Amd SS489, 467-a & 421-a, RPT L; amd SS11-1706 & 11-243, NYC Ad Cd; amd SS281, 286, 285 & 284, Mult Dwell L
Relates to the the exemption from taxation of alterations and improvements to multiple dwellings to eliminate fire and health hazards; relates to a partial abatement of real property taxes for condos and co-ops, in a city having a population of one million or more; relates to interim multiple dwellings in a city with a population of one million or more persons; relates to certain tax credits and exemptions in a city having a population of one million or more.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3354
SPONSOR: Wright (MS) TITLE OF BILL: An act to amend the real property tax law, in relation
to exemption from taxation of alterations and improvements to multiple
dwellings to eliminate fire and health hazards and a partial abatement
of real property taxes for condominiums and cooperatives, in a city
having a population of one million or more; to amend the administrative
code of the city of New York, in relation to certain tax credits; to
amend the real property tax law, in relation to interim multiple dwell-
ings in a city with a population of one million or more; to amend the
multiple dwelling law, in relation to interim multiple dwellings in a
city with a population of one million or more; and providing for the
repeal of certain provisions of the multiple dwelling law upon expira-
tion thereof
PURPOSE: The purpose of this legislation is to continue to provide an
incentive to owners to rehabilitate and upgrade existing multiple dwell-
ings. Additionally, this legislation would make various changes to the
Loft Law in order to provide clarifying language to allow for easier
interpretation and to adjust rental increases for compliance with fire
and safety standards. This legislation would also, amend the Real Prop-
erty Tax Law to incentivize the construction of new housing. Addi-
tionally, the bill would amend a tax abatement for cooperatives and
condominiums to enhance the abatement for primary residents. Finally,
the bill would create an S-corp tax credit.
SUMMARY OF PROVISIONS:
This bill would:
* extend from June 1, 2011, until January 1, 2015, the deadline for
local legislative action providing J-51 tax incentives for the rehabili-
tation and upgrading of multiple dwellings, and extend the completion
date from December 31, 2011, to June 30, 2015;
* define "substantial governmental assistance," and create an eligibil-
ity criteria for alterations/improvements to cooperative and condominium
apartments with an assessed value of $30K to $40K that requires such
units to receive substantial governmental assistance;
* provide that J-51 benefits would only be available for conversions
from commercial to residential properties receiving substantial govern-
mental assistance;
* require that an applicant pay two times the actual costs for any addi-
tional inspections if such applicant has not completed work required on
the date of the initial inspection;
* provide in statute that the revocation of J-51 benefits does not
exempt any multiple dwelling, building, or structure from continued
compliance with the requirements of RPTL § 489 or of any local law or
ordinance providing for these benefits;
* authorize the locality to require the electronic filing of applica-
tions;
* reduce the minimum space requirement needed to qualify as a loft
apartment from 550 square feet to 400 square feet;
* adjust the exclusion of units in buildings that contain certain
hazardous activities to exclude those units that had hazardous activ-
ities on June 21, 2010, that continue until the date of submission for
coverage under the Loft Law;
* reduce the percent of rent increases allowed for coming into various
stages of compliance for fire and safety standards;
* allow the Loft Board to include units under the loft law despite any
incompatible uses in the building;
* incentivize the construction of affordable and market rate units in
areas of Manhattan through the 421-a benefit program;
* eliminate language added in Chapter 97 of the Laws of 2011 intended to
allow extended periods of construction for certain projects participat-
ing in the 421-a program;
* require the Department of Housing Preservation and Development to make
information relating the J-51 program available on its website, to
provide a contact phone number for tenants to determine benefits avail-
able through the J-51 program, and to convene a task force that shall
examine and report on methods to improve the transparency of J-51;
* amend the term "applicant" to permit the Commissioner. of Finance to,
by rule, designate the owner of a dwelling unit as an applicant;
* provide that in the fiscal year commencing in calendar years two thou-
sand twelve, two thousand thirteen or two thousand fourteen, no more
than a maximum of three dwelling units owned by any unit owner or tenant
stock-holder in a single building, one of which must be the primary
residence of such owner or tenant-stockholder, shall be eligible to
receive a partial abatement pursuant to paragraphs d-1 through d-4 of
the section;
* modify and extend the program for three additional years (for fiscal
years commencing in 2012, 2013 and 2014). Paragraphs d-1 through d-4
provide the benefit schedule for dwelling units that serve as the prima-
ry residence of their unit owner and up to two additional units located
within the same property that are also owner by such owner.
The benefits are as follows: * In fiscal years commencing in 2012, 2013
and 2014, dwelling units in property whose average unit assessed value
is less than or equal to $50,000 shall receive a partial abatement of
25%, 26.5% and 28.1% respectively.
* In fiscal years commencing in 2012, 2013 and 2014, dwelling units in
property whose average unit. assessed value is more than $50,000, but
less than or equal to $55,000, shall receive a partial abatement of
22.5%, 23.8.% and 25.2% respectively.
* In fiscal years commencing in 2012, 2013 and 2014, dwelling units in
property whose average unit. assessed value is more than $55,000, but
less than or equal to $60,000, shall receive a partial abatement of
20.0%, 21.2% and 22.5% respectively.
* In fiscal years commencing in 2012, 2013 and 2014, dwelling units in
property whose average unit assessed value is more than $60,000, shall
receive a partial abatement of 17.5%.
* provide the benefit schedule for units that received the abatement in
fiscal year two thousand twelve, which are located in a property that
does not contain a unit that is the primary residence of the owner of
such units. The benefits are as follows:
* In fiscal years commencing in 2012, 2013 and 2014, dwelling units in
property whose average unit assessed value is less than or equal to
$15,000 shall receive a partial abatement of 12.5%, 6.25% and no abate-
ment respectively.
