Revives and extends the expiration of provisions authorizing the city of New York to exempt certain new multiple dwellings from real property taxation

1 Co-sponsor

• Andrew J. Lanza

BILL NUMBER:S5247

Title of bill

An act to amend local law number 58 of the city of New York for the year 2006, amending the New York city charter and the administrative code of the city of New York relating to the establishment of an affordable housing fund and benefits, in relation to extending the expiration of exemption of new multiple dwellings from real property taxation

Purpose

To continue and make retroactive the extension of changes to the 421-a program made by the New York City Council to the Real Property Tax Law 421-a program in New York City.

Summary of provisions

Section one of this bill amends sections one through eight of Local Law number 58 of the City of New York of 2006 to continue changes made to the 421-a program in 2006.

Section two provides a retroactive effective date to December 28, 2010.

Justification

Section 421-a of the Real Property Tax law has provided tax benefits for the construction of new residential buildings in the City of New York since 1971 and are available for up to 25 years depending on the location of the multiple dwelling. It provides a period of full exemption followed by a phase out of the exemption to full taxation. The continuing shortage of affordable housing in the city of New York necessitates the extension of this essential tax exemption program, which provides an incentive for the development of affordable units both in Manhattan and in the outer boroughs. The proposed legislation would ensure that the 421-a program continues to fulfill this mission.

Local Law No. 58 of 2006, which became effective on December 28, 2007, expanded the Geographic Exclusion Area, required on-site affordable housing, created an Affordable Housing Trust Fund, eliminated 3-unit buildings unless constructed with substantial government assistance and otherwise maintained eligibility for 4 and 5 unit buildings in the 421-a tax incentive program, and required that housing development in areas covered by the Neighborhood Preservation Program (NPP) and those areas eligible for mortgage insurance from Real Estate Mortgage Insurance Corporation (REMIC) only receive the extended tax benefit if on site affordable housing was included. After the council enacted Local Law No. 58 of 2006, the State Legislature enacted further reforms to the 421-a program through chapters 618, 619, and 620 of 2007. Further reforms were adopted when the Governor signed Chapter 15 of 2008. On June 1, 2010 the Mayor signed Local Law No. 58 of 2006. Finally the State Legislature enacted the Rent Act of 2011 and Chapter 4 of 2013, both of which amended the 421-a provisions contained in both local and state law. The subsequent legislative activity since Local Law No. 58 of 2006 assumed the continued effectiveness of the provisions contained

therein. The proposed law corrects the unintended sunset of these provisions by retroactively reinstating them as of December 28, 2010. Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.

Legislative history

New Bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately.