§ 11-243.2 Tax abatement for alterations and improvements to certain multiple dwellings.
AC § 11-243.2
a. Definitions. As used in this section, the following terms have the following meanings: Area median income. The term “area median income” means the income limits as defined annually by the United States department of housing and urban development for the New York city area. Certificate of eligibility and reasonable cost. The term “certificate of eligibility and reasonable cost” means a document issued by the department of housing preservation and development that establishes that a property is eligible for rehabilitation program benefits and sets forth the certified reasonable cost of the eligible construction for which such benefits shall be received. Certified reasonable cost schedule. The term “certified reasonable cost schedule” means a table providing maximum dollar limits for specified alterations and improvements, established, and updated regularly as necessary, by the department of housing preservation and development. Checklist. The term “checklist” means a document that the department of housing preservation and development issues requesting additional information or documentation that is necessary for further assessment of an application for a certificate of eligibility and reasonable cost where such application contained all information and documentation required at the initial filing. Commencement date. The term “commencement date” means, with respect to eligible construction, the date on which any physical operation undertaken for the purpose of performing such eligible construction lawfully begins. Completion date. The term “completion date” means, with respect to eligible construction, the date on which: 1. Every physical operation undertaken for the purpose of all eligible construction has concluded; and 2. All such eligible construction has been completed to a reasonable and customary standard that renders such eligible construction capable of use for the purpose for which such eligible construction was intended. Dwelling unit. The term “dwelling unit” means any residential accommodation in a class A multiple dwelling that: 1. Is arranged, designed, used, or intended for use by 1 or more persons living together and maintaining a common household; 2. Contains at least 1 room; and 3. Contains within such accommodation lawful sanitary and kitchen facilities reserved for its occupants. Dwelling unit floor area. The term “dwelling unit floor area” means the gross square footage within the dwelling unit measured from the interior faces of the demising partitions or party walls. Eligible building. The term “eligible building” means an eligible rental building, an eligible homeownership building, or an eligible regulated homeownership building, provided that such building contains 3 or more dwelling units. Eligible construction. The term “eligible construction” means alterations or improvements to an eligible building that: 1. Are specifically identified on the certified reasonable cost schedule; 2. Meet the minimum scope of work threshold; 3. Have a completion date that is after June 29, 2022 and prior to June 30, 2026 and that is not more than 30 months after the commencement date; and 4. Are not attributable to any increased cubic content in such eligible building. Eligible homeownership building. The term “eligible homeownership building” means an existing building that: 1. Is a class A multiple dwelling operated as condominium or cooperative housing; 2. Is not operating in whole or in part as a hotel; and 3. Has an average assessed valuation, including the valuation of the land, that as of the commencement date does not exceed the homeownership average assessed valuation limitation. Eligible regulated homeownership building. The term “eligible regulated homeownership building” means an existing building that is a class A multiple dwelling owned and operated by either: 1. A mutual company that continues to be organized and operated as a mutual company and that has entered into and recorded a mutual company regulatory agreement; or 2. A mutual redevelopment company that continues to be organized and operated as a mutual redevelopment company and that has entered into and recorded a mutual redevelopment company regulatory agreement. Eligible rental building. The term “eligible rental building” means an existing building that: 1. Is a class A multiple dwelling in which all of the dwelling units are operated as rental housing; 2. Is not operating in whole or in part as a hotel; and 3. Satisfies 1 of the following conditions: (a) Not less than 50 percent of the dwelling units in such building are qualifying rental units; (b) Such building is owned and operated by a limited-profit housing company; or (c) Such building is the recipient of substantial governmental assistance. Existing building. The term “existing building” means an enclosed structure which: 1. Is permanently affixed to the land; 2. Has 1 or more floors and a roof; 3. Is bounded by walls; 4. Has at least 1 principal entrance utilized for day-to-day pedestrian ingress and egress; 5. Has a certificate of occupancy or equivalent document that is in effect prior to the commencement date; and 6. Exclusive of the land, has an assessed valuation of more than $1,000 for the fiscal year immediately preceding the commencement date. Homeownership average assessed valuation limitation. The term “homeownership average assessed valuation limitation” means an average assessed valuation of $45,000 per dwelling unit. Limited-profit housing company. The term “limited-profit housing company” has the same meaning as “company” set forth in section 12 of the private housing finance law. Market rental unit. The term “market rental unit” means a dwelling unit in an eligible rental building other than a qualifying rental unit. Marketing band. The term “marketing band” means maximum rent amounts ranging from 20 percent of 80 percent of the area median income, adjusted for family size, to 30 percent of 80 percent of the area median income, adjusted for family size. Minimum scope of work threshold. The term “minimum scope of work threshold” means a total amount of certified reasonable cost established by rules and regulations of the department of housing preservation and development, provided that such amount shall be no less than $1,500 for each dwelling unit in existence on the completion date. Multiple dwelling. The term “multiple dwelling” has the same meaning as set forth in section 4 of the multiple dwelling law. Mutual company. The term “mutual company” has the same meaning as set forth in section 12 of the private housing finance law. Mutual company regulatory agreement. The term “mutual company regulatory agreement” means a binding and irrevocable agreement between a mutual company and the commissioner of housing of the state of New York, the mutual company supervising agency, the New York city housing development corporation, or the New York state housing finance agency, prohibiting the dissolution or reconstitution of such mutual company pursuant to section 35 of the private housing finance law for not less than 15 years from the commencement of rehabilitation program benefits for the existing building owned and operated by such mutual company. Mutual company supervising agency. The term “mutual company supervising agency” has the same meaning, with respect to any mutual company, as “supervising agency” set forth in section 2 of the private housing finance law. Mutual redevelopment company. The term “mutual redevelopment company” has the same meaning as “mutual” when applied to a redevelopment company as set forth in section 102 of the private housing finance law. Mutual redevelopment company regulatory agreement. The term “mutual redevelopment company regulatory agreement” means a binding and irrevocable agreement between a mutual redevelopment company and the commissioner of housing of the state of New York, the redevelopment company supervising agency, the New York city housing development corporation, or the New York state housing finance agency prohibiting the dissolution or reconstitution of such mutual redevelopment company pursuant to section 123 of the private housing finance law until the earlier of: (i) 15 years from the commencement of rehabilitation program benefits for the existing building owned and operated by such mutual redevelopment company; or (ii) the expiration of any tax exemption granted to such mutual redevelopment company pursuant to section 125 of the private housing finance law. Qualifying rent. The term “qualifying rent” means the maximum rent within the marketing band that is allowed for a qualifying rental unit as such rent is established by the department of housing preservation and development. Qualifying rental unit. The term “qualifying rental unit” means a dwelling unit in an eligible rental building that, as of the filing of an application for a certificate of eligibility and reasonable cost, has a rent at or below the qualifying rent. Redevelopment company. The term “redevelopment company” has the same meaning as set forth in section 102 of the private housing finance law. Redevelopment company supervising agency. The term “redevelopment company supervising agency” has the same meaning, with respect to any redevelopment company, as “supervising agency” set forth in section 102 of the private housing finance law. Rehabilitation program benefits. The term “rehabilitation program benefits” means the abatement of real property taxes pursuant to this section. Rent regulation. The term “rent regulation” means, collectively, the emergency housing rent control law, any local law enacted pursuant to the local emergency housing rent control act, the rent stabilization law of 1969, the rent stabilization code, and the emergency tenant protection act of 1974, all as in effect as of October 23, 2023, or as any such statute is amended thereafter, together with any successor statutes or regulations addressing substantially the same subject matter. Restriction period. The term “restriction period” means, notwithstanding any termination or revocation of rehabilitation program benefits prior to such period, 15 years from the initial receipt of rehabilitation program benefits, or such additional period of time as may be imposed pursuant to paragraph 7 of subdivision d of this section. Substantial government assistance. The term “substantial governmental assistance” means grants, loans, or subsidies from any federal, state, or local governmental agency or instrumentality in furtherance of a program for the development of affordable housing approved by the department of housing preservation and development, provided that such grants, loans, or subsidies are provided in accordance with a regulatory agreement entered into with such agency or instrumentality that is in effect for no less than 15 more years as of the filing date of the application for a certificate of eligibility and reasonable cost. Substantial interest. The term “substantial interest” means an ownership interest of 10 percent or more. b. Abatement. Notwithstanding the provisions of section 11-243 or of any general, special, or local law to the contrary, real property taxes on an eligible building in which eligible construction has been completed may be abated by an aggregate amount that shall not exceed 70 percent of the total certified reasonable cost of such eligible construction, as determined under rules and regulations of the department of housing preservation and development, provided that: 1. Such abatement shall not be effective for a period of more than 20 