S T A T E O F N E W Y O R K
________________________________________________________________________
5438
2011-2012 Regular Sessions
I N S E N A T E
May 20, 2011
___________
Introduced by Sens. YOUNG, LANZA -- read twice and ordered printed, and
when printed to be committed to the Committee on Housing, Construction
and Community Development
AN ACT to amend the real property tax law, in relation to tax exemption
for new multiple dwellings
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The opening paragraph of item (A) of subparagraph (iv) of
paragraph (a) of subdivision 2 of section 421-a of the real property tax
law, as amended by chapter 618 of the laws of 2007, is amended to read
as follows:
Unless excluded by local law, in the city of New York, the benefits of
this subparagraph shall be available in the borough of Manhattan for new
multiple dwellings on tax lots now existing or hereafter created south
of or adjacent to either side of one hundred tenth street [which] THAT
commence construction after July first, nineteen hundred ninety-two and
before December twenty-eighth, two thousand [ten] FOURTEEN only if:
S 2. Subparagraph (ii) of paragraph (c) of subdivision 2 of section
421-a of the real property tax law, as amended by chapter 618 of the
laws of 2007, is amended to read as follows:
(ii) construction is commenced after January first, nineteen hundred
seventy-five and before December twenty-eighth, two thousand [ten] FOUR-
TEEN provided, however, that such commencement period shall not apply to
multiple dwellings eligible for benefits under subparagraph (iv) of
paragraph (a) of this subdivision;
S 3. Paragraph (d) of subdivision 2 of section 421-a of the real prop-
erty tax law, as amended by chapter 692 of the laws of 1995, is amended
to read as follows:
(d) [As of July first, nineteen hundred seventy-five] FOR ANY BUILDING
GRANTED TAX EXEMPTION PURSUANT TO THIS SECTION BY THE LOCAL HOUSING
AGENCY ON OR SUBSEQUENT TO JULY FIRST, NINETEEN HUNDRED SEVENTY-ONE, if
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11709-01-1
S. 5438 2
the aggregate floor area of commercial, community facility and accessory
use space exceeds twelve [per cent] PERCENT of the aggregate floor area,
as defined herein, [of any building granted tax exemption pursuant to
this section on or subsequent to July first, nineteen hundred seventy-
one] OF SUCH BUILDING, tax exemption shall be reduced by an amount equal
to the [per cent] PERCENT of the aggregate floor area by which the
aggregate floor area of commercial, community facility and accessory use
space exceeds twelve [per cent] PERCENT of the aggregate floor area of
the building provided, however, that accessory use space shall not
include accessory parking located not more than twenty-three feet above
the curb level and provided, further, that whenever a building contain-
ing two or more separately assessed parcels of real property has commer-
cial, community facility and accessory use space in excess of such
twelve percent, the tax arising out of the reduction in exemption for
such excess space shall not be apportioned pro rata among all of the
separately assessed parcels in the building but shall be applied first
to those separately assessed parcels which are unrelated to the residen-
tial use of the building; and only after such unrelated parcels are
fully taxable shall the remainder of such tax be apportioned pro rata
among the remaining separately assessed parcels and provided further,
that no such exemption for commercial, community facility and accessory
use space shall be applicable prior to July first, nineteen hundred
seventy-five. To be eligible for exemption under this section such
construction shall take place on land which, thirty-six months prior to
the commencement of such construction, was vacant, predominantly vacant,
under-utilized, or improved with a non-conforming use, provided that if
such new multiple dwelling displaces or replaces a building or buildings
containing more than twenty-five occupied dwelling units in existence on
December thirty-first, nineteen hundred seventy-four and administered
under the local emergency housing rent control act, the rent stabiliza-
tion law of nineteen hundred sixty-nine, or the emergency tenant
protection act of nineteen seventy-four, such new multiple dwelling
shall not be eligible in the city of New York unless a certificate of
eviction has been issued for any of the displaced or replaced units
pursuant to the powers granted by the city rent and rehabilitation law,
and that the sale, transfer or utilization of air rights over residen-
tial buildings that were not demolished shall not be construed as a
displacement or replacement of the dwelling units contained within those
buildings within the meaning of this subdivision.
