421-a Reform

Make incentive fairer and more

efficient

Existing 421-a benefits are complex, confusing,

and cant keep up with the market
Inside GEA

Outside GEA

10
Year:

Manhattan below 110 Street only:

No onsite affordability required but must purchase negotiable
certificates

N/A because Manhattan below 110 Street is only area

eligible for 10 year benefit and is entirely within GEA

15
Year:

Manhattan above 110 Street and other boroughs:

No onsite affordability required but must purchase negotiable
certificates

Available, no affordability requirement

Manhattan below 110 Street only:

20
Year:

Substantial Government Assistance:

<25 Units: Onsite 20% <= 120% AMI
>25 Units: Onsite 20%<= 120% AMI (average at 90% AMI )

N/A because Manhattan below 110 Street is only area

eligible for 20 year benefit and is entirely within GEA

Without SGA:
Onsite 20% <= 60% AMI

25
Year:

Manhattan above 110 Street and other boroughs:

Substantial Government Assistance:

Pursuant to affordable housing program

Substantial Government Assistance:

<25 Units: Onsite 20% <= 120% AMI
>25 Units Onsite 20%<= 120% AMI (average at 90% AMI)

Without SGA:
Onsite 20% <=100% AMI but average <=80% AMI

Without SGA:
Onsite 20% <= 60% AMI

$30,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$-

The benefit varies tremendously by neighborhood

2014 421a Expenditure by Neighborhood
(Benefit Year 1-5)

Example of GEA Inefficiencies

Production and Cost Projections

Projected New Affordable Housing Units Created Over
the Next Ten Years
30,000

25,500

25,000
20,000
15,000

12,400

10,000
5,000
0
Current 421a

Proposed 421a

Projected 421a Subsidy per Affordable Unit

$700,000
$600,000

$573,000

$500,000
$391,000

$400,000
$300,000
$200,000
$100,000
$0
Current 421a

Proposed 421a

Rentals: Proposed Menu of Options

421-a Rental Affordability Requirement
Option 1
Units

10%
Low-Income
Units
ModerateIncome Units
Middle-Income
Units
Total / Blended
Affordability
Other
Government
Subsidy
Allowed?

10%

Option 2

Income
Units
Affordability

Income
Affordability

20%

60% AMI*
($46,620)

30%

130% AMI
($101,010)

30%

130% AMI

20%

60% AMI

10%

5%

130% AMI
($101,010)

20%

70% AMI
($54,380)
130% AMI
($101,010)

25%

66% AMI

30%

110% AMI

Bonds, 4% credits

CURRENT 421a

Income
Units
Affordability

Income Affordability
Units
($ for household of 3)
40% AMI
($31,080)
60% AMI
($46,620)

Option 3

Bonds, credits, HPD/HDC

No
discretion on direct subsidy

Bonds, credits, HPD/HDC

discretion on direct subsidy

Neighborhood Examples: Affordable Housing To Be Provided

Neighborhood Examples -- Affordable Housing To Be Provided

Current 421-a
Program

Proposed 421-a
Program

Downtown
Brooklyn

Astoria,
Queens

Williamsbridge,
Bronx

(currently inside GEA)

(currently outside GEA)

(currently outside GEA)

20% at 60% AMI ($46,620)

None Required

None Required

10% at 40% AMI ($31,080)

10% at 60% AMI ($46,620)
5% at 130% AMI ($101,010)

10% at 70% AMI ($54,380)

20% at 130% AMI ($101,010)
30% at 130% AMI ($101,010)

(25% overall
averaging to 66% AMI)

Note: All incomes given for a family of 3.

(30% overall
averaging to 110% AMI;
may seek direct City subsidy
to provide more affordable
units and deeper affordability)