years; 2. The annual abatement of real property taxes on such eligible building shall not be greater than eight and one-third percent of the total certified reasonable cost of such eligible construction; 3. The annual abatement of real property taxes on such eligible building in any consecutive 12 month period shall in no event exceed the amount of real property taxes payable in such 12 month period for such building, provided, however, that such abatement shall not exceed 50 percent of the amount of real property taxes payable in such 12 month period for any of the following: (a) An eligible rental building owned by a limited-profit housing company or a redevelopment company; (b) An eligible homeownership building; or (c) An eligible regulated homeownership building; 4. Such abatement shall become effective beginning with the first quarterly tax bill immediately following the date of issuance of the certificate of eligibility and reasonable cost; 5. Such abatement shall not be applied to abate or reduce the taxes upon the land portion of real property, which shall continue to be taxed based upon the assessed valuation of the land and the applicable tax rate at the time such taxes are levied; 6. Such abatement shall not be allowed for any eligible building receiving a tax exemption or abatement concurrently for rehabilitation or new construction under any other provision of state or local law with the exception of any eligible construction to an eligible building receiving a tax exemption or abatement under the provisions of the private housing finance law; 7. Such abatement shall not be allowed for any item of eligible construction in an eligible building if such eligible building is receiving a tax exemption or abatement for the same or a similar item of eligible construction as of the last December 31 preceding the date of application for a certificate of eligibility and reasonable cost for such abatement; and 8. Where the eligible construction includes or benefits a portion of an eligible building that is not occupied for dwelling purposes, the assessed valuation of such eligible building and the cost of the eligible construction shall be apportioned so that such abatement shall not be provided for eligible construction made for other than dwelling purposes. c. Application.
1.An application for a certificate of eligibility and reasonable cost shall be made after the completion date and no later than on or before the later of: (a) Four months from the effective date of this local law; or (b) Four months from such completion date.
2.Such application shall include evidence of eligibility for rehabilitation program benefits and evidence of reasonable cost as shall be satisfactory to the department of housing preservation and development including, but not limited to, evidence showing the cost of eligible construction.
3.The department of housing preservation and development shall require a non-refundable filing fee that shall be paid by a certified check or cashier’s check upon the filing of an application for a certificate of eligibility and reasonable cost. Such fee shall be $1,000, plus $75 for each dwelling unit in excess of 6 dwelling units in the eligible building that is the subject of such application.
4.Any application that is filed pursuant to this subdivision that is missing any of the information and documentation required at initial filing by this section and the rules and regulations of the department of housing preservation and development promulgated pursuant to this section shall be denied, provided that a new application for the same eligible construction, together with a new non-refundable filing fee, may be filed within 15 days of the date of issuance of such denial. If such second application is also missing any such required information and documentation, it shall be denied and no further applications for the same eligible construction shall be permitted.
5.The failure of an applicant to respond to any checklist within 30 days of the date of its issuance by the department of housing preservation and development shall result in denial of the application for which such checklist was issued, and no further applications for the same eligible construction shall be permitted. The department of housing preservation and development shall issue not more than 3 checklists per application. An application for a certificate of eligibility and reasonable cost shall be denied when the department of housing preservation and development does not have a sufficient basis to issue a certificate of eligibility and reasonable cost after the timely response of an applicant to the third checklist concerning such application. After the department of housing preservation and development has denied an application for such reason, the department of housing preservation and development shall permit no further applications for the same eligible construction.
6.An application for a certificate of eligibility and reasonable cost shall also include an affidavit of no harassment.
(a)Such affidavit shall set forth the following information: (1) The name of every owner of record, owner of a substantial interest in the eligible building, and entity owning the eligible building or sponsoring the eligible construction; and (2) A statement that no owner of record, owner of a substantial interest in the eligible building, or entity owning the eligible building or sponsoring the eligible construction, within the 5 years prior to the completion date, had been found to have harassed or unlawfully evicted tenants by judgment or determination of a court or agency, including a non-governmental agency, having appropriate legal jurisdiction under the penal law, any state or local law regulating rents, or any state or local law relating to harassment of tenants or unlawful eviction.
