Updated Senate Bills Would Make Several Notable Improvements to J-51

On March 9, 2026, the New York State Legislature released its one-house budget bills, and for those following the future of J-51, the split between the Senate and Assembly is now clearer.

The Senate kept J-51 in its one-house, Article VII education, labor, housing, and family assistance budget bill, S 9006-B. The Assembly, however, removed J-51 entirely from its counterpart bill, A 10006-B. At the same time, Senator Brian Kavanagh amended his standalone J-51 bill, now S 8170-A. [After the publication of this blog post, Assembly-member Edward Braunstein introduced A 10549 to the Assembly on March 13^th, as the “same as” companion bill to S 8170-A. The Senate Housing and Construction Committee is scheduled to discuss the bill on March 18^th.]

Based on the latest versions, the Senate budget bill and Senator Kavanagh’s amended bill now align with each other. That matters because it provides a clearer picture of what a Senate-backed J-51 extension and reform package currently looks like, even though the Assembly’s omission shows there is still uncertainty about what, if anything, will make it into the final state budget.

This is the latest development in a fast-moving J-51 story. As discussed in my earlier post about Governor Hochul’s FY 2027 budget proposal and her two February 19, 2026 technical corrections, Albany has been actively revising the next version of J-51 rather than simply extending the current program as-is.

The Latest Senate Changes

The newest Senate language would make five notable changes.

First, HPD would be required to update the Certified Reasonable Cost Schedule every two years. That is more frequent than in the Governor’s version, which would have required updates every three years, and it is also a change from the current program, which does not require updates on a fixed schedule. For building owners, that could matter because the cost schedule plays a direct role in how much of the work can ultimately be recognized for benefit purposes.

Second, the Senate language adds a new way for a rental building to qualify as an Eligible Rental Building: at least 90% of the apartments would have to be subject to rent regulation. That appears aimed at bringing more heavily rent regulated buildings into the program, even if they may not fit neatly into the other affordability pathways, such as the requirement that at least 50% of the dwelling units be affordable at less than 80% of area median income.

Third, for homeownership buildings such as co-ops and condos, the average assessed value limitation would increase to $75,000. That is higher than the $60,000 threshold in the Governor’s version and much higher than the $45,000 limitation in the current program. The Senate language would also require that limitation to be adjusted annually for CPI increases. That annual inflation adjustment is a new addition and may help prevent the threshold from becoming outdated as assessments rise over time.

Fourth, the proposal would allow the J-51 filing fee to be included in the abatement amount. Under the Senate approach, the maximum abatement would be 100% of certified reasonable cost plus the filing fee. That is broader than the Governor’s version, which would have allowed a maximum abatement equal to 100% of certified reasonable cost, and broader than the current program, where the maximum abatement is 70% of certified reasonable cost.

Fifth, the filing fee itself would be changed to $75 per apartment, capped at $20,000 per application, with annual CPI adjustments. That is different from both the Governor’s version and the current program, which use a fee of $1,000 plus $75 per apartment over six, without a cap and without annual CPI-based adjustments.

What These Changes May Mean

At a minimum, these latest changes suggest that the Senate is not just trying to preserve J-51 in name only. The direction of the Senate language appears to be toward a more workable program in several areas, including broader rental-building eligibility, a higher assessed value cap for co-ops and condos, more regular updates to the cost schedule, and a more measured filing-fee structure.

For co-ops and condos in particular, the jump from a $45,000 average assessed value limitation under the current program to $75,000, combined with annual CPI adjustments, could make a meaningful difference in whether some buildings can participate.

For rental buildings, the new 90% rent-regulated pathway may also be important. Many owners and managers of rent regulated housing have been watching closely to see whether the next version of J-51 would better reflect the economics of maintaining older regulated buildings.

The filing-fee revisions are also worth watching. A fee cap may make the program more predictable for larger buildings with more than 260 apartments, and allowing the filing fee to be folded into the abatement calculation would reduce some of the friction that comes with the upfront application cost.

But the Assembly’s Omission Matters

The Assembly’s decision to remove J-51 from A 10006-B is significant. Even if the Senate has now coalesced around a revised approach, J-51 is not yet on a clear path to enactment. Until there is agreement among the Governor, the Senate, and the Assembly, building owners should be careful about assuming that any particular version will become law.

That said, the issue is plainly still alive. The Senate kept it in the budget. Senator Kavanagh amended his standalone bill. And the recent sequence of changes suggests that the substance of a new J-51 program is still being negotiated rather than abandoned.

What Building Owners Should Watch Now

For now, owners, boards, and managing agents should keep watching a few points.

One is whether the Assembly restores J-51 in budget negotiations or whether the issue moves outside the budget process and onto a standalone bill track.

Another is whether the final version keeps the higher co-op and condo assessed value cap, the new 90% rent-regulated eligibility path, and the more favorable treatment of filing fees.

A third is timing. The current J-51 Reform Program applies to qualifying work completed before June 30, 2026. That means the details of any replacement or successor program matter not just in theory, but for buildings trying to plan capital work and benefit strategy now.

Bottom Line

As of now, J-51 remains in play, but it is not yet settled.

The Senate’s one-house budget bill and Senator Kavanagh’s amended bill point in the same direction and, in several respects, improve on the Governor’s version. But the Assembly’s removal of J-51 from its one-house bill is a reminder that this is still an active negotiation, not a finished deal.

I will continue tracking these developments as the budget process moves forward over the next few weeks.

Read my prior article about the Governor’s original proposal from January 2026: Hochul’s FY 2027 Budget Would Extend and Reform J-51 Again: What NYC Buildings Should Know (and Watch)