Mayor signs 421-a into law.

Mayor Michael Bloomberg signed into law December 28, legislative reforms for the 421-a tax incentive program.

Bloomberg said: "The 421-a tax incentive program was created in 1971 to spur housing development at a time when many, including developers and those in the private sector, lost hope in the City and did not invest enough in new housing. Under the program, housing developers within designated areas are given tax incentives to develop housing. The program has helped fuel the construction of over 110,000 apartments in the City.

"However, the City and its real estate market have changed dramatically since that time. In recognition of the need for reform of the program, the Administration convened a 26-member task force in February 2006 to examine 421-a and suggest changes that would better align it with the current real estate environment."

The legislation, introduced by Speaker Christime Quinn, adopted the Task Force's changes with a number of modifications made by the City Council.

The primary elements of the legislation will:

* Expand the Geographic Exclusionary Area to include all of Manhattan, south of 136th Street in West Harlem, south of 126th Street in Central Harlem, south of 117th Street in East Harlem; all of Downtown Brooklyn, Carroll Gardens, Cobble Hill, Boerum Hill, Park Slope, most of Fort Greene, Prospect Heights, Williamsburg and Greenpoint, and into Sunset Park and Bushwick; and along the waterfront from Red Hook north to Astoria in Queens.

* Grant 25 years of benefits only to developments that provide affordable housing, ensuring for the first time that 421-a provides an incentive for low-income housing throughout the city.

* Set a limit on the total amount of 421-a tax benefits that any market rate unit may receive. Only the first $65,000 of an apartment's assessed value would receive the 421-a tax exemption.

* Abolish the existing negotiable certificates program and create an Affordable Housing Trust Fund. This $400 million fund, targeted primarily to the 15 poorest neighborhoods in the City, would be used to finance the development and rehabilitation of affordable housing in areas outside of the Geographic Exclusionary Areas.

"The passage of [this] bill will strengthen the connection between the 421-a program and the development of affordable housing. This will add to our record of building for the City's future by providing $300 million, in addition to the $400 million Affordable Housing Trust Fund, for our $7.5 billion New Housing Marketplace Plan, which will provide affordable housing for 500,000 New Yorkers," added Bloomberg.