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He wants to impose a moratorium on luxury development in the city, radically toughen the state’s affordable-housing tax-break program, fund mass transit with a carbon tax, and even put an additional tax on apartments on high floors in luxury buildings — and to get it done, he’s taking on a long-time Democratic pol.
But this is no insurgent democratic socialist who beat a stodgy Dem incumbent with a primary challenge from the left, like state Senate candidate Julia Salazar or House candidate Alexandria Ocasio-Cortez.
He’s Anthony Arias, the Republican candidate running against Democratic state Sen. Brian Kavanagh in District 26, which covers Lower Manhattan and parts of Brooklyn.
Arias, a self-described “liberal Republican,” is the 28-year-old founder of Sada Capital, a financial advisory firm. He is also president of the Greenwich Village-Chelsea Chamber of Commerce, and earlier this year he joined Community Board 1.
The pro-choice, green-boosting candidate may seem more like a Democrat, but Arias wants to pursue his liberal policy goals through fundamentally Republican means, in most cases favoring incentives over regulation.
Rather than ban plastic straws, for example, why not offer a tax credit to businesses that use paper ones instead? Businesses that invest in energy-efficient lighting and appliances could get a discount on business-license renewals.
So long as policies aren’t taking away options for people or forcing “excessive taxes” and “over-regulation,” he likely supports it, according to Arias.
A centerpiece of his platform — and one of his most radical proposals — combines three of his priorities: limiting luxury development, incentivizing affordable housing, and funding storm-resiliency infrastructure.
Arias is proposing to replace the current affordable-housing tax break known as 421-a, which offers developers an incentive to rent 25-to-30 percent of units in new residential construction at below-market rates, with a new “421-b” that would require 100 percent of units to be below-market rate for a project to receive the tax benefit.
The stringent new requirements, according to Arias, would greatly reduce the number of projects taking advantage of the tax break — and thus reduce the amount of revenue the city foregoes, which adds up to $1.4 billion a year, according to the Department of Finance’s Division of Tax Policy.
His idea is to take that additional city revenue and place it in a “lockbox” to fund the “Big U,” a massive, 10-mile shoreline protection project designed after Hurricane Sandy as a to protect Lower Manhattan from storm-surge flooding.
“God forbid one of those storms that’s going into the Carolinas right now were to tick up here into the north,” Arias said, referring to Hurricane Florence, which recently battered the Carolinas with massive flooding. “We would be screwed again.”
Though Arias’s proposal for a 100-percent requirement could significantly reduce the absolute number of affordable units the tax incentive produces, the self-described “Teddy Roosevelt Republican” said his distaste for runaway luxury development is also a key motivator in wanting to reinvent the 421-a tax law.
“No more 80/20 or 75/25 right now,” Arias said, referring to the percentage breakdown often seen between market-rate and affordable units. “No, screw the whole damn thing. We have enough with all of that luxury stuff. Let’s just do 100 percent [affordable units].”
But he also has an idea to help make housing more affordable from the other end, with a rental tax credit that would be deductible from state income taxes for renters.
And Arias has other proposals to both fund resiliency infrastructure and reduce incentives for excess luxury development. One is a tax on foreign nationals who buy up luxury units through shell companies — since such transactions have driven much of the luxury development boom in Manhattan — though he said his tax attorney is still looking into how it could be targeted and whether or not that would be legal.
But perhaps Arias’s most Bernie-esque proposal is an extra tax on luxury apartments on the highest floors of a building. This view tax would not only raise revenue to protect ground-floor plebs from storm flooding, but also disincentivize the practice of including empty floors of undeveloped space in a luxury tower to boost the height of the pricey apartments at the top.
Despite his vocal antagonism to luxe overreach, Arias insists he’s not anti-development — or even anti-gentrification — he just thinks that the current boom in luxury buildings is not the best use of Downtown’s scarce real estate, at least from the standpoint of most people who live and work there.
“We’re not saying we’re anti-development,” he argued. “It’s just we want the right kind of development, the right kind of gentrification. And in this case, we wanted to be focused on green small business and affordable spaces.”
Kavanagh’s office did not respond to requests for comment on Arias’s proposals by press time. The senator was elected last year after spending a decade in the lower house representing Assembly District 74, which overlaps with his senate district mostly in the Lower East Side.
Arias may have slim odds as a Republican to oust a Democratic incumbent from a seat representing Lower Manhattan and western Brooklyn, but he said he’s throwing his hat in the ring with hopes of bringing younger people to Albany.
“Politics needs to start coming back and be more community centric,” he said. “And I think it’s also about time that our generation gets into office, too.”