N.Y. Real Property Tax Law § 421-p: Exemption of newly-constructed or converted rental multiple dwellings

* § 421-p. Exemption of newly-constructed or converted rental multiple

dwellings. 1. (a) A city, town or village may, by local law, provide for

the exemption of rental multiple dwellings constructed or converted in a

benefit area designated in such local law from taxation and special ad

valorem levies, as provided in this section. Subsequent to the adoption

of such a local law, any other municipal corporation in which the

designated benefit area is located may likewise exempt such property

from its taxation and special ad valorem levies by local law, or in the

case of a school district, by resolution.

(b) As used in this section, the term "benefit area" means the area

within a city, town or village, designated by local law, to which an

exemption, established pursuant to this section, applies.

(c) The term "rental multiple dwelling" means a structure, other than

a hotel, consisting of ten or more dwelling units, where all of the

units are rented for residential purposes, and twenty-five percent of

such units, upon initial rental and upon each subsequent rental

following a vacancy during the benefit period, are affordable to and

restricted to occupancy by individuals or families whose household

income does not exceed a weighted average of no less than sixty percent

of the area median income and no more than eighty percent of the area

median income, adjusted for family size, at the time that such

households initially occupy such dwelling units, provided further that

all of the income restricted units upon initial rental and upon each

subsequent rental following a vacancy during the restriction period or

extended restriction period, as applicable, shall be affordable to and

restricted to occupancy by individuals or families whose household

income does not exceed one hundred percent of the area median income,

adjusted for family size, at the time that such households initially

occupy such dwelling units. Provided further, that any local law

authorizing an exemption pursuant to this section may provide for the

area median income weighted average within the amounts set forth in this

paragraph. Such restriction period shall be in effect coterminous with

the benefit period, provided, however, that the tenant or tenants in an

income restricted dwelling unit at the time such restriction period ends

shall have the right to lease renewals at the income restricted level

until such time as such tenant or tenants permanently vacate the

dwelling unit.

2. Eligible newly-constructed or converted rental multiple dwellings

in a designated benefit area shall be wholly exempt from taxation while

under construction, subject to a maximum of three years. Such property

shall then be exempt for an additional period of twenty-five years,

provided, that the exemption percentage during such additional period of

twenty-five years shall begin at ninety-six percent and shall decrease

by four percent each year thereafter. Provided, however:

(a) Taxes shall be paid during the exemption period in an amount at

least equal to the taxes paid on such land and any improvements thereon

during the tax year preceding the commencement of such exemption.

(b) No other exemption may be granted concurrently to the same

improvements under any other section of law.

3. To be eligible for exemption under this section, any new

construction shall take place on vacant, predominantly vacant or

underutilized land, or on land improved with a non-conforming use or on

land containing one or more substandard or structurally unsound

dwellings, or a dwelling that has been certified as unsanitary by the

local health agency. The provisions of this subdivision shall not apply

to any new conversions undertaken pursuant to this section.

4. Application for exemption under this section shall be made on a

form prescribed by the commissioner and filed with the assessor on or

before the applicable taxable status date.

5. In the case of a newly constructed or converted property which is

used partially as a rental multiple dwelling and partially for

commercial or other purposes, the portion of the property that is used

as a rental multiple dwelling shall be eligible for the exemption

authorized by this section if:

(a) The square footage of the portion used as a rental multiple

dwelling represents at least fifty percent of the square footage of the

entire property;

(b) The rental units are affordable to individuals or families as

determined according to the criteria set forth in paragraph (c) of

subdivision one of this section; and

(c) The requirements of this section are otherwise satisfied with

respect to the portion of the property used as a rental multiple

dwelling.

6. (a) For the purposes of this subdivision, the following terms shall

have the following meanings:

(i) "Applicant" shall mean an applicant for the exemption authorized

by this section and/or any successor to such applicant.

(ii) "Covered building service employer" shall mean any applicant

and/or any employer of building service employees for such applicant

including, but not limited to, a property management company or

contractor.

(iii) "Building service employee" shall mean any person who is

regularly employed at, and performs work in connection with the care or

maintenance of, an eligible multiple dwelling, including, but not

limited to, a watchman, guard, doorman, building cleaner, porter,

handyman, janitor, gardener, groundskeeper, elevator operator and

starter, and window cleaner, but not including persons regularly

scheduled to work fewer than eight hours per week at such eligible

multiple dwelling.

(iv) "Fiscal officer" shall mean the commissioner of labor.

(v) "Eligible multiple dwelling" shall mean any newly-constructed or

converted rental multiple dwellings that receive benefits pursuant to

this section.

(b) All building service employees employed by the covered building

service employer at the eligible multiple dwelling shall receive the

applicable prevailing wage in accordance with article nine of the labor

law for the duration of the benefit period, regardless of whether such

benefits are revoked or terminated. Such applicable prevailing wage

shall in no case be lower than the prevailing wage provided to building

service employees for work performed within the respective county under

the collective bargaining agreement covering the largest number of

hourly building service employees employed at residential buildings

within such county in each job classification established by the

commissioner of labor. The commissioner of labor shall determine the

applicable prevailing wage rates and prevailing rate of fringe benefits

for each job classification consistent with the corresponding job

classifications covered by such collective bargaining agreements. To

determine the applicable supplement benefit rate, the commissioner of

labor shall identify the applicable hourly, weekly or monthly cost to an

employer as specified under the applicable collective bargaining

agreement of providing such supplements.

