Hizzoner renews his push to convert office space to apts.
Mayor Adams renewed Monday his push to convert office space to apartments by pressing Gov. Hochul and state lawmakers to loosen restrictions around such conversions. He also called for them to adopt a revamped tax break that until recently was used as an incentive to build market-rate and affordable housing.
Adams made his thoughts on the issue known during a tour of 160 Water St., a Financial District office building now in the process of being converted to market-rate apartments.
“The bottom line is we must make it easier to convert office buildings — like the one we just toured — into housing for New Yorkers,” said a hardhat-clad Adams. “We need to look at, how do we have a different approach to this.”
The push for more residential space comes as the city struggles to address a scarcity of housing stock, a high demand for affordable housing and office space that’s been left vacant as more and more people are working from home.
The governor and mayor are generally simpatico on the issue of conversions.
In December, the two announced plans to drastically increase the city and state’s housing stock over the next decade. They agree that conversions are one way to do that, and they’d like to see a new version of the 421-a tax break for developers to incentivize new units.
But enacting those policies will require buy-in from state lawmakers, many of whom are opposed to 421-a or tax breaks like it because they view it as a huge sop to already-wealthy developers funded through taxpayer cash.
Annually, the tax break has sapped the city of about $1.77 billion in tax revenue.
Assemblyman Kenny Burgos (D-Bronx) said he’s open to loosening conversion requirements and a revised tax break, but said revisions on the tax break must include a provision for more affordable housing.
Adams pushed back against opponents of 421-a on Monday, saying the break is “not a giveaway,” but “an incentive to get more affordable housing units in place.”
“Without it, we simply will not be able to build affordable housing at the rate we need,” he said.
Adams’ Monday construction-site tour came as legislators in Albany have been locked in budget negotiations with Hochul and her team. During last year’s budget negotiations, the governor included a revised version of the 421-a tax break, calling it 485-w, but lawmakers ultimately rejected that provision of her proposed budget.
This year, Hochul is negotiating with state lawmakers before floating another revised tax break.
The existing 421-a tax break has already lapsed. Hochul’s current budget proposal includes an extension for that program for projects already underway. But the budget does not include a forward-looking version of the program.
More than a year into his term, Adams, a former state senator, has a mixed record in Albany. He has bristled over coverage about his failed push to further change the state’s bail laws last year and is quick to point out that he’s scored wins in Albany as mayor, including his push to expand the earned income tax credit among city residents.
On Monday, he sounded a bit more cheery about this year’s state budget process, saying his team is engaging in “very fruitful and healthy conversations” in Albany to implement his goals.
“I must say that both houses ... understand the urgency of the moment, that we need more
housing, and the only way we can have more housing is to build more housing,” he said. “We are excited about the possibilities of what is going to come out of Albany.”
But Burgos said Hochul’s team appeared much more proactive in negotiations around a tax break last year, and that this year’s talks have seemed “a little bit lazy.”
Spokesmen for Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) and Assembly Speaker Carl Heastie (D-Bronx) did not immediately return calls.
The governor “looks forward to working with the Legislature on a final budget that meets the needs of all New Yorkers,” said Hochul spokeswoman Hazel Crampton-Hays.
Asked about the status of a revised 421-a program, Crampton-Hays referred to Hochul’s State of the State address, in which she said that without a program like 421-a in place, developers “will only build condominiums or build elsewhere, which isn’t the outcome we need.”
Coming to a deal on converting office space to residential is likely to prove an easier lift in Albany.
The building that Adams and his staff toured Monday is eligible for such a conversion under current state law, but many other buildings are not.
Current law outlines restrictions depending on where the building is and when it was built. Loosening those rules would allow for more conversions.
“We’re also looking for the authority for a tax exemption that would allow the possibility of affordability, affordable units whenever there is a conversion,” said Maria Torres-Springer, Adams’ deputy mayor for economic and workforce development.
“Those are the two things that have to work hand in hand.”