4.3 KiB
| title | chunk | source | category | tags | date_saved | instance |
|---|---|---|---|---|---|---|
| 421-a tax exemption | 4/5 | https://en.wikipedia.org/wiki/421-a_tax_exemption | reference | science, encyclopedia | 2026-05-05T16:00:34.957581+00:00 | kb-cron |
== Current version == As part of the 2017 plan, all housing developments must include between 25% and 30% affordable units to qualify for the program, with several ways for builders to meet that requirement. Previously, that affordability requirement was 20%. However, if the initial tenant of a rent stabilized unit in a building covered by the exemption decides to leave, then the building owner would no longer need to keep that specific unit rent stabilized for new tenants, assuming the rent for that unit is more than $2,700 a month. Under the old 421-a, there was no rent or income limit. Under the program, the exemption lasts for three years of construction and 35 additional years after the project is complete. A full exemption on the tax increase will take place for the first 25 years after the construction period, with the tax benefits in the last ten years being tied to the number of affordable units created. The new 421-a program is also an option for condominium projects. However, condominium projects only qualify for this program if the project has 35 units or less, is not located in Manhattan, and has a per unit assessed value at $65,000 or less. The exemption program excludes luxury condominiums projects after a proposal to include them was defeated in the state legislature. Including them would have raised the program's cost by $1 billion over ten years. In addition, the length of time developers receive incentives was increased from 25 years to 35 years, with the requirement to maintain affordable rents increased to 40 years. Projects that meet the requirements but are outside of the exclusion area can opt into the program. The program will be in place until the year 2022, but could be derailed as soon as the year 2019 based on rent regulation negotiations. The new 421-a program no longer requires developers to include "community preference" as a requirement for being able to qualify for the program. Under the old version, developers were obligated to reserve half of the new residential units for existing residents of the surrounding neighborhood. They also had to set aside smaller percentages of units for municipal workers, military veterans, and residents with disabilities. Following the New York state budget negotiations in April 2017, the 421-a tax exemption program was revived as "Affordable New York". As a condition to reviving the program, developers agreed to pay their workers an average of $60 an hour (benefits included) on all projects south of 96th Street in Manhattan that affect apartment buildings with 300 or more apartments. In addition, developers must pay their workers an average wage of $45 an hour (benefits included) on all projects within a mile of the East River waterfront, also for apartment buildings of 300 apartments or more. This concession was a win for union workers in the city. However, the projects that meet these wage requirements will be rewarded with a full 100% exemption for the full 35 years, providing developers with an additional revenue stream to compensate for the increased labor costs. Outside of the GEA, developers can still opt into the program and receive the enhanced benefits if they meet the program requirements. Developers can be exempt from the wage requirements if they include 50% or more below-market units. The New York City Comptroller will determine if the wage requirements are met. As a result of the passage of the new 421-a program, the state government predicts that the new 421-a program will generate an average of 2,500 affordable housing units to New Yorkers of poor, working-class, and middle class income levels each year. An analysis by the city's Independent Budget Office (IBO) predicted that the program would create roughly 10,000 to 15,800 affordable housing units over ten years at a per unit cost of $568,000. In addition, the agreement made also led the state government to allot an additional $2.5 billion in the state budget in order to create an additional 100,000 affordable housing units and 6,000 supportive housing units. The money was previously held up due to disagreements between Democrats and Republicans in the state government on the usage of those funds.