BILL NUMBER: S8170

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to extending
certain deadlines related to a tax abatement for certain alterations and
improvements to multiple dwellings

 
PURPOSE:

This bill would extend the completion date required for securing abate-
ment of taxation for certain alterations and improvements to multiple
dwellings to June 30, 2030 and gives until June 30, 2026 for local
legislative bodies to adopt this extension through local laws or ordi-
nances.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends clase (c) of subparagraph 10 of paragraph (a) of subdi-
vision 21 of section 489 of the Real Property Tax Law to extend the
project completion date in order to be eligible for the Affordable Hous-
              

ing Rehabilitation Program tax abatement from June 30, 2026 to June 30,
2030.

Section 1 also amends the opening paragraph of paragraph (I)) of subdi-
vision 21 of section 489 of the Real Property Tax Law to set June 30,
2026 as the date by which local legislative bodies may enact the project
complete date extension through local laws or ordinances.

Section 2 sets forth the effective date.

 
JUSTIFICATION:

In 2023, the legislature passed, and the Governor signed into law, a tax
abatement program called the Affordable Housing Rehabilitation Program
to succeed the expired, former J-51 Program to incentivize a variety of
alterations and improvements in multifamily buildings, including the
installation or replacement of heating systems, plumbing, wiring, eleva-
tors, windows and a range of other major capital improvements.

The Affordable Housing Rehabilitation Program was designed as a targeted
program, with a simplified tax-abatement formula, to more effectively
direct benefits to encourage affordability of safe and healthy dwell-
ings.

The program extends tax abatements to rental buildings that meet
prescribed affordable rent levels and tenant income restrictions for
rentals upon vacancy during the restriction period. Other protections
are built-in for tenants of affordable rental units, such as a private
right of action for owner violations of the program requirements. Even
more critically, during the restriction period, the owner of any such
eligible rental building must waive the collection of any rent adjust-
ment granted by the State Division of Housing and Community Renewal
pursuant to rent regulation that is attributable to eligible
construction for which such eligible rental building receives program
benefits.


On December 5, 2024, the New York City Council passed Intro 654-2024 to
adopt this new tax abatement program. It was signed into law as Local
Law 122 of 2024 on December 18, 2024.

This bill seeks to address the limitation that the current law's fast
approaching project completion deadline of June 30, 2026 poses as a
challenge for prospective applicants of the program to conduct qualify-
ing repairs and environmental upgrades in time to secure the tax abate-
ment. Particularly for buildings that need to work towards energy effi-
ciency and decarbonization compliance in accordance with New York City's
Local Law 97, which may involve extensive multisystem upgrades, some
projects would be very difficult to scope, finance, and start and
complete within the 1.5 year window that owners effectively have between
the enactment of Local Law 122 and the program's June 2026 project
completion date.

Extending the project completion date by four years to June 30, 2030 and
giving local legislative bodies until June 30, 2026 to enact local laws
or ordinances to adopt this extension, will enable more property owners
to access the tax incentives offered under the Affordable Housing Reha-
bilitation Program.

 
LEGISLATIVE HISTORY:

This is a new bill.

S4709A Kavanagh / A7758 Braunstein of 2023 (Chapter 536 of 2023) author-
ized the program for construction completed by the current June 30, 2026
deadline.

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect immediately.