(b)No eligible building shall be eligible for rehabilitation program benefits where: (1) Any affidavit required under this paragraph has not been filed; (2) Any such affidavit contains a willful misrepresentation or omission of any material fact; or (3) Any owner of record, owner of a substantial interest in the eligible building, or entity owning the eligible building or sponsoring the eligible construction, within the 5 years prior to the completion date, had been found to have harassed or unlawfully evicted tenants by judgment or determination of a court or agency, including a non-governmental agency, having appropriate legal jurisdiction under the penal law, any state or local law regulating rents, or any state or local law relating to harassment of tenants or unlawful eviction, until and unless the finding is reversed on appeal.
(c)Notwithstanding the provisions of any general, special, or local law to the contrary, the corporation counsel or other legal representative of the city of New York or the district attorney of any county within the city of New York, may institute an action or proceeding in any court of competent jurisdiction that may be appropriate or necessary to determine whether any owner of record, owner of a substantial interest in the eligible building, or entity owning the eligible building or sponsoring the eligible construction has harassed or unlawfully evicted tenants.
7.Notwithstanding the provisions of any general, special, or local law to the contrary, applications for a certificate of eligibility and reasonable cost shall be filed electronically if the department of housing preservation and development makes electronic filing available and requires electronic filing by rules and regulations. d. Additional requirements for an eligible rental building other than one owned and operated by a limited-profit housing company. In addition to all other conditions of eligibility for rehabilitation program benefits, an eligible rental building, other than one owned and operated by a limited-profit housing company, must also comply with all provisions of this subdivision. Notwithstanding the foregoing, an eligible rental building that is the recipient of substantial governmental assistance shall not be required to comply with the provisions of paragraph 2 of this subdivision.
(d)The receiver shall be entitled to the same fees, commissions, and necessary expenses as receivers in actions to foreclose mortgages. Such fees and commissions shall be paid into the fund created pursuant to section 27-2111. The receiver shall be liable only in such receiver’s official capacity for injury to person and property by reason of conditions of the eligible building in a case where an owner would have been liable; such receiver shall not have any liability in such receiver’s personal capacity. The personnel and facilities of the department of housing preservation and development and the corporation counsel shall be availed of by the receiver for the purpose of carrying out such receiver’s duties, and the costs of such services shall be deemed a necessary expense of the receiver.
8.Recovery of expenses of receivership; lien of receiver.
9.Obligations of owner not affected. Nothing herein contained shall be deemed to relieve the owner of any civil or criminal liability incurred or any duty imposed by law by reason of acts or omissions of the owner prior to the appointment of a receiver; nor shall anything contained herein be construed to suspend during the receivership any obligation of the owner for the payment of taxes or other operating and maintenance expenses of the eligible building nor of the owner or any other person for the payment of mortgages or liens. t. Rulemaking. Each agency or department to which functions are assigned by this section may adopt and promulgate rules and regulations for the effectuation of the purpose of this section. u. State enabling law. This section is enacted pursuant to the provisions of subdivision 21 of section 489 of the real property tax law. v. Reporting. No later than 2 years after the effective date of this local law, and annually thereafter, the department of housing preservation and development, in consultation with the department of finance, shall submit to the mayor and the speaker of the council and post on its website a report on the actions by the department of housing preservation and development in the preceding fiscal year related to rehabilitation program benefits. Such report shall include, but not be limited to: 1. The total amount of the rehabilitation program benefits approved for each eligible building, the number of eligible buildings in each community district, neighborhood tabulation area, council district, New York state assembly district, and New York state senate district, the building classification, in accordance with section 302 of the New York city building code, of each such eligible building, the number of dwelling units in each such eligible building, and the number of qualifying rental units in each such eligible building; and 2. The number of eligible buildings whose rehabilitation program benefits were terminated or revoked and the number of eligible buildings against which actions were taken, pursuant to subparagraphs (a) through (c) of paragraph 7 of subdivision d, to address noncompliance with the provisions of such subdivision, and the street address of each such eligible building. w. Updates to the certified reasonable cost schedule. When updating the certified reasonable cost schedule, the department of housing preservation and development shall consider the factors such department deems relevant, such as the requirements imposed on eligible buildings by local law, including, but not limited to, articles 302, 320, and 321 of chapter 3 of title 28, and the effects of inflation on such costs since the prior date the certified reasonable cost schedule was updated. (L.L. 2024/122, 12/18/2024, eff. 12/18/2024)
