All the cheering while Innovation QNS’ $2 billion proposal clears city council hurdles will fade if the plan stalls because state legislators refuse to replace the expired 421a tax exemption, the New York’s left firmly rejects.
While the deal aims to create approximately 3,200 homes, 45% of which are affordable, in southern Astoria, it rests on the assumption that the state will create a realistic new form of 421a affordable housing tax break to incentivize developers to accomplish.
Innovation QNS’s 1,400+ affordable units, including for 500 households earning 30% of the region’s median income, plus 157 homeless people, would make it the gold standard for future development projects.
But the city can’t afford to foot the bill for greater affordability without a 421a-like program. It is financially impossible for developers to offer almost half of the units for rent below market price without a tax credit.
And a city already facing multibillion-dollar deficits and A looming recession cannot possibly build many new subsidized homes on its own. Heck, NYCHA is going to have a hard time replacing even its own rapidly aging housing stock.
Gov. Kathy Hochul sought a 421a replacement this year, but the Legislature balked as the hard left went ballistic. Progressives, against all reason, insist that subpar homes must magically appear without the people building them getting a decent return on their investment.
But the fact remains that the standard property tax on new residential buildings makes it prohibitive to build anything but high-end complexes: if you want to build low-income units, you have to make it affordable for the builder.
An analysis by the Citizens Budget Commission warned in May that phasing out 421a without a successor would reduce overall rental housing construction, particularly affordable housing development, and lower city property tax revenues.
Unless Hochul, House Speaker Carl Heastie, and Senate Majority Leader Andrea Stewart-Cousins find a way to confront the mad left, Innovation QNS will not go ahead, and neither will most other new affordable housing plans.