S 4. Subdivision 3 of section 421-a of the real property tax law, as
amended by chapter 857 of the laws of 1975, the opening paragraph as
amended by chapter 655 of the laws of 1978, paragraph (iv) as amended by
chapter 703 of the laws of 1976, and such section as renumbered by chap-
ter 110 of the laws of 1977, is amended to read as follows:
3. Application forms for exemption under this section shall be filed
with the [assessors between February first and March fifteenth and,
based on the certification of the local housing agency as herein
provided, the assessors shall certify to the collecting officer the
amount of taxes to be abated] LOCAL HOUSING AGENCY, WHICH SHALL ISSUE A
CERTIFICATE CERTIFYING THE APPLICANT'S ELIGIBILITY PURSUANT TO SUBDIVI-
SIONS TWO AND FOUR OF THIS SECTION. If there be in a city of one
million population or more a department of housing preservation and
development, the term "housing agency" shall mean only such department
of housing preservation and development. [No such application shall be
accepted by the assessors unless accompanied by a certificate of the
local housing agency certifying the applicant's eligibility pursuant to
S. 5438 3
subdivisions two and four of this section.] No such certification of
eligibility shall be issued by the local housing agency until such agen-
cy determines the initial adjusted monthly rent to be paid by tenants
residing in rental dwelling units contained within the multiple dwelling
and the comparative adjusted monthly rent that would have to be paid by
such tenants if no tax exemption were applicable as provided by this
section. The initial adjusted monthly rent will be certified by the
local housing agency as the first rent for the subject dwelling units. A
copy of such certification with respect to such units shall be attached
by the applicant to the first effective lease or occupancy agreement.
The initial adjusted monthly rent shall reflect the full tax exemption
benefits as approved by the agency.
The agency shall determine the amount of the initial adjusted monthly
rent as follows:
(i) The total project cost shall be determined by adding the following
items:
(a) Land acquisition cost or purchase price, if purchased within two
years prior to the date on which construction or alteration is
commenced; or land acquisition cost or purchase price or an appraisal
prepared by a qualified independent appraiser, in such form as is
acceptable to the agency, if purchased more than two years prior to such
date. Land acquisition cost or purchase price, where used, shall be
certified to by an independent certified public accountant;
(b) Costs incurred in the process of preparing the site for
construction, including but not limited to operating losses, relocation
expenses, demolition expenses and carrying charges, such costs to be
certified by an independent certified public accountant to a date not
more than ninety days prior to the filing of an application for certif-
ication of eligibility and the balance of such costs to be estimated;
(c) Construction costs for constructing or rehabilitating the multiple
dwelling as determined by the agency in accordance with subdivision four
of this section, plus such amount, if any, representing unique and
special costs as may be allowed by the agency for a particular multiple
dwelling;
(d) An allowance for estimated off-site costs, including but not
limited to architects, engineers and legal fees, interest and taxes
during construction, insurance, title and mortgage fees, as determined
by the agency in accordance with subdivision four of this section, and
(e) such other amounts as are ordinarily and customarily incurred in
connection with the construction or rehabilitation of a multiple dwell-
ing, as determined by the agency in accordance with subdivision four of
this section.
(ii) The total expenses of the multiple dwelling shall be determined
by adding the following items:
(a) The amount that the agency determines to be the reasonable annual
costs for the continuing maintenance and operation of the multiple
dwelling in accordance with subdivision four of this section;
(b) The amount that the agency determines to be an appropriate annual
provision for vacancies, contingency reserves and management fees in
accordance with subdivision four of this section.
(c) The projected real property taxes to be levied on the multiple
dwelling and the land on which it is situated at the time of estimated
initial occupancy;
(d) Fourteen (14) [per cent] PERCENT of the total project cost, as
hereinabove defined, which amount will include all expenses for debt
service; and
S. 5438 4
(e) Deducting from said total the estimated annual income to be
derived from any commercial, community facility or accessory use space
in the building.
(iii) The total expenses shall be divided by the room count to provide
the adjusted monthly rent per room per month.
(iv) The adjusted monthly rent per room per month shall be multiplied
by the room count of each rental dwelling unit to provide the initial
adjusted monthly rent for such dwelling unit. The agency may allow
adjustments in the initial adjusted monthly rent for any particular
dwelling units provided that the total of the initial adjusted monthly
rents for all of the rental dwelling units in a multiple dwelling shall
not exceed the total expenses of such multiple dwelling.
