Development Tax Break Bill Faces Calls for Veto

One of the few major bills to pass through the state Legislature in recent days could stop at Governor Spitzer's desk, as the development tax break legislation is facing calls for a veto from numerous stakeholders, including the Bloomberg administration.

The legislation, known as 421-a, would update a residential development tax break, requiring developers seeking the incentive to devote 20% of new units to low-income residents within certain areas of the city. The City Council passed its own version of the bill in December that contained the "affordable" housing requirement for many of the city's fast growing neighborhoods.

A spokesman for the city's Department of Housing Preservation and Development, Neill Coleman, said the final bill further expanded the low-income housing requirements to neighborhoods where land values are not yet high enough, an act he said will likely slow development in those areas.

Further, the bill will harm the city's efforts to create middle-class housing, Mr. Coleman said, as a proposed 5,000-unit middle-income development in Long Island City, part of the Queens West project, would not qualify for the tax break, a change from the bill passed by the council. Mr. Coleman said that if the bill is not amended, the city hopes that Mr. Spitzer will use his veto to block it.

Council Speaker Christine Quinn is also calling for a veto of the bill. She has criticized the last minute political shuffling and a delay of the start date, among other issues.

"The State's bill, drafted in the dead of night without consultation with the Council or affordable housing advocates, eliminates many of the important and thoughtful provisions of the City's effort," Ms. Quinn's deputy chief of staff, Maura Keaney, said via email.

Much of the flurry of criticism has been directed at the bill's primary architect, Assemblyman Vito Lopez, a Williamsburg Democrat who chairs the Assembly's housing committee. Mr. Lopez, a veteran of Albany politics, sought to increase affordability provisions beyond the bill passed by the City Council, including a large expansion of the area that requires affordable housing and a decrease in income requirements for low-income tenants. In order to convince the real estate industry and the Republican-controlled Senate to agree, Mr. Lopez said he needed to give up concessions, which included pushing back the date for the new legislation to take effect.

But in ceding ground to the real estate industry, Mr. Lopez said he created an exception for the $4 billion Atlantic Yards project in Brooklyn, a move that has infuriated a base of affordable housing advocates who would likely have come out supporting the bill.

Instead, they have attacked the exception, which extends the tax break to the entire 6,000-unit complex — only part of it would have qualified under the council's bill — though the overall income requirements for the complex were reduced.

Mr. Lopez defended his bill as one that considerably expands provisions for affordable housing. "Someone taught me a long time ago that a good compromise is one that everyone dislikes," he said.

A spokeswoman for Mr. Spitzer said the administration is reviewing the bill.