(a) Scope. This chapter governs the granting of tax exemption and tax abatement pursuant to § 489 of the Real Property Tax Law of the State of New York, § 11-243, formerly § J51-2.5 of the Administrative Code of the City of New York, and Chapter 61 of the Charter, including the procedure for filing an application for tax exemption and tax abatement and the issuance of Certificates of Eligibility and Reasonable Cost by the Office of Tax Incentive Programs of the Department of Housing Preservation and Development.
(b) Construction. This chapter is to be construed to secure the effectuation of the purposes of § 489 of the Real Property Tax Law and § 11-243 of the Administrative Code and in accordance with the general principal of law that exemption statutes are strictly construed against the taxpayer applying for the exemption. Except as hereinafter provided, this chapter, as amended, applies to all applications pending on or submitted after the effective date.
As used in this chapter, the following terms have the meanings indicated below.
Act. "Act" means § 11-243 of the Administrative Code as amended.
Actual Assessed Value. "Actual Assessed Value" means the value of a property for real property tax purposes as determined by assessors as defined in Real Property Tax Law § 102(1).
Administrative Code. "Administrative Code" means the Administrative Code of the City of New York, as amended.
Alterations or improvements. "Alterations" or "improvements" means only those physical changes to an existing dwelling set forth in 28 RCNY § 5-08.
Attorney General. "Attorney General" means the Attorney General of the State of New York.
BLDS. "BLDS" means HPD's Division of Building and Land Development Services or any successor unit.
BLDS Inspection. "BLDS Inspection" means an inspection by BLDS of the items of work that are claimed in an application submitted pursuant to 28 RCNY § 5-05.
Building. "Building" means a complete or substantially complete permanent improvement for occupancy or use within prior to the commencement of construction of alterations, improvements or conversion, provided such improvement is permanently affixed to the land, and that such improvement, exclusive of the land, has an assessed valuation of more than one thousand dollars ($1,000) for the fiscal year immediately preceding the commencement of construction, provided that such assessed valuation test shall not apply to alterations, improvements or conversions is carried out with substantial governmental assistance.
Building Permit. "Building Permit" means a permit that is issued by the Department of Buildings to authorize work on Conversions, Alterations or Improvements.
Certificate of Eligibility and Reasonable Cost. "Certificate of Eligibility and Reasonable Cost" means the certificate issued by the Office pursuant to 28 RCNY § 5-05(g)(3).
Certificate of Occupancy. "Certificate of Occupancy" means a Temporary Certificate of Occupancy or a Permanent Certificate of Occupancy.
Certified reasonable cost or CRC. "Certified reasonable cost" or "CRC" means the cost of a conversion or alterations or improvements certified by the Office to be eligible for the benefits of the Act pursuant to the procedures set forth in this chapter, as evidenced by the issuance by the Office of a "Certificate of Eligibility and Reasonable Cost."
City. "City" means the City of New York.
Class A multiple dwelling. "Class A multiple dwelling" means a Class A multiple dwelling as defined in § 4 of the Multiple Dwelling Law, and shall include a garden-type maisonette dwelling project as defined below. A "Class A multiple dwelling used for single room occupancy" means a dwelling occupied pursuant to § 248 of the Multiple Dwelling Law.
Class B multiple dwelling. "Class B multiple dwelling" means a Class B multiple dwelling as defined in § 4 of the Multiple Dwelling Law.
Commencement of Construction.
(a) For work requiring a permit, "Commencement of Construction" means:
(1) the date of issuance of a Building Permit, or
(2) if physical alterations commenced prior to obtaining a required Building Permit, the actual start date, or
(3) for projects eligible pursuant to 28 RCNY § 5-03(a)(1), (3), (4), (9) or (10), the actual Commencement of Construction in good faith based on prior issuance of a Building Permit. Demolition work does not constitute "Commencement of Construction."
(b) If the issuance of a Building Permit is not required by law, Commencement of Construction means the date any physical operation has commenced solely for the purpose of making eligible Alterations or Improvements. The Office shall require that the Commencement of Construction date be confirmed by an affidavit of a registered architect or licensed professional engineer, along with such other information as the Office may require to substantiate such date, including, but not limited to, an affidavit from the owner, a copy of the work contract, invoices, cancelled checks and a contractor's affidavit. If an application contains a series of Major Capital Improvements, the Commencement of Construction date is that of the first Major Capital Improvement for which benefits are claimed.
