City council reinstates J-51 tax break for apartment buildings

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Councilor Barry Grodenchik and State Senator Kevin Parker (Getty)

A home improvement tax break that has been dead for over a year is now one step away from relaunching.

The city council’s housing and buildings committee on Tuesday approved the renewal of the J-51 reduction and exemption program for the next six months. The program expired last year, prompting the real estate industry to restore it.

In June, the state legislature passed a measure allowing the city to reinstate the tax break, provided it does so by the end of this year. City council is preparing to beat the deadline by just over two weeks.

The measure would revive the tax break until June 30, 2022 and apply it retroactively to projects that missed the program when it expired in June 2020. The city council as a whole will vote on the bill on Wednesday, when it is passed. last meeting of the year. .

Under the program, participants are exempt for 14 or 34 years from taxes on capital gains resulting from renovation or transformation works. They also benefit from a reduction of 50 to 150% of the “reasonable” cost of the work.

Landowners have called for changes to the program, citing that the city’s estimates of “reasonable” costs for some repair work are out of date. Tenant advocates also criticized the tax break, saying the city and state failed to adequately enforce requirements that apartments remain at stabilized rent as a condition of the incentive.

Council member Helen Rosenthal, who represents the Upper West Side, voiced what she called a “ceremonial” vote against the renewal of the program.

“It’s a vote against to send a message to the next Council and the New York State Legislature that we really need to amend J-51 so that it can do more to ensure apartments are built for them. Low-income New Yorkers, ”she said. .

Board member Barry Grodenchik, one of the bill’s sponsors, highlighted the importance of the program for co-op owners in his district of Eastern Queens. Cooperative groups argued that J-51 helps pay for necessary repairs, the cost of which would otherwise fall on residents.

Garodenchik noted that he hopes the issues with the J-51 will be resolved before the program expires again in six months.

The committee also approved a resolution urging the state legislature to pass an eviction for good reasons, which would effectively ban rent increases of 3%, or 150% of the region’s consumer price index. , whichever is greater. Several locations across the state have adopted their own versions of the measure, creating momentum for tenant advocates to struggle to enforce the policy statewide.


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