New York developers facing criminal charges

The Manhattan district attorney, Mr Alvin Bragg has brought criminal charges against six real estate developers and their respective companies. The developers are alleged to have defrauded the state’s TAX exemption program, which promotes affordable housing.

Speaking about the allegations, Mr Bragg said, “These developers allegedly abused a government program meant to provide New Yorkers access to desperately needed affordable housing. Not only did they illegally charge substantially higher market rents for years, but they did so while personally reaping the benefits of generous property tax abatements. When I announced our Housing & Tenant Protection Unit last week, I said that we would take a targeted approach to complex and pervasive criminal activity that diminished our already limited stock of affordable housing, and this case is an example of just that.”

They are said to be in breach of the 421-A TAX program, which was designed to incentivize the creation of affordable housing. The program offers generous TAX breaks to property developers who agree to reserve a percentage of the units in an apartment as affordable units for those who desperately need them.

According to the charges, the six developers allegedly violated the terms of the program between the years 2011 and 2019. The documents state that they falsely claimed to rent the designated units per 421-A rules. However, they rented these units at a higher price to various unauthorized tenants. Some of the units fetched more than $1000 per month above the approved affordability level.

Because of this, the defendants are said to have illegally reaped more than $1.6 Million in TAX benefits.

The Housing & Tenant protection unit was recently announced and aims to root out criminal activity among landlords and developers.

“By taking a targeted approach to complex and pervasive criminal activity, we can root out the bad actors who are seeking to game the system for profit at the expense of ordinary New Yorkers,” continued Mr Bragg.

New York City Department of Investigation Commissioner Jocelyn E. Strauber said this is a step in the right direction to ensure access to affordable housing for all New York residents.

“At a time when affordable housing is crucial for New Yorkers and for the City’s recovery from the pandemic, these landlords, as charged, enriched themselves by fraudulently obtaining over $1 million in tax credits from the city that were intended to promote affordable housing.”