What's happening
This bill amends the real property tax law to restrict certain low-income housing tax exemptions in New York City to non-profits not established or controlled by for-profit entities.
Why it matters
Closes a loophole that previously allowed for-profit developers to create or control non-profit entities in order to access valuable property tax exemptions meant for low-income housing projects. this aims to ensure that the tax benefit truly supports non-profit, mission-driven affordable housing efforts rather than serving as a backdoor subsidy for profit-driven companies.
Raises the minimum controlling interest in eligible entities from 50% to 51% for charitable organizations. , making it slightly harder for for-profit actors to retain significant control through minority partnerships, thereby strengthening non-profit oversight and accountability.
Explicitly defines that only non-profits "not established or controlled by a for-profit entity" qualify for exemptions. , providing clearer guidance for tax assessors and housing agencies and reducing ambiguity that could be exploited in structuring deals.
Applies prospectively to new projects only. , meaning existing arrangements are not disturbed, but any future low-income housing projects seeking these tax breaks in New York City must comply with the stricter non-profit requirements—potentially shifting the landscape of affordable housing development and who participates in it.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
End Taxes on Low-Income Housing
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to cities
- Referred to cities
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tax Break for Low-Income Housing
In Assembly Committee · Real Property Taxation · Sponsor Rodneyse Bichotte Hermelyn
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1420
2017-2018 Regular Sessions
IN SENATE
January 9, 2017
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Cities
AN ACT to amend the real property tax law, in relation to exemptions from local real property taxation of certain low income housing accommodations in a city with a population of one million or more
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 420-c of the real property tax law, as amended by chapter 104 of the laws of 1999, is amended to read as follows:
1. In a city having a population of one million or more, real property owned by a corporation, partnership or limited liability company formed for the purpose of providing housing accommodations for persons and families of low income as defined in section two of the private housing finance law and used for such purpose, shall be exempt from local real property taxation, provided that such corporation, partnership or limited liability company: (a) is organized as a non-profit housing development fund company pursuant to article eleven of the private housing finance law and is not established or controlled by a for-profit entity, or is a non-profit housing corporation as defined in article eleven of the private housing finance law which is not incorporated as a housing development fund company as defined in article eleven of the private housing finance law and is not established or controlled by a for-profit entity, or is a wholly-owned subsidiary of such a company or is a partnership or limited liability company the controlling interest of which is held by such a company or corporation or by a wholly owned subsidiary of such a company or by a corporation sponsored or formed by such a company or corporation; and (b) has received a loan from a municipality, the state or the housing trust fund corporation established pursuant to section forty-five-a of the private housing finance law or any successor corporation; and (c) enters into a regulatory agreement with the munici-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01265-01-7
S. 1420 2
pality, the state or the housing trust fund corporation established pursuant to section forty-five-a of the private housing finance law or any successor corporation guaranteeing the provision of housing accommodations for persons and families of low income; and (d) is a participant in the federal low income housing tax credit program established pursuant to section forty-two of the internal revenue code of nineteen hundred eighty-six, as amended. Any exemption pursuant to this section shall expire upon the expiration or termination of the regulatory agreement.
§ 2. Subparagraphs 4 and 5 of paragraph (a) of subdivision 4 of section 420-c of the real property tax law, subparagraph 4 as added by chapter 522 of the laws of 2004 and subparagraph 5 as amended by chapter 526 of the laws of 2004, are amended to read as follows:
(4) The term "charitable organization" shall mean (i) an entity, not established or controlled by a for-profit entity, formed for purposes that include providing housing accommodations for persons and families of low income and that has received written recognition of exemption pursuant to section 501(c)(3) or section 501(c)(4) of the internal revenue code of nineteen hundred eighty-six, as amended, or any successor statute, from the United States Internal Revenue Service, or any successor agency, or (ii) a corporation, partnership or limited liability company wholly owned and wholly controlled by an entity, not established or controlled by a for-profit entity, formed for purposes that include providing housing accommodations for persons and families of low income and that has received written recognition of exemption pursuant to section 501(c)(3) or section 501(c)(4) of the internal revenue code of nineteen hundred eighty-six, as amended, or any successor statute, from the United States Internal Revenue Service, or any successor agency.
(5) The term "eligible entity" shall mean a corporation, partnership or limited liability company at least [fifty] fifty-one percent of the controlling interest of which is held by a charitable organization.
§ 3. This act shall take effect immediately and shall apply to all projects approved on or after the date on which this act shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to exemptions from local real property taxation of certain low income housing accommodations in a city with a population of one million or more
Purpose or general idea of bill
This bill amends the New York State Real Property Tax Law section 420-c to (1) allow tax exemptions for only those entities where the non-profit has 51% control, instead of 50% control as is written in current law and (2) limit the entities eligible for real property tax exemption to exclude those that are established by a for-profit entity or are a subsidiary of a for-profit corporation, partnerships or limited liability company.
Justification
The current real property tax law specifies four criteria for tax the real property tax exemption: (1) the entity must be organized to provide housing to low-income people, and hold a 501c(3) or 501c(4) exemption; (2) the project must receive Low-Income Housing Tax- Credits; (3) the project must have a regulatory agreement with a government entity, and the agreement must indicate that at least 70% of the units are restricted to 60% AMI or lower, and (4) the project must have taken out a loan from a government entity.
Under the current statute, for-profit developers are able to set up non-profits that are owned and controlled by the for-profit for the purpose of qualifying for the 420-c benefit. Further, under existing law, a non-profit must only have 50% of control of an entity in order to qualify for the abatement, often leaving the non-profit with no over- sight control of the Joint Venture Agreements.
The property tax abatement, when limited only to non-profit development corporations, allows for Community Development Corporations to submit more competitive bids and lower operating costs, providing greater benefits to the community. When limited only to non-profit developers, CDC's are better able to compete, greatly improving the overall quality of low-income housing in the city.
Prior legislative history
A10660 of 2012 - In Real Property Tax EFFECTIVE DATE : Immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.