N.Y. Real Property Tax Law § 467-m: Exemption from local real property taxation of certain multiple dwellings in a city having a population of one million or more

§ 467-m. Exemption from local real property taxation of certain

multiple dwellings in a city having a population of one million or more.

1. Definitions. For purposes of this section, the following terms shall

have the following meanings:

a. "Affordable housing from commercial conversions tax incentive

benefits" hereinafter referred to as "AHCC program benefits", shall mean

the exemption from real property taxation authorized pursuant to this

section.

b. "Affordability requirement" shall mean that within any eligible

multiple dwelling: (i) not less than twenty-five percent of the dwelling

units are affordable housing units; (ii) not less than five percent of

the dwelling units are affordable housing forty percent units; (iii) the

weighted average of all income bands for all of the affordable housing

units does not exceed eighty percent of the area median income, adjusted

for family size; (iv) there are no more than three income bands for all

of the affordable housing units; and (v) no income band for affordable

housing units exceeds one hundred percent of the area median income,

adjusted for family size.

c. "Affordable housing forty percent unit" shall mean a dwelling unit

that: (i) is situated within the eligible multiple dwelling for which

AHCC program benefits are granted; and (ii) upon initial rental and upon

each subsequent rental following a vacancy during the restriction

period, is affordable to and restricted to occupancy by individuals or

families whose household income does not exceed forty percent of the

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

household initially occupies such dwelling unit.

d. "Affordable housing unit" shall mean, collectively and

individually: (i) an affordable housing forty percent unit; and (ii)

any other unit that meets the affordability requirement upon initial

rental and upon each subsequent rental following a vacancy during the

restriction period, and is affordable to and restricted to occupancy by

individuals or families whose household income does not exceed the

income bands established in conjunction with such affordability

requirement.

e. "Agency" shall mean the New York city department of housing

preservation and development.

f. "Application" shall mean an application for AHCC program benefits.

g. "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.

h. "Commencement date" shall mean, with respect to an eligible

conversion, the date upon which a permit is issued by the local

department of buildings for alterations that require the issuance of a

new certificate of occupancy, provided that such alterations constitute

an eligible conversion.

i. "Completion date" shall mean the date upon which the local

department of buildings issues the first temporary or permanent

certificate of occupancy covering all residential areas of an eligible

multiple dwelling.

j. "Construction period" shall mean, with respect to any eligible

multiple dwelling, a period: (i) beginning on the later of the

commencement date or three years before the completion date; and (ii)

ending on the day preceding the completion date.

k. "Dwelling" or "dwellings" shall have the same meaning as set forth

in subdivision four of section four of the multiple dwelling law.

l. "Eligible conversion" shall mean the conversion of a

non-residential building, except a hotel or other class B multiple

dwelling, to an eligible multiple dwelling.

m. "Eligible multiple dwelling" shall mean a multiple dwelling which

was subject to an eligible conversion in which: (i) all dwelling units

included in any application are operated as rental housing; (ii) six or

more dwelling units have been created through an eligible conversion;

(iii) the commencement date is after December thirty-first, two thousand

twenty-two and on or before June thirtieth, two thousand thirty-one; and

(iv) the completion date is on or before December thirty-first, two

thousand thirty-nine.

n. "Fiscal officer" shall mean the comptroller or other analogous

officer in a city having a population of one million or more.

o. "Floor area" shall mean the horizontal areas of the several floors,

or any portion thereof, of a dwelling or dwellings, and accessory

structures on a lot measured from the exterior faces of exterior walls,

or from the center line of party walls.

p. "Income band" shall mean a percentage of the area median income,

adjusted for family size, that is a multiple of ten percent.

q. "Manhattan prime development area" shall mean any tax lot now

existing or hereafter created which is located entirely south of 96th

street in the borough of Manhattan.

r. "Market unit" shall mean a dwelling unit in an eligible multiple

dwelling other than an affordable housing unit.

s. "Marketing band" shall mean maximum rent amounts ranging from

twenty percent to thirty percent of the area median income or income

band, respectively, that is applicable to a specific affordable housing

unit.

t. "Multiple dwelling" shall have the same meaning as set forth in

subdivision seven of section four of the multiple dwelling law.

