Neighbors & Community Leaders Call On Albany To End Tax Break For Luxury Real Estate Developers

Facing the 23-story development that looms over the row of delis, pharmacies, and other mom-and-pop shops that line Flatbush Avenue, more than 100 people gathered at 626 Flatbush Avenue Thursday morning to protest the 421-a tax exemption program that neighbors said is responsible for lining luxury developers’ pockets with taxpayers’ money and paving the way for rapid gentrification.

In between shouts of, “No 421-a! We want to stay!” and “Once I pay my rent, all my money is spent!” neighbors and other community leaders slammed the tax exemption program, which provides tax breaks for developers who offer affordable housing in newly constructed buildings. The program is set to sunset on June 15 of this year — meaning state legislators can vote on it to keep or going or amend it, as well as get rid of it entirely.

Many of the protesters held particular vitriol for Hudson Companies’ 626 Flatbush Avenue, a long-contested development that has benefitted from the 421-a program, is now being constructed and ultimately will be a 23-story building with 254 units. Eighty percent of the units will be rented at market rate and 20 percent will be restricted for individuals earning 40 to 50 percent of the city’s area median income ($33,400 to $41,750 for a family of four).

“Our government gives 626 Flatbush Avenue millions of dollars in tax breaks — money that should be for the people, and developers use these tax breaks to build studio apartments that will rent for $1900!” said Marquetta Bell, an area resident for 11 years and member of the Flatbush Tenant Coalition, one of the groups that organized Thursday’s protest. “How can this happen? This is our hard-earned money. Shame on you, New York State Assembly and Senate. Shame on you, Governor Cuomo. You cannot allow this type of economic devastation to continue in our neighborhoods. You must end the 421a.”

Numerous other speakers lashed out against 626 Flatbush Avenue’s market rate rents, saying the cheapest market rate unit will be $1,850 for a studio. We have reached out to the Hudson Companies for a comment and will update this as soon as they get back to us.

“That means 626 Flatbush will have over 200 units that will speed the rate of gentrification,” said Donna Mossman, of the Crown Heights Tenants Union, another organizer of Thursday’s event.

Other critics at the protest made note of a recent report from the Association for Neighborhood and Housing Development, which stated that the 421-a program cost the city $1.1 billion in forgone tax revenue during the 2013 fiscal year.

Linda Williams, who has lived in Flatbush for about 34 years, said she has seen many of her neighbors pushed from her rent-regulated building in recent years.

“I feel very distressed,” Williams said. “…That’s our tax money they’re using to build these buildings, and we can’t afford to live here.”

This sentiment, of course, isn’t reserved for just the residents living near 626 Flatbush, and many protesters said the building is emblematic of a rapidly changing real estate landscape throughout our area. Numerous developments are coming into the area (The Q at Parkside blog just published this really interesting map of many of the projects happening in the Flatbush area) that neighbors said will result in unaffordable housing for longterm residents.

This booming real estate market has created a litany of problems for our neighbors and others throughout the city, with Governor Andrew Cuomo recently noting that tenant harassment complaints in the city’s problem-plagued Housing Court have nearly doubled since 2011. The governor noted, when launching a tenant protection task force, that landlords will — as our neighbors have said for years — use a variety of illegal tactics, including “disruptive and dangerous renovation and construction project,” to “force tenants into vacating rent-regulated apartments.”

Once landlords push people from their rent-regulated units, they’re able to fetch far higher rents. Under rent regulation, when a tenant vacates a rent-regulated apartment, the owner can automatically increase rents by 20 percent, and further increase rents by making apartment improvements. If the rent gets higher than $2,500 per month, the apartment automatically exits the rent regulation system and rent can be raised dramatically.

“When a building like 626 Flatbush goes in, that means property values will go up dramatically, and people who live here won’t be able to live here anymore,” said Jean Hunte, one of the protesters. “They’re going up now, but they’ll skyrocket with 626.

“Right now, tenants are losing their rights — it’s important Albany hears us,” Hunte continued. “Once we lose our rights, we’re losing our homes. People have been here many, many years, and they’re being pushed out. It’s not fair.”

As for what could happen in Albany? Groups like the Flatbush Tenant Coalition are calling for lawmakers to end the program entirely, though other legislators, including such local representatives as state Sen. Kevin Parker, Assemblyman Jim Brennan and Assemblywoman Rodneyse Bichotte, have said they don’t believe 421-a will ever entirely go by the wayside, in part because of the real estate lobby’s power in Albany, and instead will be altered prior to the lawmakers’ vote.

“You’ll never get rid of it,” Parker said during the Flatbush Tenant Coalition’s recent trip to Albany. “There’s not the political will.”

However, not all lawmakers agree. Jarvis Houston, the chief of staff to state Sen. Jesse Hamilton, said at Thursday’s protest that Hamilton is “totally against 421-a — totally.”