Landlords who inappropriately took millions in tax breaks put on notice with new oversight law
/NYC Council passes pair of bills that would increase oversight over buildings benefiting from 421-a tax abatements
NEW YORK, NY — Today, the New York City Council passed a pair of bills that would increase oversight on buildings receiving 421-a tax abatements. Thousands of buildings across the city were found to be out of compliance with the tax abatement program, resulting in landlords receiving tax breaks without adhering to the affordable housing or rent registration requirements.
“Our residents deserve access to affordable and stable housing, especially if the landlords received tax benefits to build those units,” said Council Member Stephen Levin. “It’s unconscionable that landlords are receiving millions in tax breaks to provide community benefits and are instead charging rents that push New Yorkers out of their homes. With the help of this legislation this will come to an end. I’m proud of working together with Council Member Williams to require HPD to audit properties where developers benefit from 421-A tax credits. These audits will determine whether developers have met their obligation to provide affordable or rent-stabilized units, and file timely, accurate qualifying paperwork. Properties found failing will be reported to the NYC Council and Department of Finance for revocation of tax benefits. This legislation will send a strong message — hold up your end of the deal or pay the consequences.”
Sponsored by Council Member Jumaane Williams, Chair of the Housing and Buildings Committee, Int 1366 would require the Department of Housing Preservation and Development(HPD) to audit a certain number of buildings receiving benefits under section 421-a of the real property tax law annually to determine whether such buildings are in compliance with applicable rent registration requirements.
Sponsored by Council Member Levin, Int 1359, would require HPD to audit buildings receiving benefits under the 421-a tax exemption program to ensure that such buildings are complying with the applicable affordability requirements.
The 421-a program, now branded Affordable New York, was renewed in April of this year, and will remain in effect until at least 2022. Through the program, developers of certain market-rate buildings are granted a full tax exemption for 35 years in exchange for the creation of certain affordability components. The program provides over 1.4 billion in yearly property tax subsidies to New York City building owners. In exchange for the tax breaks, developers are required to create and maintain a number of affordable units. In addition, the buildings are required to register rents with the Department of Housing and Development.
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