A real plan to build housing: Mayor Bill de Blasio has proposed an overhaul of 421-a to encourage the creation of more affordable housing, but will it?

A debate over New York City's primary property-tax break, known as 421-a, is coming to a head in Albany. Mayor Bill de Blasio has proposed an overhaul to spur construction of affordable and market-rate rentals. Breaking from the past, it would eliminate the tax exemption for condos and peg subsidies to affordable-housing requirements instead of to neighborhoods—a recognition that real estate markets change over time, often unpredictably.

Developers would get three exemption tiers to choose from, each with a proportional affordable-housing mandate. The genius of this approach is that it provides an incentive to build mixed-income rental projects whether a market is strong, weak or in between. Developers who opt for the most valuable tax break—in rich areas, where property values are highest—would have to subsidize very low-income tenants in 25% of their units. The tier most attractive in poor areas requires more affordable units (30% of the total) but allows for a broader mix of incomes and comes with a city subsidy.

The likely result—more units at more price levels in more places—is what the city needs. Our fundamental housing problem is that demand outstrips supply. The mayor estimates that his program would add 25,500 units over 10 years. That's not a game-changer in a city of 8.4 million people, but it would help.

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