u. "Non-residential building" shall mean a structure or portion of a

structure, except a hotel or other class B multiple dwelling, having at

least one floor, a roof and at least three walls enclosing all or most

of the space used in connection with the structure or portion of the

structure, which has a certificate of occupancy for commercial,

manufacturing or other non-residential use for not less than ninety

percent of the aggregate floor area of such structure or portion of such

structure, or other proof of such non-residential use as is acceptable

to the agency.

v. "Non-residential tax lot" shall mean a tax lot that does not

contain any dwelling units.

w. "Rent stabilization" shall mean, collectively, the rent

stabilization law of nineteen hundred sixty-nine, the rent stabilization

code, and the emergency tenant protection act of nineteen seventy-four,

all as in effect as of the effective date of this section or as amended

thereafter, together with any successor statutes or regulations

addressing substantially the same subject matter.

x. "Residential tax lot" shall mean a tax lot that contains dwelling

units.

y. "Restriction period" shall mean a period commencing on the

completion date and extending in perpetuity, notwithstanding any earlier

termination or revocation of AHCC program benefits.

z. "Thirty-five year benefit shall mean: (i) for the construction

period, a one hundred percent exemption from real property taxation,

other than assessments for local improvements; (ii) for the first thirty

years of the restriction period; (A) within the Manhattan prime

development area, a ninety percent exemption from real property

taxation, other than assessments for local improvements; and (B) outside

of the Manhattan prime development area, a sixty-five percent exemption

from real property taxation, other than assessments for local

improvements; (iii) for the thirty-first year of the restriction period,

(A) within the Manhattan prime development area, an eighty percent

exemption from real property taxation, other than assessments for local

improvements; and (B) outside of the Manhattan prime development area, a

fifty percent exemption from real property taxation, other than

assessments for local improvements; (iv) for the thirty-second year of

the restriction period, (A) within the Manhattan prime development area,

a seventy percent exemption from real property taxation, other than

assessments for local improvements; and (B) outside of the Manhattan

prime development area, a forty percent exemption from real property

taxation, other than assessments for local improvements; (v) for the

thirty-third year of the restriction period, (A) within the Manhattan

prime development area, a sixty percent exemption from real property

taxation, other than assessments for local improvements; and (B) outside

of the Manhattan prime development area, a thirty percent exemption from

real property taxation, other than assessments for local improvements;

(vi) for the thirty-fourth year of the restriction period; (A) within

the Manhattan prime development area, a fifty percent exemption from

real property taxation, other than assessments for local improvements;

and (B) outside of the Manhattan prime development area, a twenty

percent exemption from real property taxation, other than assessments

for local improvements; and (vii) for the thirty-fifth year of the

restriction period, (A) within the Manhattan prime development area, a

forty percent exemption from real property taxation, other than

assessments for local improvements; and (B) outside of the Manhattan

prime development area, a ten percent exemption from real property

taxation, other than assessments for local improvements.

aa. "Thirty year benefit" shall mean: (i) for the construction period,

a one hundred percent exemption from real property taxation, other than

assessments for local improvements; (ii) for the first twenty-five years

of the restriction period, (A) within the Manhattan prime development

area, a ninety percent exemption from real property taxation, other than

assessments for local improvements; and (B) outside of the Manhattan

prime development area, a sixty-five percent exemption from real

property taxation, other than assessments for local improvements; (iii)

for the twenty-sixth year of the restriction period, (A) within the

Manhattan prime development area, an eighty percent exemption from real

property taxation, other than assessments for local improvements; and

(B) outside of the Manhattan prime development area, a fifty percent

exemption from real property taxation, other than assessments for local

improvements; (iv) for the twenty-seventh year of the restriction

period, (A) within the Manhattan prime development area, a seventy

percent exemption from real property taxation, other than assessments

for local improvements; and (B) outside of the Manhattan prime

development area, a forty percent exemption from real property taxation,

other than assessments for local improvements; (v) for the twenty-eighth

year of the restriction period, (A) within the Manhattan prime

development area, a sixty percent exemption from real property taxation,

other than assessments for local improvements; and (B) outside of the

Manhattan prime development area, a thirty percent exemption from real

property taxation, other than assessments for local improvements; (vi)

for the twenty-ninth year of the restriction period, (A) within the

Manhattan prime development area, a fifty percent exemption from real

property taxation, other than assessments for local improvements; and

(B) outside of the Manhattan prime development area, a twenty percent

exemption from real property taxation, other than assessments for local

improvements; and (vii) for the thirtieth year of the restriction

period, (A) within the Manhattan prime development area, a forty percent

exemption from real property taxation, other than assessments for local

improvements; and (B) outside of the Manhattan prime development area, a

ten percent exemption from real property taxation, other than

assessments for local improvements.