(c) (i) The fiscal officer shall have the power to enforce the

provisions of this subdivision. In enforcing such provisions, the fiscal

officer shall have the power: (A) to investigate or cause an

investigation to be made to determine the prevailing wages for building

service employees, and in making such investigation, the fiscal officer

may utilize wage and fringe benefit data from various sources,

including, but not limited to, data and determinations of federal, state

or other governmental agencies; provided, however, that the provision of

a dwelling unit shall not be considered wages or a fringe benefit; (B)

to institute and conduct inspections at the site of the work or

elsewhere; (C) to examine the books, documents and records pertaining to

the wages paid to, and the hours of work performed by, building service

employees; (D) to hold hearings and, in connection therewith, to issue

subpoenas, the enforcement of which shall be regulated by the civil

practice law and rules, administer oaths and examine witnesses; (E) to

make a classification by craft, trade or other generally recognized

occupational category of the building service employees and to determine

whether such work has been performed by the building service employees

in such classification; (F) to require the applicant to file with the

fiscal officer a record of the wages actually paid to the building

service employees and of their hours of work; (G) to delegate any of the

foregoing powers to such fiscal officer's deputy or other authorized

representative; (H) to promulgate rules as such fiscal officer shall

consider necessary for the proper execution of the duties,

responsibilities and powers conferred upon him or her by the provisions

of this subdivision; and (I) to prescribe appropriate sanctions for

failure to comply with the provisions of this subdivision.

(ii) For each violation of paragraph (b) of this subdivision, the

fiscal officer may require the payment of:

(A) back wages and fringe benefits;

(B) liquidated damages up to three times the amount of the back wages

and fringe benefits for willful violations; and/or

(C) reasonable attorneys' fees. If the fiscal officer finds that the

applicant has failed to comply with the provisions of this subdivision,

such fiscal officer shall present evidence of such non-compliance to the

village, town, or city that enacted a local law pursuant to this

section, or to any municipal agency or entity identified in such local

law.

(d) Paragraph (b) of this subdivision shall not be applicable to: (i)

an eligible multiple dwelling containing less than thirty dwelling

units; or (ii) an eligible multiple dwelling whose new construction or

conversion is carried out with the substantial assistance of grants,

loans or subsidies provided by a federal, state or local governmental

agency or instrumentality pursuant to a program for the development of

affordable housing.

(e) The applicant shall submit a sworn affidavit with its application

certifying that it shall ensure compliance with the requirements of this

subdivision or is exempt in accordance with paragraph (d) of this

subdivision. Upon the approval of the village, town, or city that

enacted a local law pursuant to this section, or of any municipal agency

or entity identified in such local law, of such application, the

applicant who is not exempt in accordance with paragraph (d) of this

subdivision shall submit annually a sworn affidavit to the fiscal

officer certifying that it shall ensure compliance with the requirements

of this subdivision.

(f) The village, town, or city that enacted a local law pursuant to

this section, or any municipal agency or entity identified in such local

law shall annually publish a list of all eligible sites subject to the

requirements of this subdivision and the affadavits required pursuant to

paragraph (e) of this subdivision.

(g) If a covered building service employer has committed three

violations of the requirements of paragraph (b) of this subdivision with

respect to the same eligible multiple dwelling within a five-year

period, the village, town, or city that enacted a local law pursuant to

this section, or any municipal agency or entity identified in such local

law may revoke any benefits associated with such eligible multiple

dwelling under this section. For purposes of this paragraph, a

"violation" of paragraph (b) of this subdivision will be deemed a

finding by the fiscal officer that a covered building service employer

has failed to comply with paragraph (b) of this subdivision and has

failed to cure the deficiency within three months of such finding.

Provided, however, that after a second such violation, the applicant

shall be notified that any further violation may result in the

revocation of benefits under this section and that the fiscal officer

shall publish on its website a list of all applicants with two

violations as defined in this paragraph. If benefits are terminated or

revoked for failure to comply with this subdivision all of the

affordable housing units shall remain subject to rent stabilization and

all other requirements of this section for the duration of the

restriction period, regardless of whether such benefits have been

terminated or revoked.

7. The exemption authorized by this section shall not be available in

a city with a population of one million or more.

8. Any recipient of the exemption authorized by this section or their

designee shall certify compliance with the provisions of this section

under penalty of perjury, at such time or times and in such manner as

may be prescribed in the local law adopted by the city, town or village

pursuant to paragraph (a) of subdivision one of this section, or by a

subsequent local law. Such city, town or village may establish such

procedures as it deems necessary for monitoring and enforcing compliance

of an eligible building with the provisions of this section.

* NB There are two § 421-p's