New NY Housing Laws: New Housing Finance Laws & J-51 Property Tax Abatement Program On October 23, 2023, New York State Governor Hochul signed legislation relating to affordable housing finance and a new property tax abatement for alterations and improvements to New York City apartment buildings.
The affordable housing finance laws raise the bond capacity of NYC’s Housing Development Corporation, add new financing tools and also add new sections to the Private Housing Finance Law (“PHFL”) which clarify the applicability of rent stabilization to certain PHFL assisted properties. R&E will soon be scheduling and delivering a webinar on the rent stabilization implications for affected properties, specifically with respect to those multi-family properties rehabilitated using PHFL Article XV financing.
The property tax abatement program, if also enacted by the City Council, will replace the expired J-51 program (the “New J-51 Program”). The New J-51 Program offers certain eligible properties the opportunity to receive a 20-year partial property tax abatement through eligible rehabilitation and alteration work.
Highlights of the New J-51 Program Include:
- The City Council must approve the program by June 30, 2025, before it becomes effective.
- The program would apply to construction commenced after January 1, 2020, and completed between June 29, 2022 and June 30, 2026, though construction must complete within 30 months of commencement.
- Up to 20 years partial abatement benefits will be capped at 70% of the “certified and reasonable” cost of the eligible construction, and the abatement is capped at 8⅓% of such cost annually.
- Rental buildings with at least 50% of the units “affordable” will be subject to yet-to-be-determined affordability and rent stabilization requirements, including subjecting market units to rent regulation for 15 years.
- Homeownership buildings (condos and co-ops) may be eligible if the average assessed valuation does not exceed $45,000 per apartment.
- Applications are due within four months of the program’s effective date or construction completion.
- Future local law and rules of NYC’s Department of Housing Preservation and Development (“HPD”) will be required to implement the New J-51 Program in NYC and to state the affordability requirements and the reasonable cost of work under the New J-51 Program.
If you have an existing residential property for which you have recently performed or are contemplating renovations and would like to evaluate whether it may qualify for the New J-51 Program, please contact your trusted Rosenberg & Estis, P.C. attorney or Daniel M. Bernstein (regarding rental properties) or Benjamin M. Williams (regarding homeownership properties), both of whom authored the above.