bb. "Twenty-five year benefit" shall mean: (i) for the construction

period, a one hundred percent exemption from real property taxation,

other than assessments for local improvements; (ii) for the first twenty

years of the restriction period; (A) within the Manhattan prime

development area, a ninety percent exemption from real property

taxation, other than assessments for local improvements; and (B) outside

of the Manhattan prime development area, a sixty-five percent exemption

from real property taxation, other than assessments for local

improvements; (iii) for the twenty-first year of the restriction period,

(A) within the Manhattan prime development area, an eighty percent

exemption from real property taxation, other than assessments for local

improvements; and (B) outside of the Manhattan prime development area, a

fifty percent exemption from real property taxation, other than

assessments for local improvements; (iv) for the twenty-second year of

the restriction period, (A) within the Manhattan prime development area,

a seventy percent exemption from real property taxation, other than

assessments for local improvements; and (B) outside of the Manhattan

prime development area, a forty percent exemption from real property

taxation, other than assessments for local improvements; (v) for the

twenty-third year of the restriction period, (A) within the Manhattan

prime development area, a sixty percent exemption from real property

taxation, other than assessments for local improvements; and (B) outside

of the Manhattan prime development area, a thirty percent exemption from

real property taxation, other than assessments for local improvements;

(vi) for the twenty-fourth year of the restriction period, (A) within

the Manhattan prime development area, a fifty percent exemption from

real property taxation, other than assessments for local improvements;

and (B) outside of the Manhattan prime development area, a twenty

percent exemption from real property taxation, other than assessments

for local improvements; and (vii) for the twenty-fifth year of the

restriction period, (A) within the Manhattan prime development area, a

forty percent exemption from real property taxation, other than

assessments for local improvements; and (B) outside of the Manhattan

prime development area, a ten percent exemption from real property

taxation, other than assessments for local improvements.

2. Benefit. In cities having a population of one million or more,

notwithstanding the provisions of any other general, special or local

law to the contrary, a new eligible multiple dwelling, except a hotel,

that complies with the provisions of this section shall be exempt from

real property taxation, other than assessments for local improvements,

in the amounts and for the periods specified in this section, provided

that such eligible multiple dwelling is used or held out for use for

dwelling purposes. An eligible multiple dwelling that has a commencement

date on or before June thirtieth, two thousand twenty-six shall receive

a thirty-five year benefit; an eligible multiple dwelling that has a

commencement date on or before June thirtieth, two thousand twenty-eight

shall receive a thirty year benefit; and an eligible multiple dwelling

that has a commencement date on or before June thirtieth, two thousand

thirty-one shall receive a twenty-five year benefit.

3. Tax payments. In addition to any other amounts payable pursuant to

this section, the owner of any eligible multiple dwelling receiving AHCC

program benefits shall pay, in each tax year in which such AHCC program

benefits are in effect, all assessments for local improvements.

4. Limitation on benefits for non-residential space. If the aggregate

floor area of commercial, community facility and accessory use space in

an eligible multiple dwelling exceeds twelve percent of the aggregate

floor area in such eligible multiple dwelling, any AHCC program benefits

shall be reduced by a percentage equal to such excess. If an eligible

multiple dwelling contains multiple tax lots, the tax arising out of

such reduction in AHCC program benefits shall first be apportioned pro

rata among any non-residential tax lots. After any such non-residential

tax lots are fully taxable, the remainder of the tax arising out of such

reduction in AHCC program benefits, if any, shall be apportioned pro

rata among the remaining residential tax lots. For the purposes of this

section, accessory use space shall not include home occupation space or

accessory parking space located not more than twenty-three feet above

the curb level.

5. Application of benefit. Based on the certification of the agency

certifying eligibility for AHCC program benefits, the department of

finance shall determine the amount of the exemption pursuant to

subdivisions two and four of this section and shall apply the exemption

to the assessed value of the eligible multiple dwelling.

