Family Values and Affordable Housing; lets not let developers get rich at the expense of housing our families in New York City.

I applaud the New York City Council’s calls to reform the 421 A program. But I do not believe that the City Council’s ruling goes far enough to help this city’s working families stay and prosper here. The health, vibrancy and character of this city depends on laws that encourage building of units which can house growing families. We should not seek to build housing which only benefits single people or childless couples. Giving tax breaks to developers who bring to market studios and one bedrooms as affordable housing units sends the wrong message about who we are trying to encourage to stay and prosper in NYC. Affordable, multiple bedroom housing should be the goal of any changes in the 421 A and also 421 B laws seeking to create new housing. If developers wish to use tax breaks to develop property, the 421 A and B law should provision affordable housing units be of ample size to encourage families.

The 421 A and B and as well as other programs were created out of the ashes of the 1970’s financial crisis and at a time when this city was facing neighborhood abandonment’s, with residents moving to the suburbs and beyond. In the early 1980’s, the 421 A exemption was modified so that anyone developing property between 96th street and 14th street (exclusion zone) would not receive these tax breaks unless they set aside a portion of their development for affordable housing.

In today’s booming housing market, the 421 A program operates very differently. In all of Queens, the Bronx and Staten Island, virtually all of Brooklyn, and a considerable part of Manhattan, developers get a tax break for any new unit and do not have to build affordable housing at all. This is unconscionable.

As for the 421B law right now, under the current system, anyone who builds a new one or two family house in the five boroughs automatically is eligible for property tax exemption regardless of size and cost. We must change this to encourage new one and two family homes to be large enough to support a family of at least four members and to limit the exemption up to the first $450,000 of market value. These are two fairer measures which encourage a more family friendly New York City for all its residents.

Another plan which is already being done in East New York by HPD is inclusionary zoning, under which developers agree to set aside a part of their projects for lower-income people in return for being allowed to build at greater density. Another way to encourage affordable housing is via Not for Profit Land trusts where the land is leased and home buyers are allowed to own the building and sell at a reasonable profit.

The need for further reform to the program is clear. The 421A program was well intentioned but today is costing New York City and its taxpayers about $400 million in lost revenue, according to the Independent Budget Office. The 421 B program alone is costing another $30 million: remember, 421b’s are one and two family homes only, not multi -family dwellings. This exemption costs city tax payers far more per capita that the 421A and brings almost zero affordable housing.

Just in the last few years, these program costs have grown over 300%. Also, according to the IBO, just 7% of the 69,000 new units created in 2003 went to low or moderate income earners. This is unacceptable. This is money that could be used to finance large scale affordable family housing all over the five boroughs.

I know that Speaker Quinn, Assemblyman and Housing Chairman Vito Lopez as well as the Mayor and City Council Members would support a much further overhaul of both versions of the 421 program targeted to create affordable family housing in this city.

We need a new vision and not recycle an old program created for a different era in this city’s history . The problem of affordable housing is not just about poor people needing housing: this pernicious problem has climbed the income ladder. Young professionals cram their families into overcrowded apartments, college graduates have to move back with their parents, and firefighters, police officers and teachers can't afford to live in the communities they serve.

We need to support a new program for our modern times and we need leadership that will create affordable housing for families to prosper and grow and cradle more economic vitality in New York City. My plan to tweak and strengthen the existing laws will be work for our residents of the 40th.