Commissioner. "Commissioner" means the Commissioner of the Department of Housing Preservation and Development or his or her designee.
Common area. "Common area" means the area in an existing dwelling other than the area which is within the interior walls of individual dwelling units.
Completion of Construction. "Completion of Construction" means the earlier of:
(i) the date of issuance or reissuance of a Permanent Certificate of Occupancy;
(ii) the date of issuance of a Temporary Certificate of Occupancy for all of the dwelling units therein, provided the only work remaining to secure a Permanent Certificate of Occupancy is work to be performed or completed in space to be used exclusively for non-residential purposes; or
(iii) the date of the issuance of a sign-off by the Department of Buildings as evidenced by the J-3, a computer printout or such other official documentation as may be required by the Department of Buildings and is acceptable to the Office if issued in connection with an eligible Conversion, Alteration or Improvement; provided, however, that
(a) if none of the documents set forth above are required by law, "Completion of Construction" means that date on which physical operations to undertake Alterations or Improvements are concluded as confirmed by the submission of an affidavit of a registered architect or licensed professional engineer, along with such other information as the Office may require to substantiate such date, including, but not limited to, an affidavit from the owner, a copy of the work contract, invoices, cancelled checks and a contractor's affidavit;
(b) if the applicant is a Limited Profit Housing Company which owns and operates a planned unit development consisting of at least fifteen thousand (15,000) dwelling units, "Completion of Construction" means that date on which physical operations to undertake Alterations or Improvements are concluded as confirmed by the submission of an affidavit of a registered architect or licensed professional engineer, along with such other information as the Office may require to substantiate such date, including, but not limited to, an affidavit from the owner, a copy of the work contract, invoices, cancelled checks and a contractor's affidavit. Notwithstanding the foregoing, all required sign-offs including, but not limited to, the J-3 issued by the Department of Buildings, must be submitted to the Office before it issues a Certificate of Eligibility and Reasonable Cost pursuant to 28 RCNY § 5-05(g)(3) to such an applicant; and
(c) if an Alteration Type-1 Permit was issued to any applicant other than an applicant who is a Limited Profit Housing Company which owns and operates a planned unit development consisting of at least fifteen thousand (15,000) dwelling units, the only acceptable evidence of Completion of Construction shall be a Certificate of Occupancy.
Condominium. "Condominium" means any dwelling unit that is owned pursuant to the Condominium Act and is situated in a Class A Multiple Dwelling that either (a) has had an Offering Plan accepted for filing by the Attorney General, (b) has received a "no action" letter from the Attorney General, or (c) has demonstrated that it is not subject to the requirements of § 352(e) of the General Business Law.
Condominium Act. "Condominium Act" means Article IX-B of the Real Property Law.
Conversion. "Conversion" means only those items of work set forth in 28 RCNY § 5-08 which are necessary for the conversion of any building not a Class A multiple dwelling, into a Class A multiple dwelling. For purposes of eligibility for benefits, an interim multiple dwelling claiming benefits for conversion based on compliance with the standards of safety and fire protection set forth in Article 7-B of the Multiple Dwelling Law shall be deemed a Class A multiple dwelling.
Cooperative. "Cooperative" means any Building which is operated exclusively for the benefit of persons or families who are entitled to occupancy in dwelling units by reason of ownership of stock, membership, or other evidence of ownership in the corporate owner of the Building, or for the benefit of such persons or families entitled to occupancy in dwelling units under applicable provisions of law without ownership of stock, membership, or other evidence of ownership in the corporate owner of the Building, where such Building either (a) has had an Offering Plan accepted for filing by the Attorney General, (b) has received a "no action" letter from the Attorney General or (c) has demonstrated that it is not subject to the requirements of § 352(e) of the General Business Law.
Department of Buildings. "Department of Buildings" means the Department of Buildings of the City.
Department of Environmental Protection. "Department of Environmental Protection" means the Department of Environmental Protection of the City.
Department of Finance. "Department of Finance" means the Department of Finance of the City.
Designated historic district or landmark site or structure. "Designated historic district or landmark site or structure" means an historic district or landmark site or landmark structure as designated by the Landmarks Preservation Commission of the City.
DHCR. "DHCR" means the New York State Division of Housing and Community Renewal.
Disposition of Funds Statement. "Disposition of Funds Statement" means written confirmation of funds actually advanced for construction under a building loan agreement made pursuant to Article 8, 8-a, 11, 12, 15 or 22 of the Private Housing Finance Law, or § 312 of the United States Housing Act of 1964 (42 U.S.C. § 1452b), or the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. §§ 12701 et seq.) or § 696-a or § 99(h) of the General Municipal Law, or any other City-supervised housing program, or, in the discretion of the Office, other governmentally supervised housing programs.
