421-a tax exemption
Property tax exemption in the U.S. state of New York / From Wikipedia, the free encyclopedia
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The 421-a tax exemption is a property tax exemption in the U.S. state of New York that is given to real-estate developers for building new multifamily residential housing buildings in New York City. As currently written, the program also focuses on promoting affordable housing in the most densely populated areas of New York City. The exemption is granted for any buildings that add multiple new residential units, and typically lasts for 15 to 25 years after the building is completed. Longer exemption periods apply in less densely populated areas of the outer boroughs and upper Manhattan.
The original program gets its name from section 421-a in the New York Real Property Tax Law. The 421-a program began in 1971, and the state government later added provisions to mandate the creation of affordable housing units in order for developers to qualify for the program. Under the original program, areas in which developers qualified for the tax break included all of Manhattan and portions of the rest of New York City.
The original program lapsed in January 2016 after disagreements between the state government and the New York City government, but a deal was struck in November 2016 among unions, developers, and Governor Andrew Cuomo to bring it back, pending the approval of the New York State Legislature. After the April 2017 budget negotiations, the program was officially renewed, with the official new program name being "Affordable New York". The program is administered by the New York City Department of Housing Preservation and Development. Under the program, much of the stabilization benefit going to market renters goes away as does the older versions 50% community preference, making this program controversial. Tenant rights were expanded under the Housing Stability and Tenant Protection Act of 2019, leading housing advocates to call for the repeal of 421-a.
Real Estate Board of New York (REBNY) President James Whelan in January 2022 "indicated support for Gov. Kathy Hochul's proposed Affordable Neighborhoods for New Yorkers program, a rebrand of the expiring 421-a tax break."[1]