6. Affordability requirements. An eligible multiple dwelling shall

comply with the affordability requirement defined in paragraph b of

subdivision one of this section during the restriction period. An

eligible multiple dwelling shall also comply with the following

requirements during the restriction period:

a. All affordable housing units in an eligible multiple dwelling shall

share the same common entrances and common areas as rental market rate

units in such eligible multiple dwelling and shall not be isolated to a

specific floor or area of an eligible multiple dwelling. Common

entrances shall mean any means of ingress or egress regularly used by

any resident of a rental dwelling unit in the eligible multiple

dwelling.

b. Unless preempted by the requirements of a federal, state or local

housing program, either: (i) the affordable housing units in an eligible

multiple dwelling shall have a unit mix proportional to the rental

market units; or (ii) at least fifty percent of the affordable housing

units in an eligible multiple dwelling shall have two or more bedrooms

and no more than twenty-five percent of the affordable housing units

shall have less than one bedroom.

c. Notwithstanding any provision of rent stabilization to the

contrary: (i) all affordable housing units shall remain fully subject

to rent stabilization during the restriction period; and (ii) any

affordable housing unit occupied by a tenant that has been approved by

the agency prior to the agency's denial of an eligible multiple

dwelling's application for AHCC program benefits shall remain subject to

rent stabilization until such tenant vacates such affordable housing

unit.

d. All rent stabilization registrations required to be filed shall

contain a designation that specifically identifies affordable housing

units created pursuant to this section as "AHCC program affordable

housing units" and shall contain an explanation of the requirements that

apply to all such affordable housing units.

e. Failure to comply with the provisions of this subdivision that

require the creation, maintenance, rent stabilization compliance, and

occupancy of affordable housing units shall result in revocation of AHCC

program benefits.

f. Nothing in this section shall: (i) prohibit the occupancy of an

affordable housing unit by individuals or families whose income at any

time is less than the maximum percentage of the area median income or

income band, as applicable, adjusted for family size, specified for such

affordable housing unit pursuant to this section; or (ii) prohibit the

owner of an eligible multiple dwelling from requiring, upon initial

rental or upon any rental following a vacancy, the occupancy of any

affordable housing unit by such lower income individuals or families.

g. Following issuance of a temporary certificate of occupancy and upon

each vacancy thereafter, an affordable housing unit shall promptly be

offered for rental by individuals or families whose income does not

exceed the maximum percentage of the area median income or income band,

as applicable, adjusted for family size, specified for such affordable

housing unit pursuant to this section and who intend to occupy such

affordable housing unit as their primary residence. An affordable

housing unit shall not be: (i) rented to a corporation, partnership or

other entity; or (ii) held off the market for a period longer than is

reasonably necessary to perform repairs needed to make such affordable

housing unit available for occupancy.

h. An affordable housing unit shall not be rented on a temporary,

transient or short-term basis. Every lease and renewal thereof for an

affordable housing unit shall be for a term of one or two years, at the

option of the tenant.

i. An affordable housing unit shall not be converted to cooperative or

condominium ownership.

j. The agency may establish by rule such requirements as the agency

deems necessary or appropriate for: (i) the marketing of affordable

housing units, both upon initial occupancy and upon any vacancy; (ii)

monitoring compliance with the provisions of this subdivision; (iii) the

establishment of marketing bands for affordable housing units;

(iv) identifying the permit or permits required for the determination

of the commencement date under this section; and

(v) specifying the legal instrument by which the marketing,

affordability, rent stabilization, permitted rent, and any other

requirement associated with this benefit will be recorded and enforced.

Such requirements may include, but need not be limited to, retaining a

monitor approved by the agency and paid for by the owner of the eligible

multiple dwelling.

k. Notwithstanding any provision of this section to the contrary, a

market unit shall not be subject to rent stabilization unless, in the

absence of AHCC program benefits, the unit would be subject to rent

stabilization.

7. Building service employees. a. For the purposes of this

subdivision, (i) "applicant" shall mean an applicant for AHCC program

benefits and/or any successor to such applicant; and (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.

b. All building service employees employed by the covered building

service employer at the eligible multiple dwelling shall receive the

applicable prevailing wage for the duration of the benefit period,

regardless of whether such benefits provided pursuant to this section

are revoked or terminated.

c. 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: (i) 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; (ii) to institute and

conduct inspections at the site of the work or elsewhere; (iii) to

examine the books, documents and records pertaining to the wages paid

to, and the hours of work performed by, building service employees; (iv)

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; (v) 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; (vi) 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; (vii) to delegate any of

the foregoing powers to his or her deputy or other authorized

representative; (viii) to promulgate rules as he or she 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 (ix) to prescribe appropriate sanctions for failure to comply with

the provisions of this subdivision. 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, he or she shall present evidence of such non-compliance to

the agency.

