- William C. Rudin | REBNY Chairperson
- James Whelan | REBNY President
- John H. Banks | REBNY President Emeritus
- Code of Ethics
- REBNY Residential Listing Service
- Become a Member
- Benefits & Rewards
- REBNY Action Network
- REBNY Services
- Our History
- Contact Us
- Looking for a NYC real estate broker?
- Contests & Awards
- Sponsorship Opportunities
- REAL ESTATE EDUCATION
- MEMBER SPOTLIGHT
- GIVING BACK
Union Labor Likely to Curtail 421-A Development in Less Affluent Areas, Study Finds
November 11, 2015
The 421-a program, a controversial affordable housing tax abatement which is set to expire this December, will most likely be renewed pending a deal between the real estate industry and construction trades. (If no deal is reached, the program, which has been in existence since 1971 and received a six-month extension this June, will end)
The use of union labor, however, which been never before been a component of 421-a, is almost certain to increase construction costs. A new study from the Furman Institute at NYU that looks at possible outcomes of the program’s revision, finds that higher construction costs could significantly hinder the program’s effectiveness as a generator of affordable rental housing, particularly in low- to moderate-income neighborhoods.
“In the less strong rental markets, a rise in construction costs could leave mid- and high-rise rental development uneconomic at current market rents even if land were free,” the study notes, adding that deeper and/or additional cross subsidies may be necessary to spur construction in these cases.