impact.

“With each passing hour, expiration becomes ever more likely.”

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Everything You Need to Know About NYC's 421-a Tax Program, Poised to Expire Today

Unless an agreement is reached to extend it, the 421-a tax exemption program will expire today. Curious about what that all means? Read on.

So much pro-gentrification bias in this article :  “The program sounds like a good way to bring development to desolate areas” ... for example.

[progressqueens]

Tenants Take the Hit as New York Fails to Police Huge Housing Tax Break

Top developer Two Trees Management overcharged renters for years – but still cashed in on $10 million in tax cuts the city never officially approved.

Tenants Take the Hit as New York Fails to Police Huge Housing Tax Break

Top developer Two Trees Management overcharged renters for years – but still cashed in on $10 million in tax cuts the city never officially approved.

by Marcelo Rochabrun and Cezary Podkul ProPublica, Dec. 4, 2015, 10:51 a.m.

Note that the affordable apartments are being given under “preferential rents,” which is subject to exploitation by landlords.  Also, Progress Queens has requested copies of complaints filed by tenants of affordable housing apartments in 421-a buildings with the New York State Attorney General’s Office, but the State AG’s Office has been jerking Progress Queens around all year long, and finally the State AG’s Office denied our FOIL request just recently.  In light of the fact that this Pro Publica article shows that nobody is policing the 421-a landlords, it figures why AG Schneiderman is holding back the complaints – and their disposition – from public scrutiny, because apparently he’s been doing nothing.  See FOIL denial letter.  Finally, note that the developer Two Trees Management is politically connected to Mayor Bill de Blasio.

Two prior Pro Publica reports, as part of this investigation, are here :

Landlords Fail To List 50,000 N.Y.C. Apartments for Rent Limits

Owners are getting $100 million in property tax breaks while violating the law requiring them to officially register, and city and state officials are unable to explain why.

by Cezary Podkul and Marcelo Rochabrun ProPublica, Nov. 5, 2015, 2:14 p.m.

N.Y.C. Landlords Flout Rent Limits — But Still Rake In Lucrative Tax Breaks

Help ProPublica and WNYC investigate how renters are being exploited under a housing program that will save developers $1 billion in property taxes this year.

by Cezary Podkul and Marcelo Rochabrun ProPublica, Nov. 4, 2015, 4 a.m.

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Attorney recalls meetings with Silver over rent regulation

Richard Runes said he was unaware that Silver was receiving referral fees

How the June 2011 rent laws renewal played out : 

Former Assembly Speaker Sheldon Silver (D-Lower East Side) allegedly conformed the June 2011 rent laws renewal, including in respect of the controversial 421-a tax abatement program, in accordance with the lobbying of Glenwood Management, according to a report filed by the journalist Colby Hamilton for POLITICO New York.

In exchange, Glenwood Management funneled campaign contributions through five limited liability company affiliates totaling $125,000 to the Democratic Assembly Campaign Committee, a state Democratic Party committee fundraising account used to augment Assemblymembers' election efforts.

Further Reading :

Lobbyist details Sheldon Silver's June 2011 rent laws renewal Glenwood shaped with grease of donations [Progress Queens]

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Numbers Behind 421-a and Affordable Housing Revealed In total, the city forfeited more than $1.1 billion in tax revenue in 2014 alone through the 421-a program, 60% of which subsidized buildings in Manhattan

An interactive map of the impact of one of New York City’s most expensive housing incentive programs, building-by-building across the city. 

This data is accessible to the public for the first time, thanks to MAS’s work in tracking down and merging data from the Department of Finance, the Department of Housing Preservation and Development, the Department of City Planning and the City’s Independent Budget Office.

The 421-a program is up for renewal by the New York State legislature. Based on the findings revealed in the maps, the Municipal Art Society of New York urges that the program cannot be renewed.

[louis-flores]

Real-Estate Developers Retain Clout in Albany

New York City real-estate developers continued to exert their power in the state capital this year even after their industry was associated with a series of political scandals.

Mayor Bill de Blasio was coördinating City Hall’s 421-a lobbying of the state legislature with the Real Estate Board of New York, or REBNY.

“REBNY was working very hard in the past days,” the official said, adding the mayor’s office lobbied the Assembly, while largely letting REBNY lobby the Senate.

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Former Democratic fundraiser Bill Samuels is calling on Governor Andrew Cuomo to give back the roughly $1 million in campaign donations he received from Leonard Litwin's Glenwood Management.

Former Democratic fundraiser Bill Samuels is saying that Governor Andrew Cuomo should “lead by example,” according to Capital New York. In total, Glenwood Management pumped $3.6 million into state politicians. 

The 102-year-old Leonard Litwin has contributed money through roughly two dozen limited liability companies, but only one LLC is registered to Glenwood’s actual address, according to Capital. 

Litwin was also named as “Developer 1″ in the complaint against Assembly Speaker Sheldon Silver, who was arrested in January. 

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State Senate GOPers introduce NYC rent regulation bills

The state Senate Republicans introduced bills that would extend the city's rent regulation laws by six years with some significant changes. Included in the poisonous Senate bill, Republicans added a provision to extend the controversial 421-a tax abatement program by six years.

“The Senate bill would extend by six years the controversial but lucrative 421a affordable housing tax break for developers. 

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Still concerned, de Blasio tones down rhetoric on rent laws

Says expiration has not created 'nightmare scenario'

Mayor Bill de Blasio has “proposed amending 421-a to require more affordable housing and eliminate the tax break for condominiums but said his plan has not gotten traction with Governor Andrew Cuomo.”

"We’ve seen some real interest in both the Assembly and the Senate in moving forward, but I do not have a clear picture today," the mayor said.

Meanwhile, the amendment of the controversial 421-a tax abatement program sought by Mayor de Blasio may be doomed by a reported corruption probe launched by U.S. Attorney Preet Bharara, the nation’s top federal prosecutor for New York’s southern district.  

The 421-a tax abatement program costs New York City government over $1 billion in annual taxes that are forgiven in exchange for a paltry number of affordable housing units, which are not entirely affordable, due to inconsistencies in income caps for tenants.  Some tenants in affordable apartments within a luxury building are subjected to the mandatory use of discriminatory “separate but equal” “poor doors.”

The powerful real estate industry makes large contributions to the campaign committees of elected officials in exchange for what appears to be preferential treatment.  Over the years, Mayor de Blasio and Governor Cuomo have received substantial campaign donations from real estate interests and their lobbyists.

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Albany Dysfunction Is Blowing a Chance for 421-a Reform

f Albany doesn’t wish to get into the weeds on New York City housing policy, perhaps it’s time that they relinquish control of it.

Isn't the Observer owned by a developer ?  

The Observer's endorsement of Mayor Bill de Blasio’s proposed modified 421-a tax abatement program seems like a desperate attempt to score points with Mayor de Blasio as his proposal for a modified 421-a faces almost certain annihilation by Governor Andrew Cuomo.

What teeth does this editorial have, now that Governor Cuomo has basically put the kibosh on Mayor de Blasio's proposal ?

P.S.  Meanwhile, the Observer endorsed Governor Cuomo over Zephyr Teachout in last year’s Democratic Party gubernatorial primary, which only goes to show you how shallow the Observer's talk about now backing "reform" must sound….  I guess we have to be ready for more whiplash from the mainstream media, as the mainstream media gives electeds political cover on 421-a.

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With a deadline looming, the mayor called on lawmakers to approve two of his housing initiatives: strengthening rent regulations and revising a program that gives tax breaks for creating affordable units.

By LOUIS FLORES

Governor Andrew Cuomo (D-New York), under the influence of a “paranoid” aspect due to the on-going corruption probes by U.S. Attorney Preet Bharara, has resorted to double-speak to rationalize his support for controversial tax abatement program. 

Governor Cuomo had recently backed a straight extender of the controversial 421-a tax breaks for luxury condo real estate developers.  

"The official, who spoke on the condition of anonymity so as not to derail the process, said Mr. Cuomo’s suggestion to extend the status quo was meant to apply pressure that would yield a compromise." (The New York Times)

Advocates for tenants’ rights and government reform have argued that the 421-a tax breaks are ineffective and essentially act as a giveaway to wealthy real estate developers.  Advocates have argued that the tax breaks, which expire on June 15, should be ended.  

Yet, somehow, Governor Cuomo has taken the position that a straight extender, or a giveaway, to real estate developers would somehow lead to reforms of the program, according to Governor Cuomo’s disassociated thinking.