The agency shall determine the estimated comparative adjusted monthly
rent that would have to be paid if no tax exemption were applicable as
provided by this section by adding to the adjusted monthly rent for each
dwelling unit as hereinabove computed an amount equal to (a) the differ-
ence between the projected real property taxes which would be levied on
the multiple dwelling and the land on which it is situated at the time
estimated initial occupancy if no tax abatement were applicable as
provided by this section and the projected real property taxes hereina-
bove utilized in connection with the computation of total expenses; (b)
divided by the room count of the building as per this section; and (c)
multiplied by the applicants approved room count of each such dwelling
unit.
The local housing agency may promulgate rules and regulations to carry
out the provisions of this section, not inconsistent with the provisions
hereof, [and may require a reasonable filing fee in an amount provided
by such rules and regulations] INCLUDING, BUT NOT LIMITED TO, RULES AND
REGULATIONS RELATING TO THE FILING FEE AUTHORIZED PURSUANT TO PARAGRAPH
B OF SUBDIVISION FOUR OF THIS SECTION. NOTWITHSTANDING THE PROVISIONS OF
ANY GENERAL, SPECIAL OR LOCAL LAW, THE LOCAL HOUSING AGENCY IN A CITY OF
ONE MILLION OR MORE MAY REQUIRE THAT APPLICATIONS FOR EXEMPTION UNDER
THIS SECTION THAT ARE FILED ON OR AFTER THE EFFECTIVE DATE OF THIS ACT
BE FILED ELECTRONICALLY.
S 5. Paragraph b of subdivision 4 of section 421-a of the real proper-
ty tax law, as added by chapter 744 of the laws of 2004, is amended to
read as follows:
b. The local housing agency [may] SHALL require a filing fee not to
exceed the greater of (i) four-tenths of one percent of the total
project cost, or (ii) if the building will be owned as a cooperative or
condominium, four-tenths of one percent of the total project cost or
four-tenths of one percent of the total project sell-out price stated in
the last amendment to the offering plan accepted for filing by the
attorney general of the state, at the option of the applicant. Such
total project cost or total project sell-out price shall be determined
pursuant to rules promulgated by the local housing agency. Notwithstand-
ing the foregoing, the local housing agency may promulgate rules impos-
ing an additional fee if an application, or any part thereof, or
submission in connection therewith, is defective and such defect delays
the processing of such application or causes the local housing agency to
expend additional resources in the processing of such application.
S 6. Subparagraph (i) of paragraph (a) of subdivision 6 of section
421-a of the real property tax law, as added by chapter 110 of the laws
of 2005, is amended to read as follows:
(i) "Covered project." (A) A new building located within the Green-
point - Williamsburg waterfront exclusion area, (B) two or more build-
S. 5438 5
ings which are part of one contiguous development entirely located with-
in the Greenpoint - Williamsburg waterfront exclusion area, (C) two or
more buildings which are located within the Greenpoint - Williamsburg
waterfront exclusion area and are part of a single development parcel
specifically identified in section [62-831] 62-931 of the local zoning
resolution, or (D) where so authorized in writing by the local housing
agency, one or more buildings located within the Greenpoint - Williams-
burg waterfront exclusion area and one or more buildings located outside
the Greenpoint - Williamsburg waterfront exclusion area but within
Community District Number One in the borough of Brooklyn. The cumulative
number of affordable units located outside the Greenpoint - Williamsburg
waterfront exclusion area in all covered projects described in clause
(D) of this subparagraph shall not exceed two hundred. A building
located outside the Greenpoint - Williamsburg waterfront exclusion area
which is part of a covered project described in clause (D) of this
subparagraph shall not contain any affordable units with respect to
which an application pending before a governmental entity on the effec-
tive date of this subdivision or a written agreement in effect on the
effective date of this subdivision provided for the development of such
affordable units.
S 7. This act shall take effect immediately, provided, however, that
the amendments to item (A) of subparagraph (iv) of paragraph (a) of
subdivision 2 and subparagraph (ii) of paragraph (c) of subdivision 2 of
section 421-a of the real property tax law made by sections one and two
of this act shall be deemed to have been in full force and effect as of
December 28, 2010.
