4.3 KiB
| title | chunk | source | category | tags | date_saved | instance |
|---|---|---|---|---|---|---|
| 421-a tax exemption | 2/5 | https://en.wikipedia.org/wiki/421-a_tax_exemption | reference | science, encyclopedia | 2026-05-05T16:00:34.957581+00:00 | kb-cron |
=== Amendments and affordability provisions === In 1976, the state legislature passed amendments preventing the Department of Housing Preservation and Development (HPD) from rescinding certificates of eligibility for any projects started on or after July 1, 1976. In 1977, the program was extended for an additional four years. Then, in 1978, the requirement that privately owned buildings contain at least six dwelling units was removed. Three years later, non-condominiums under the program were made subject to rent stabilization laws, a change from when non-condominiums were only temporary subjected to those same laws. The 1981 amendments also allowed the HPD to restrict access to the program for areas that did not need the tax incentives or should be used for non-residential purposes. In 1983, certain cities in the state were permitted to limit, restrict, or condition 421-a benefits. In the 1983 revision, the also state rescinded 421-a tax benefits for multi-family dwellings that were converted from non-residential use. In 1984, the state mandated that rents for buildings built after January 1, 1974, be stabilized until May 15, 1985. Also, the state mandated that the New York City Board of Estimate review all local restrictions on 421-a benefits for approval. Additionally, the state passed laws that officially restricted benefits for projects in Manhattan: Areas in Manhattan eligible for the exemption were reduced, and previously non-commercial sites now had to be underutilized for three years prior to construction to become eligible for the 421-a tax exemption program. As a follow-up to earlier legislation, in 1985 the eligibility of projects in the restricted area for 421-a tax benefits was restricted to projects that either received financial help from any level of government or had 20% of their housing units be certified by the HPD to be affordable. The restricted area at that time was in Manhattan, roughly bounded by 14th Street to the south and 96th Street to the north. Outside of the excluded zone area, projects had an "as-of-right" exemption of between ten and fifteen years. In addition, the 1985 legislation allowed for a 25-year exemption period if the project took place in a neighborhood preservation area, was in an area eligible for mortgage insurance made available by the rehabilitation mortgage insurance corporation, or received funding under the Neighborhood Reinvestment Corporation Act. The 421-a program was further extended the same year, and the definition of "construction period" was defined to be three years or less.
=== Geographic Exclusion Area ===
Starting in 2006, the Geographic Exclusion Area (GEA) was expanded to include other parts of New York City outside of Manhattan. The 421-a tax exemption affects the entire city, but the requirement for affordable housing only affects construction projects in the GEA. Generally, these areas are located where housing prices are the most expensive and where affordable housing is most needed. The entire GEA is in New York City. Under the current program, all of Manhattan is part of the GEA. In addition, the Queens and Brooklyn waterfronts are part of the GEA as well, along with parts of northern Staten Island, a small area in central Queens, and a small portion of the Bronx. The GEA boundaries are established by both state and local laws. Under the 2006 version of the program, several rules applied. For the part of the GEA in Manhattan south of 110th Street, the owner had to provide affordable housing in order to get any 421-a tax benefits. For such projects, a ten-year tax exemption could be obtained through building affordable units offsite, via a "negotiable certificate" from the city's Department of Housing Preservation and Development. However, a 20-year tax benefit could only be obtained by building affordable units on-site. In the rest of the GEA, certificates meant a 15-year exemption and on-site affordable units meant a 25-year exemption. Outside of the GEA, negotiable certificates were prohibited. A 15-year exemption was always allowed for any construction project, with a 25-year exemption being permitted if affordable housing units were built in the apartment building.