Extends from June 15, 2015 until June 15, 2018, the date by which construction or rehabilitation must commence for eligibility for the tax exemption for new or substantially rehabilitated multiple dwellings

BILL NUMBER:S2314 REVISED MEMO 01/29/2015

Title of bill

An act to amend the real property tax law, in relation to extending eligibility, for an additional three years, for the exemption of certain new or substantially rehabilitated multiple dwellings from local taxation

Purpose

To continue the real property tax law 421-m exemption program for an additional three year period.

Summary of provisions

Section one of this bill amends paragraph (b) of subdivision 3 of section 421-m of the real property tax law

Section two provides an immediate effective date.

Justification

Section 421-m of the Real Property Tax law is a new program which was established by Chapter 47 of the laws of 2011. It authorizes most municipalities outside of New York City, at local option, to enact a local law to offer a real property tax incentive to encourage the development of affordable housing and the remediation of blighted or underutilized areas within a city, town or village.

Under 421-m, the municipality may designate a development area in which multiple dwellings and mixed use development consisting of 50% or more residential floor space, will be eligible for the program if they contain a minimum of 20% affordable housing and have been constructed on formerly blighted, unsanitary, vacant, or underutilized property. In order to ensure continued eligibility for the exemption, tenants may not pay more than 30% of their income in rent.

The program provides a unique opportunity for localities to encourage development, especially in dilapidated downtown areas which require incentive development to bring residents back to main street areas to help revitalize them. The program is schedule to end on June 15, 2015 and in order to take advantage of the program, a municipality must enact a local law and construction on any eligible project must begin by that date.

Unfortunately, 421-m has not yet been utilized by a locality. Part of the reason for this is that the New York State Division of Housing has only recently developed the draft regulations which are necessary for a municipality to develop an income certification and monitoring plan as directed by the statute. Extension of the program for another three years will afford more time for municipal governments to institute the necessary planning and development strategies, to pass a local law implementing the program, and to have their certification and income monitoring plans approved by the New York State Division of Housing.

Legislative history

2013, 2014: S.5318 Passed the Senate

Fiscal implications

None.

Effective date

This act shall take effect immediately.