As Governor Cuomo deals with acceptance that U.S. Attorney Bharara’s "ultimate target is the governor himself,” it remains to be seen whether U.S. Attorney Bharara will act on his corruption probes before the state legislature renews the 421-a tax breaks.

Will voters be disenfranchised ?

The 421-a tax breaks cost New York City government $1,1 billion in annual lost tax revenues that, if the program could were ended and the tax revenues were collected, could, instead, be used to fund, for example, the huge capital improvement fund deficits of the New York City Public Housing Authority, or NYCHA, or the Metropolitan Transportation Authority, or MTA.  

The U.S. Attorney’s Office for New York’s southern district, now headed by U.S. Attorney Bharara, has been criticized by Richard Barr over having disenfranchised voters in connection with past corruption probes, in particular, by allowing voters from The Bronx to continue to blindly elect former Assemblymember Nelson Castro (D-The Bronx) to office, even though then Assemblymember Castro had been under investigation and was, consequently, secretly coöperating with federal prosecutors in connection with a bribery probe of Albany officials.

During the question and answer portion following a speech delivered on January 23, 2015, at New York Law School, U.S. Attorney Bharara defended his office’s actions to Mr. Barr in connection with the case against former Assemblymember Castro, saying, in part, that, “We make decisions all the time about when to be overt in an investigation and when to remain covert, because we have sometimes competing principles and interests,” adding further, that, “We, all the time, get information about someone engaging in bad conduct, and, sometimes, it’s the case you can’t prove it beyond a reasonable doubt.  And so, you let it go on,” he said, referring to the bad conduct, adding that, “and you monitor it, and you make sure that people are not unduly harmed in the broader interest of trying to make sure you can gather and develop enough evidence, so that when it becomes public, that person doesn’t flee, that person doesn’t destroy evidence, and that person can be held accountable and put in prison for as long as is deserved.”

U.S. Attorney Bharara qualified his comments by saying that, “In addition to that, we’re not only just talking about that person, because, sometimes, it comes to light that someone is engaged in bad conduct, but he or she is not the only one, or he or she is at the bottom of the totem pole, and there are six other bad guys,” adding that, “And, sometimes, with great care and sensitivity, you have to make judgment calls of how long you let something go on,” before saying that, “because, the goal is to hold responsible and to incapacitate as many people as possible, who are responsible for breaking the law.”

Speaking of his office’s development of its case against former Assemblymember Castro, U.S. Attorney Bharara said it was a “particularly difficult struggle, because at the time, if I recall correctly, at the time the election was coming up, we did not have all the evidence with respect to other people, who engaged in bad conduct, and so it is a legitimate question as to whether or not we should have thrown up our hands and called it a day and exposed that person and then gone home, as opposed to letting it run a little longer, so a number of other, additional people, including another public official, could be charge and held accountable.”

In explaining his office’s position, U.S. Attorney Bharara added, in part, that “we thought long and hard about it.  So, for people, who disagree with the decision” to allow former Assemblymember Castro to run for reëlection while under investigation, “you should understand that we didn’t do it in a cavalier way or in a casual way.  We thought about it a lot, because enfranchisement is important.”

Bharara’s probes have not matured in time before elections or budget deals

For years, U.S. Attorney Bharara has been investigating and prosecuting cases of political and campaign corruption of elected officials from City hall to Albany, bringing charges against at least 18 officials.   Yet, during that time, some government reform activists had been hoping that U.S. Attorney Bharara’s cases would mature in time to prevent the further disenfranchisement of voters.

For example, some government reform activists have formed a noisy corner on the Twitter social media network, from where these activists had hoped that U.S. Attorney Bharara’s corruption probes would have forced Governor Cuomo to step down from office before last year’s Democratic Party primary election.

When that did not happen, this digital army of Twitter activists had hoped that Governor Cuomo would step down before his swearing-in ceremony in January.

When that, too, did not happen, the Twitter activists had hoped that Governor Cuomo would step down before a series of opaque backroom deals led to the formation of the state budget at the end of last March.

That, too, did not happen.

Will real estate developers determine whether the $1 billion, 421-a tax breaks are renewed ?

At the January 23 speech at New York Law School, U.S. Attorney Bharara addressed, in part, the reasons he was serious about investigating cases of political and campaign corruption, referring to the bombshell arrest of former New York State Assembly Speaker Sheldon Silver (D-Lower East Side).

