Replace 421a, Supersize NYC Buildings

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Governor Kathy Hochul (iStock, Getty Images)

UPDATE January 5, 2022, 3:53 p.m .: Gov. Kathy Hochul wants to repeal a key tax break, lift the ceiling on apartment building density in New York City, and provide free lawyers to upstate tenants.

The governor will propose a replacement for the 421a tax exemption, demanding higher affordability and mandating green building systems, such as carbon neutral technologies and electrification.

She will also call for the creation of an affordable homeownership option in the program, which has been primarily for rental. The tax break is due to expire on June 15 and is often cited by developers as crucial for building multi-family housing in the city.

But tenant advocates and some elected officials have called for its repeal, saying the $ 1.7 billion in property taxes waived each year is a giveaway for real estate developers.

Details on the proposed replacement of Hochul – which would require the passage of a law by the legislature – were not released by the governor’s office, but she included points on the desired changes to the tax break in a book of politics before his first speech on the State of the State. this afternoon.

The real estate industry expects changes to the program, which was last renewed in 2017 and dubbed “Affordable New York”. Two sources said The real deal that developers would likely support adjusting the region’s median income requirements, along with additional sustainability mandates and requirements to hire local construction workers.

Cea Weaver, campaign coordinator for tenant group Housing Justice for All, called the governor’s proposed changes “lipstick on a pig” and said the tax break should be scrapped.

“She has tinkered around the edges of the 421a program, while making it clear that she will still send billions in tax breaks to business owners,” Weaver said in a statement.

Hochul is also proposing a repeal of the state’s cap on residential density, which is capped at a floor area ratio of 12 – a restriction that economists say has contributed to the high cost of housing in New York City. Similar proposals have been made in the past but have recently failed to gain the support of the Assembly.

Eliminating this restriction, according to a policy book setting Hochul’s agenda, would allow the conversion of office buildings into residential spaces.

James Whelan, chairman of the New York Real Estate Board, said removing the cap would pave the way for the city to rezone areas with good public transit. In a statement, he also said that REBNY supports “the creation of a new program that encourages the development of rental apartments and produces more affordable housing for New Yorkers,” referring to anything that replaces 421a.

The book also says Hochul will propose legislation to further ease zoning restrictions to make it easier for these conversions to move forward.

The proposal echoes a measure introduced last year by Manhattan State Senator Brian Kavanagh that allowed some hotels within 800 feet of residential neighborhoods to use their existing certificates of occupancy to full-time residential use. These hotels would be subject to rent stabilization and other accommodation arrangements.

The governor’s proposal would also allow offices built before 1980 or those south of 60th Street in Manhattan to be converted into housing until December 2027.

Former Gov. Andrew Cuomo had proposed a workaround of local zoning rules to allow hotel and office conversions, but the proposal was scrapped in favor of a measure that prioritized housing for those on the move. low income and homeless and would be overseen by non-profit organizations. No conversion has yet been initiated under the program.

The governor also plans to introduce a northern version of the rule of law to one lawyer, which would provide free legal assistance to tenants facing eviction if they reach 200% of the federal poverty line or below.

The state’s moratorium on evictions expires on January 15, and advocates have been pushing for an expulsion for good reason before it happens. The governor did not mention the legislation, which would ban rent increases of more than 3% or 150% of the inflation rate, whichever is greater, in his political platform. A hearing for good reasons is scheduled for Friday.

The governor also wants to create 2 million electrified or electrified-ready homes statewide by 2030, and plans to introduce legislation that would require new construction to produce zero emissions on-site by 2027.

New York City recently passed a measure that will require all new buildings to go electric by 2027 and small projects by 2024. A pending bill would require all new buildings to go down. electricity by 2024.

Hochul will also pass legislation that requires municipalities to allow at least one accessory housing unit on zoned owner-occupied residential lots. Local governments would set the size requirements for these ADUs, sometimes referred to as Grandma’s Apartments.

Last year, Assembly Member Harvey Epstein and Senator Pete Harckham introduced legislation that would require municipalities to legalize ADUs. The measure would also have prohibited landlords from evicting their tenants for non-payment of rent or after imposing a modest rent increase, similar to an eviction for cause.

The governor’s proposal would also create an amnesty program for existing illegal basement apartments in the city, “in the hope that they will be brought into compliance with key building code requirements to ensure the safety of residents. “.

The Blasio administration’s plan to legalize the underground units, which number in the hundreds of thousands, has stalled. Following Hurricane Ida, which killed ten people in basement apartments, the mayor announced the formation of a working group to create new evacuation rules.

Hochul also wants to start a pilot program to explore different models of homeownership, including community land trusts.

Some of the governor’s proposals are likely to be included in his executive budget, which will be hashed by lawmakers ahead of its April 1 deadline. Hochul, who is running for a four-year term, has indicated that she will not take a steamroller approach to Albany or argue with Mayor Eric Adams like her predecessor Andrew Cuomo did with Bill by Blasio.

“What I am proposing is a whole new era for New York,” she said. “The days of governors ignoring the legitimate role of this legislature are over. Gone are the days when the governor of New York and the mayor of New York wasted their time on trivial rivalries.

This story has been updated with comments from Cea Weaver and James Whelan.


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