* In fiscal years commencing in 2012, 2013 and 2014, dwelling units in
property whose average unit assessed value is greater than $15,000 shall
receive a partial abatement of 8.75%, 4.375% and no abatement respec-
tively.
* adjust how the condominium and cooperative abatement is calculated;
* amend the application process for the condominium and cooperative
abatement program;
* provide for S-Corporation tax credits against the NYC local PIT for
city residents for taxable years beginning on or after January 1, 2014
and before July 1, 2015. Benefits would be provided to S-Corporations
with city taxable incomes of less than one hundred thousand dollars;
* authorize the Commissioner to promulgate rules to include denial,
termination or revocation of any abatement if the dwelling unit real
property taxes, water and sewer charges, payments in lieu of taxes or
other municipal charges are due and owing unless they are currently
being paid in timely installments pursuant to a written agreement with
New York City; and
* authorize the Commissioner of Finance to prepare and submit amended
tax bills to taxpayers to reflect any adjustments necessary to apply the
abatement.
JUSTIFICATION: The J-51 benefit program provides incentives for land-
lords to engage in rehabilitation projects to make improvements. Bene-
fits for the program vary depending on the location of the building and
the type of improvements to be made. This legislation would make several
changes to the program such as provide that J-51 benefits would only be
available for conversions from nonresidential to residential properties
receiving substantial governmental assistance. This would ensure that
some of the housing contained in these projects remains affordable to
low and moderate income families. Also, the bill would create a penalty
that encourages owners to complete their J-51 improvements in a timely
and correct manner.
This amendment to the Loft Law is necessary to clarify ambiguities in
the law to more accurately represent the intent and to update the
language to reflect the current rental market. Under current law, land-
lords are allowed to raise rents in excess of twenty percent as incen-
tives to convert the units and bring them into compliance with current
fire and safety standards. These rent increases were appropriate when
the original Loft Law of 1982 was first passed when loft residents were
paying well under market rate. Today, these rent increases are overly
burdensome, unaffordable and threaten to displace tenants. Furthermore,
the bill would bring a greater number of units that are not in compli-
ance with current fire and safety standards and are occupied for resi-
dential purposes into compliance with the existing law.
The incentivizing residential construction projects will have the imme-
diate beneficial effect of creating new housing stock, and stimulating
the economy through job creation and development. By extending the 421-a
program to projects in the FAR 15 zones, this legislation would stimu-
late the creation of much needed new affordable and market rate housing.
In order to participate in the program developers would need to provide
on-site affordable housing or provide funding to New York City's Depart-
ment of Housing Preservation and Development for the construction of
affordable housing. The bill also makes technical changes to remove
unnecessary language which was added as the result of last year's amend-
ments to the 421-a real property tax exemption program.
Since 1996, the City of New York has offered, with New York State
authorization, a partial property tax abatement program for co-op and
condo owners. The program was established to address inequities in the
real property tax system in New York City that burden owners of co-op
and condominium units with larger tax bills than the owners of compar-
ably valued one-, two and three-family homes. The original intent of the
program was to ensure equity to those co-op and condo owners who prima-
rily reside in New York City. However, a significant number of current
beneficiaries are not owner-occupants but investors who were not the
intended recipients. This bill extends the program for three additional
years, provides additional benefit by enriching the abatement for
lower-valued properties, and restores the original intent of the program
by phasing out the benefit for non-primary residents.
LEGISLATIVE HISTORY: 2012: A.10798 (Lopez, V.) - Referred to Ways and
Means
FISCAL IMPLICATIONS: None to the State
EFFECTIVE DATE:
This act shall take effect immediately and shall be deemed to have been
in full force and effect on and after June 1, 2012; provided that:
(a) sections one, two and three of this act shall be deemed to have been
in full force and effect on and after December 31, 2011;
(b) the amendments made to section 489 of the real property tax law by
section three of this act shall not be deemed to change the eligibility
for benefits, pursuant to such section and any local law or ordinance
providing for benefits pursuant to such section, as a result of conver-
sions, alterations or improvements completed before December 31, 2011;
(c) the provisions of section fourteen of this act shall be deemed to
have been in full force and effect on and after December 31, 2007;
(d) the provisions of sections fifteen, sixteen and seventeen of this
act shall be deemed to have been in full force and effect on and after
December 28, 2010;
(e) with respect to any application for a preliminary certificate of
eligibility that is filed no later than June 24, 2012, or that is filed
for a project that was the subject of mortgage foreclosure proceedings
or other lien enforcement litigation by a lender on or before June 24,
2012, such project shall be subject to that portion of the definition of
"commence" contained in item (1) of clause (iv) of subparagraph (2) of
paragraph (b) of subdivision (a) of section 6-09 of title twenty-eight
of the rules of the city of New York;
(f) sections eighteen, nineteen and twenty of this act shall be deemed
to have been in full force and effect on and after June 1, 2011;
(g) notwithstanding any inconsistent provision of this act, the amend-
ment to subdivision 5 of section 281 of the multiple dwelling law made
by section twenty-one of this act in relation to the authority of the
loft board to exempt categories or subcategories of units or buildings
by rule from determinations of inherently incompatible uses shall be
deemed to have been in force and effect on and after June 21, 2010 and
to authorize rules of the loft board promulgated after such date that
make such exemptions; and
(h) sections twenty-one, twenty-two, twenty-three and twenty-four shall
expire and be deemed repealed on June 30, 2015.
