421-a Corporate Welfare for Developers

“If anyone here believes that 421-a is an affordable housing program, I want to dispel that myth right now. It is an outdated tax break for billionaire developers like landlord-in-chief Donald Trump and should be done away with completely.”

These words were spoken by Ava Farkas, executive director of Metropolitan Council on Housing, at a press conference organized by Real Rent Reform (R3) and the Alliance for Tenant Power (ATP). The Flatbush Tenant Coalition (FTC), Community Action for Safe Apartments (CASA), Make the Road New York, and New York Communities for Change (NYCC) were present as part of the coalition along with Councilmember Jumanne D. Williams, Senator Liz Krueger, Jeffrey Dinowitz, Victor Pichardo, and Linda Rosenthal.

The gathering met on the steps of City Hall in lower Manhattan at 2:00pm on Thursday, December 1st, calling on Governor Cuomo to abandon his announced plan to revive the wasteful 421-a.

In 2015, 421-a gave real estate developers $1.4 Billion dollars in tax breaks, but, as Trump has already demonstrated to the world, developers can be counted on to rip people off. Collectively, after receiving over a billion public dollars for housing construction, they produced only $100 million in affordable units.

Now Governor Andrew Cuomo wants to increase that tax break to $2.4 Billion. Such wasteful giveaways are especially foolish at a time when Trump has threatened to take away federal funding from sanctuary cities like New York as part of his broader plan to radically displace and dislocate immigrant families and communities.

Pichardo remarked, “It is unfortunate that the Governor wants to emphasize 421-a but not emphasize the need to pass the Dream Act, especially when we have a president-elect who is hostile to communities of color.”

“I’ve watched how many bad versions of 421-a come and go, get passed and when reporters go and look, they report it never was built,” Krueger said. “$2.4 Billion won’t be collected from the city of New York in taxes. That means everyone else will have to pay.”

Krueger, who represents the East Side of Manhattan, noted the absurdity of subsidizing new construction in districts like her own. “It’s an overheated real estate market. Why would we want to continue to overheat and subsidize the most overheated sections of Manhattan and Brooklyn? It makes no sense. Don’t do anything, leave the city with $2.4 Billion, and make them spend it on guaranteed, really affordable housing in the communities that need it, rather than on another one of these scams.”

Farkas pointed to One57, an eye sore overlooking Central Park, as the poster child for this scam. “Although it took 65.6 million from the city’s taxpayers, units range between $7 million to $115 million dollars. It only produced sixty-six units of affordable housing in the Bronx. If One57 had not received this tax break, the city could have built 367 affordable units in the Bronx.”

“Donald Trump has also benefitted from 421-a,” she pointed out. “Trump tower sued the Koch administration and won $22.5 million of a tax break. $20.8 million went to Trump plaza and the Trump Palace. Our Democratic governor should be protecting New Yorkers from Trump’s policies and agenda, not pushing a tax break that would benefit wealthy real estate moguls and blow a hole in the city budget.”

“I’m retired and on fixed income,” said senior tenant Norma. “I struggle to pay my rent, but the governor and the New York State legislature continuously ignore the need the strengthen the rent regulations. More than half of the tenants now pay unaffordable rents. There is this threat by our President-elect to eliminate federal funding to sanctuary cities. Now Cuomo has called for a special session in the state legislature so that this can be rushed into law – as if circumstances weren’t bad enough.”

Williams had a direct message to those elected to represent the people at the state level. “When the cameras come out, we hoop and holler about how bad homelessness is, how bad we need affordable housing. If we want affordable housing, we need programs, plans, and projects that provide affordable housing. It seems like the only thing we have learned is that if you give people free money, they will take it. We are asking all the legislators that came out in droves to show how progressive they were after the election, ‘Vote no on this plan if it comes before you.’ I’m asking the Governor, who is one of the biggest people tripping in front of the cameras to show how progressive he was, to veto this piece of legislation if it comes to his desk.”

“We all know that the underlying problem in this country is the 1% versus the 99%,” said Rosenthal. “If we use as our guiding philosophy that we don’t want to exacerbate that, all the steps the government makes should be more beneficial to the 99%. 421-a has always been not a guiding philosophy of bringing us together, but of lining the pockets of the 1%.”

Madeline Mendez is a tenant living in the Bronx and an organizer with CASA, a grassroots organization that is leading the way in breaking through the divisions developers consistently set up between construction workers and local residents. “I’m here against the 421-a because it’s not helping a lot of people. As I see, it’s for the middle class and the upper class, not for the low income who are disabled and seniors. Section 8 is also being pushed out. Vicki Bean gave out all these Section 8 vouchers, but a lot of the landlords in neighborhoods that are being gentrified don’t want Section 8, they only want the programs that are getting money from the shelters. And I see that all over New York City. I’m hearing that from Manhattan and I’m seeing it in my neighborhood in the Bronx.”

During a brief interlude in the conference, Mendez summed it up. “Stop thinking about the developers!” she cried out. “Think about us!”

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