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 eligible 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 agency's approval 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 agency shall annually publish a list of all eligible sites

subject to the requirements of this subdivision and the affidavits

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 agency 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 shall 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.

8. Concurrent exemptions or abatements. An eligible multiple dwelling

receiving AHCC program benefits shall not receive any exemption from or

abatement of real property taxation under any other law.

9. Voluntary renunciation or termination. Notwithstanding the

provisions of any general, special or local law to the contrary, an

owner shall not be entitled to voluntarily renounce or terminate AHCC

program benefits unless the agency authorizes such renunciation or

termination in connection with the commencement of a tax exemption

pursuant to the private housing finance law or section four hundred

twenty-c of this title.

10. Termination or revocation. The agency may terminate or revoke AHCC

program benefits for failure to comply with this section. 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.

11. Powers cumulative. The enforcement provisions of this section

shall not be exclusive, and are in addition to any other rights,

remedies or enforcement powers set forth in any other law or available

at law or in equity.

12. Multiple tax lots. If an eligible multiple dwelling contains

multiple tax lots, an application may be submitted with respect to one

or more of such tax lots. The agency shall determine eligibility for

AHCC program benefits based upon the tax lots included in such

application and benefits for each such eligible multiple dwelling shall

be based upon the completion date of each such multiple dwelling.

13. Applications. a. The application with respect to any eligible

multiple dwelling shall be filed with the agency no earlier than the

completion date and not later than one year after the completion date of

such eligible multiple dwelling.

b. Notwithstanding the provisions of any general, special, or local

law to the contrary, the agency may require by rule that applications be

filed electronically.

c. The agency may rely on certification by an architect or engineer

submitted by an applicant in connection with the filing of an

application. A false certification by such architect or engineer shall

be deemed to be professional misconduct pursuant to section sixty-five

hundred nine of the education law. Any architect or engineer found

guilty of such misconduct under the procedures prescribed in section

sixty-five hundred ten of the education law shall be subject to the

penalties prescribed in section sixty-five hundred eleven of the

education law and shall thereafter be ineligible to submit a

certification pursuant to this section.

d. Such application shall also certify that all taxes, water charges,

and sewer rents currently due and owing on the property which is the

subject of the application have been paid or are currently being paid in

timely installments pursuant to a written agreement with the department

of finance or other appropriate agency.

14. Filing fee. The agency may require a filing fee of no less than

three thousand dollars per dwelling unit in connection with any

application, except that the agency may promulgate rules:

a. imposing a lesser fee for an eligible multiple dwelling whose

eligible 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; and

b. requiring a portion of the filing fee to be paid upon the

submission of the information the agency requires in advance of

approving the commencement of the marketing process for such eligible

conversion.

15. Multiple residence. A non-residential building undergoing an

eligible conversion shall be considered a multiple residence during the

construction period.

16. Rules. Except as provided in subdivision seven of this section,

the agency shall have the sole authority to enforce the provisions of

this section and may promulgate rules to carry out the provisions of

this section.

17. Penalties for violations of affordability requirements. a. On or

after the expiration date of the benefit provided pursuant to this

section, the agency may impose, after notice and an opportunity to be

heard, a penalty for any violation by an eligible multiple dwelling of

the affordability requirements of subdivision six of this section.

b. A penalty imposed under this subdivision shall be computed as a

percentage of the capitalized value of all AHCC program benefits on the

eligible multiple dwelling, calculated as of the first year that

benefits were granted, not to exceed one thousand percent. The agency

shall establish a schedule and method of calculation of such penalties

pursuant to subdivision sixteen of this section.

c. A penalty imposed under this subdivision shall be imposed against

the owner of the eligible multiple dwelling at the time the violation

occurred, even if such owner no longer owns such eligible multiple

dwelling at the time of the agency's determination.

d. A person or entity who fails to pay a penalty imposed pursuant to

this subdivision shall be guilty of a misdemeanor punishable by

imprisonment not to exceed six months.