Referring to the powers and authorities of legislators working in the State Assembly, U.S. Attorney Bharara said, in part, “They decide about how much we pay for rent and housing and taxes and, as we revealed yesterday, that are about laws that are up for renewal right now in the body that we are talking about.”

U.S. Attorney Bharara has acknowledged himself the importance of enfranchising voters and of the important role of tenant and tax laws on the lives of citizens.

And nowhere can the nexus between corruption cases, on one side, and tenant and tax laws, on the other, be seen than in the looming deadline that the state legislature faces in its decision to either renew or let lapse the 421-a tax abatement program.

The 421-a tax abatement program has spawn investigations, arrests, and non-prosecution agreements, and it has played a role in several of the latest spree of corruption cases up in Albany.

As another deadline looms large over Albany and as U.S. Attorney Bharara is said to be creeping closer to Governor Cuomo, again the Twitter activists, ever expanding, openly wonder whether U.S. Attorney Bharara will act to make sure that corruption won’t influence the people’s business and that U.S. Attorney Bharara will make good on his promise to “hold responsible and to incapacitate as many people as possible, who are responsible for breaking the law,” including real estate developers.

Speaking generally about the effect of corruption on the passage of legislation, U.S. Attorney Bharara rhetorically asked at the January 23 address at New York Law School, “Given the allegation in case after case after case, how many other pending bills were born of bribery ?  And worse, how many passed bills were born of bribery or improper influence ?  How about items in the budget ?  How much of the work of the city and the state government is tarnished by tawdry graft ?”

Thus far, U.S. Attorney Bharara’s probes have led to the filing of criminal charges against public officials.  Lobbyists, including Brian Meara, and real estate developers, including Glenwood Management, have not been charged with wrong-doing, even though they have either reportedly known about or used monetary influences to either curry favor with legislators or to shape legislation.

A spokesperson for U.S. Attorney Bharara’s office declined to be interviewed last week for this article. 

RELATED :  As Preet Bharara probes Albany corruption, will his investigations roll up to REBNY ?  (Progress Queens)

Louis Flores is publisher of Progress Queens.

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Will nonprofit groups fully exert political pressure on Governor Andrew Cuomo in a bid to defeat controversial 421-a tax breaks for wealthy real estate developers ?

With about three weeks to go before the New York State legislature decides what to do with the 421-a tax breaks for developers, which are set to expire on June 15, government reform activists are waiting to see if an array of nonprofit groups advocating for an end to the scandal-tarnished tax abatement program will stay true to their word.

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(via 421-a Program's Unaffordable "Affordability")

Over $1.1 billion is lost each year in the 421a mania of tax-freebies to developers and their financiers.

The 421a tax-giveawy is a remnant of Lindsay era programs to bolster housing construction in New York City.

The sanity and morality of such a program during New York City's current housing boom, is at best questionable, at worst, criminal.

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de Blasio's 421-a proposal would extend tax breaks in exchange for a little bump in affordable housing

Furthering his reliance on 421-a trickle down tax breaks, Mayor Bill de Blasio proposes to extend tax abatements for another 15 years if landlords marginally designate another 5 per cent. of apartments as affordable housing.

The 421-a tax abatement program is opposed by tenants activists and by some nonprofit groups, such as the Community Service Society of New York.  David Jones, the president and CEO of that nonprofit, published an essay in The New York Daily News last February, calling for the elimination of the tax breaks, further noting that the tax breaks were inefficient at actually creating affordable housing.

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A Promise He Can’t Deliver | Jacobin

Bill de Blasio, affordable housing, and One57

From Jacobin :

De Blasio’s problem is that his entire affordable housing program … depends on the goodwill of the real estate barons. He’s promised to get them to build 80,000 affordable apartments and preserve 120,000 more. But unless these wealthy developers can make enormous profits, they won’t build anything, and de Blasio’s whole plan goes down the tubes. As Capital New York observed, “His agenda is, in many ways, in developers’ hands.”

And the developers want to hang on to their 421-a tax breaks. “Without this critical tax incentive,” Steven Spinola, president of the Real Estate Board of New York, told Capital New York, “the city would see a sharp drop off in the production of new housing units.”

De Blasio had a stark choice on the 421-a program. He could either side with the developers and landlords or with the tenants who need affordable housing. The mayor has come down firmly on the side of the real estate millionaires.