Governor Hochul’s 2022 State of the State Briefing Book includes a proposal to replace the 421-a tax incentive aka Affordable New York Housing Program (“421-a”) with the following changes:
• Strengthen affordability to service lower income households than 421-a.
• Create longer-term affordability, providing more stability for low-income households.
• Safeguard long-term availability of affordable rental units across NYC neighborhoods.
• Restructure the tax abatement to maximize efficiency of taxpayer dollars through NYC and NYS climate regulations requiring carbon-neutral technologies, electrification and electrification-ready building systems.
• Allow flexibility to promote development of smaller, financially viable buildings.
• Create an all-affordable homeownership option allowing for low- and moderate-income homeownership opportunities across NYC.
The current version of the 421-a program requires that construction commence prior to June 15, 2022. We remain optimistic that the Governor’s proposal, as outlined above and as considered by the NYS Legislature, may address criticisms of the 421-a program and provide a viable pathway to continuing residential development in NYC.
We will keep you abreast of any future developments, including legislation once prepared. Please contact Daniel M. Bernstein for more information.