Thursday, February 14, 2013

NY Times: Quinn offers REBNY's plan

Notable quotes (and a major excerpt of the article is below) 

  “Whenever the real estate industry is framing the debate around affordable housing, tenants are going to lose,” said Jaron Benjamin, executive director of the Metropolitan Council on Housing, a tenants’ rights group.


  He expressed dismay over the concept of the tax cap. “It’s almost identical” to the Real Estate Board’s proposal, Mr. Benjamin said. “We think it’s a big mistake to give wealthy developers subsidies.”

  Aides to Mr. Bloomberg said they were surprised, even startled, to see the tax cap proposal prominently featured in Ms. Quinn’s speech.

  When the real estate industry sought a similar set of tax incentives through a bill in the New York State Legislature in 2011, Mr. Bloomberg’s office singled out the tax cap for criticism. In a memo, a top aide said the plan was “not, fundamentally, an affordable housing program,” but “a large tax break dressed up as a housing policy.”





Quinn’s Affordable Housing Plan Revisits Tax Caps Once Rejected by Bloomberg


By MICHAEL BARBARO and CHARLES V. BAGLI

A centerpiece of Christine C. Quinn’s plan to keep housing affordable in New York City is a variation on a proposed tax subsidy for landlords that Mayor Michael R. Bloomberg forcefully rejected two years ago as an unacceptably generous giveaway to the real estate industry.

  Aides to Ms. Quinn, the speaker of the City Council and a leading Democratic candidate for mayor, acknowledged that the idea had come from the city’s real estate industry, one of Ms. Quinn’s closest allies and biggest campaign donors.

  But, the aides said, Ms. Quinn had altered the proposal in important ways since it was heavily criticized by the Bloomberg administration, and predicted that it could, over time, preserve the dwindling supply of apartments that are within reach of the city’s middle-class families.

  She unveiled the plan in her State of the City speech on Monday.

  The measure and its origins highlight a recurring tension in Ms. Quinn’s rise to political power, between her passion as a former housing activist for liberal causes and her growing willingness to work with the corporate interests that control the levers of power in the city.

  Her proposal would impose a 30-year cap on real estate taxes for landlords who renew participation in a program that sets aside 20 percent of apartments for below-market rents. With dozens of landlords threatening to withdraw from that program, known as 80-20 or 421a, Ms. Quinn said that a new tax cap would encourage them to keep charging lower rents, rather than convert units into market-rate apartments or condominiums.

  “Good ideas can come from just about anybody,” Ms. Quinn said in an interview on Wednesday, when asked about the real estate industry’s role. Recalling her days as a housing activist, she said it was impractical to formulate a serious affordable housing plan without the industry’s participation.

  “If you are a housing organizer not willing to talk to landlords and developers, in addition to tenants, what are you getting done?” she asked.

  City developers and landlords, led by their powerful trade group, the Real Estate Board of New York, have long sought a real estate tax cap, which would guarantee them a discounted and predictable long-term tax bill in return for renting out some apartments at below-market rates.

  At the current tax rates in prime neighborhoods, the developers say, there is no financial incentive to maintain affordable apartments in their buildings; a tax cap would help alleviate that problem, they say.

  Critics contend a tax cap gives highly profitable developers a sizable tax break on an entire building when a vast majority of apartments inside are rented at prevailing — and in New York City, generally quite high — rates.
  “Whenever the real estate industry is framing the debate around affordable housing, tenants are going to lose,” said Jaron Benjamin, executive director of the Metropolitan Council on Housing, a tenants’ rights group.

  He expressed dismay over the concept of the tax cap. “It’s almost identical” to the Real Estate Board’s proposal, Mr. Benjamin said. “We think it’s a big mistake to give wealthy developers subsidies.”

  Aides to Mr. Bloomberg said they were surprised, even startled, to see the tax cap proposal prominently featured in Ms. Quinn’s speech.

  When the real estate industry sought a similar set of tax incentives through a bill in the New York State Legislature in 2011, Mr. Bloomberg’s office singled out the tax cap for criticism. In a memo, a top aide said the plan was “not, fundamentally, an affordable housing program,” but “a large tax break dressed up as a housing policy.”

Click here for the rest of the article.