New York’s Legislature did not pass a bill ending the Opportunity Zone tax-credit program.
The federal tax credit was implemented during the first Trump administration to build more affordable housing in low-income neighborhoods. A New York University Furman Center report found 60% of new apartments built with the credit in low-income areas are rented at market rate and do not offer rental assistance.
Tom Speaker, legislative director for the advocacy group Reinvent Albany, said it has been problematic for years but there is opposition to repealing it.
“The argument real estate companies will make is, tax breaks like this are essential for leading to more housing,” Speaker explained. “They will cite the ongoing housing crisis in New York (City) where there’s a low vacancy rate and prices are skyrocketing.”
Speaker argued the position of the real estate companies is not true, as evidenced by the Furman Center report’s findings. He feels it is one of many tax breaks helping to build housing for upper-middle-class New Yorkers.
The state Senate has passed the bill ending the Opportunity Zone tax credit each year it has come up, but the Assembly has not. By next year, both New York City and New York State could lose up to $424 million annually in tax revenue from keeping the credit in place.
New York already had financial losses from keeping the tax credit. A 2023 Reinvent Albany report noted New York investors can access the credit by investing in an Opportunity Zone anywhere in the country but the opportunity zone credit can apply to many businesses, none of which is low-income housing.
Speaker stressed the program’s hidden costs could be detrimental for New Yorkers.
“This is going to be happening during what’s looking like a historic budget crisis due to pending federal cuts that are going to deeply affect the state and the city’s coffers,” Speaker observed. “When that happens, it’s going to affect services the state does, like clean water, the environment or public transit.”
The Fiscal Policy Institute reported the Congressional budget reconciliation will cost the state government more than $15 billion annually. State elected leaders will have to choose between spending cuts to vital programs or new tax measures to keep them afloat.
Edwin is a reporter and producer in North Tonawanda, New York. He’s previously reported for the Niagara Gazette and the Ithaca Times. Edwin got an early start in radio interning for WBFO-88.7FM, NPR’s Buffalo affiliate. In 2018, he graduated from SUNY Buffalo State College with a B.A. in Journalism, and in 2022, graduated from Syracuse University with an M.S. in Communications.