Governor Issues Proposals to Increase Housing Supply, Incentivize Conversions and Development

by | Jan 23, 2024 | Industry Updates

Governor Kathy Hochul has released five key legislative proposals to increase housing supply, incentivize conversions, and develop new multifamily housing with affordability requirements.

  • Create an “Affordable Housing from Commercial Conversions” or “AHCC” property tax incentive program for including affordable housing in conversions of non-residential properties to residential use.
  • Create a new 421-a replacement program called “Affordable Neighborhoods for New Yorkers” or “ANNY,” to provide property tax incentives for including affordable housing in new multiple dwellings.
  • Extend the Affordable New York / 421-a Completion Date deadline by five years to June 15, 2031, for eligible projects that commenced by the June 15, 2022, deadline. (The current deadline is June 15, 2026).
  • Lift the 12.0 FAR in New York City.
  • Allow New York City to legalize certain basement and cellar apartments and provide new protection for existing tenants.

The new tax incentive proposals are similar to previous proposals by the Governor but with minor and sometimes crucial changes. These proposals also delegate significant authority to the City of New York and, specifically, the Department of Housing Preservation & Development (HPD) to establish the details of these programs. We have also yet to see if the Governor and the Legislature can reach an agreement on these programs and, more importantly, what tenant protections may be required to reach such a deal.

R&E is closely monitoring developments as the legislative session progresses. If you have any questions, please contact your trusted R&E attorney or Daniel M. Bernstein, who authored this alert.