Governor Hochul’s newly released Budget Bill contains many new and significant provisions to incentivize, require and / or facilitate production and preservation of housing and affordable housing in New York City and New York State. Rosenberg & Estis, P.C. is preparing a “Deeper Dive” into the Governor’s main housing proposals and will issue further alerts shortly. We will also be monitoring how the Budget Bill is received by the NYS Legislature, whose approval is critical, including whether the Legislature proposes a replacement for the expired 421-a program for new construction projects (as opposed to the “AHCC” discussed below for conversions of existing structures). Highlights of the Budget Bill include:
I. New Property Tax Exemption For Conversions to Residential. [PART P] Conversion of non-residential buildings to residential use would be incentivized by a new property tax exemption in exchange for making at least 20% of the converted apartments affordable housing. Proposed new Real Property Tax Law §467-m would create “Affordable Housing from Commercial Conversions Tax Incentive Benefits” or “AHCC.” Contains some similarities with both the Mandatory Inclusionary Housing program of NYC Zoning Resolution and the expired 421-g and 421-a(16) property tax exemption programs. Proposes permanent Affordability for Affordable Housing Units, but the Market Units would not be subject to Rent Stabilization. Watch for R&E’s “Deeper Dive.”
II. Extension of 421-a(16) Completion Date Deadline. [PART R ] New construction residential projects vested for the 421-a(16) property tax exemption would receive a 4-year extension of the Completion Date deadline until June 15, 2030. Watch for R&E’s “Deeper Dive.”
III. Rehabilitation Program (substitute for expired J-51 property tax benefit). [PART M] Eligible Projects can be either rentals or homeownership (coop or condo). Certain rental projects may qualify for this benefit if they contain at least 50% affordable units; are owned or operated by a limited-profit housing company; or receive substantial governmental assistance pursuant to a Regulatory Agreement. Other rental projects may also qualify but with additional regulatory restrictions. Homeownership projects have an average assessed value cap of $45,000 per unit and must be owned by a Mutual Company or a Mutual Redevelopment Company that enters into a Regulatory Agreement. Watch for R&E’s “Deeper Dive.”
IV. Multiple Dwelling Law Changes To Allow Conversions to Residential. [PART J] Would allow certain properties to be exempted from the MDL’s 12.0 residential Floor Area Ratio cap. Watch for R&E’s “Deeper Dive.”
V. New Homes Targets and Fast Track Approval. [PART F] Would give NYS DHCR the authority to potentially override local denials of applications for land use actions where a locality (in NYC a Community Board District) is not meeting certain specified housing growth targets. Watch for R&E’s “Deeper Dive.”
VI. Transit Oriented Development. [PART G] Would require minimum residential density be authorized by localities within specified distance from transit stations, with certain exceptions. Watch for R&E’s “Deeper Dive.”
If you have questions about the Budget Bill and its proposals please contact your R&E attorney or Daniel M. Bernstein at [email protected] for further information.