Pratt Center Research

Building Resilient Communities

Still Subsidizing Luxury Development

Report  |  December 6, 2006

This report calls for a reform of New York City's "421-a" tax exemption program to stop giving tax breaks to building owners who do not include affordable housing units. The “421-a” tax exemption program was created in the 1970s, when the city was on hard times, to encourage developers to build new housing. In 2006, the City gave $400 million in tax breaks through the 421-a program, with most of that going to subsidize luxury development. This report highlights 54 condo buildings – built in the last few years or currently under construction – that would still be eligible for 421-a tax relief, even if they would have been built after the reforms proposed by the Speaker and the Mayor.