Last-Minute Albany Deal Revives Key Affordable Housing Tax Abatement Replacement
New York’s legislature failed to pass most housing-related policies on its plate, but one new bill aimed at encouraging apartment renovations made it across the line.
The expired J-51 tax break will now be revived in the form of a replacement called the Affordable Housing Rehabilitation Program, The Real Deal reports. The J-51 program, which expired last July, allowed a tax exemption of as many 34 years for major revamps to apartment buildings.
This new program will run for up to 20 years and would only apply to rental buildings if they are 50% affordable, receive “substantial” government assistance or fall within the Mitchell-Lama program, TRD reported.
Up to 70% of reasonable renovation work would apply to the break, which would be granted to landlords found to not have harassed tenants in the last five years. It would also require landlords to keep the units stabilized for a minimum of 15 years and apply restrictions to keeping units off the market. Ultimately, the city council puts the program in place, and if it does so, the break would apply to renovations done between June 29, 2022, and June 30, 2026.
Gov. Kathy Hochul introduced a package of proposals aimed at ramping up housing production across the state to the legislature this session, but almost none were agreed upon. The session ended last week, with New York Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie issuing a statement blaming Hochul for the inaction, saying the legislature had reached an agreement on "historic rent protections as well as a massive and transformational housing program” but that Hochul wouldn't agree to sign it. Hochul fired back, saying it was the legislature that had failed to act.
Housing advocates and real estate players alike have despaired at the fact that so little went through, with an extension to 421-a, good cause eviction and rules that would ease the conversion of commercial buildings to housing all left by the wayside.
Meanwhile, rent hit another all-time high in Manhattan and Brooklyn in May, rising 10% from a year ago, a situation the real estate community says will only get worse if the government doesn’t help more affordable housing get built.