Existing dwelling. "Existing dwelling" means a Class A multiple dwelling, including a garden-type maisonette dwelling project, or one or two Class A dwelling units in a building over space used for commercial occupancy which was in existence prior to the commencement of construction of alterations or improvements for which tax exemption or tax abatement is claimed under the terms of the Act, provided that a valuation for the improvement of more than one thousand dollars ($1,000), exclusive of the land, appears on the annual record of assessed valuation of the City for the fiscal year immediately preceding the commencement of construction of alterations or improvements, and provided further that such assessed valuation test shall not apply if the alterations, improvements or conversion are carried out with substantial governmental assistance.
Fannie Mae. "Fannie Mae" means the Federal National Mortgage Association.
Floor Area. "Floor Area" of a Building means the gross square footage of all of the floors and the accessory structures of the Building on the same lot, as measured from the exterior faces of exterior walls or from the center line of party walls. "Floor Area" of a dwelling unit in a Building means the gross square footage within the dwelling unit measured from the interior faces of the demising partitions or party walls.
Garden-type maisonette dwelling project. A "garden-type maisonette dwelling project" shall mean a project consisting of a series of dwelling units which together and in their aggregate were arranged or designed to provide three or more apartments and are provided as a group collectively with all essential services such as, but not limited to, water supply, house sewers and heat, and which are in existence and operated as a unit under single ownership on the date upon which an application for the benefits of the Act is received by the Office, even though Certificates of Occupancy may have been issued for portions thereof as private dwellings.
General Business Law. "General Business Law" means the General Business Law of the State of New York.
Gross cubic content. "Gross cubic content" of a building means the volume within the exterior faces of the perimeter walls (or center line of party walls), above legal grade, and below the roof level, plus any legal residential space below grade level. Roof bulkheads or roof penthouses used exclusively for machinery or equipment shall not be included. New exterior stair towers or elevator shafts shall not be included, unless they substitute for existing stair or elevator space which is converted to residential space.
HDFC. "HDFC" means a housing development fund company organized pursuant to Article XI of the Private Housing Finance Law.
Hotel. "Hotel" shall mean those buildings defined as Hotels by 28 RCNY § 5-03(f)(4).
Housing Maintenance Code. "Housing Maintenance Code" means the Housing Maintenance Code of the City, constituting §§ 27-2001 et seq. of the Administrative Code, as amended.
HPD. "HPD" means the Department of Housing Preservation and Development of the City.
HUD. "HUD" means the United States Department of Housing and Urban Development.
Increase in gross cubic content. "Increase in gross cubic content" means any portion of a building that results from new construction as distinguished from alterations or improvements to the gross cubic content in existence immediately prior to commencement of construction.
Institutional lender. "Institutional lender" means any municipal, federal or state agency and any savings or commercial bank, life insurance company, public real estate investment company, pension fund or any other entity having assets in excess of fifty million dollars ($50,000,000), whose mortgage loans are subject to regulation of a federal or state agency.
Itemized Cost Breakdown Schedule. "Itemized Cost Breakdown Schedule" means the schedule set out in 28 RCNY § 5-08.
Landmark. "Landmark" means an improvement which has been designated as a landmark by the Landmarks Preservation Commission of the City or which is within the boundaries of a historic district designated by the Landmarks Preservation Commission of the City.
Limited Profit Housing Company. "Limited Profit Housing Company" means a limited profit housing company organized pursuant to Article II of the Private Housing Finance Law.
Major capital improvement or MCI. "Major capital improvement" or "MCI" means only those items of work designated as major capital improvements (MCI's) and set forth, preceded by an asterisk, in 28 RCNY § 5-08.
Minimum tax zone. "Minimum tax zone" means the area within the Borough of Manhattan in which tax abatement benefits are limited as set forth in 28 RCNY § 5-06(e)(2).
Moderate rehabilitation. "Moderate rehabilitation" means a scope of work in a substantially occupied Class A multiple dwelling which includes a major capital improvement in not less than one of the five categories set forth in 28 RCNY § 5-03(a)(6), and in which the certified reasonable cost, calculated as set forth in 28 RCNY § 5-03(a)(6), equals or exceeds $2,500 (two thousand five hundred dollars) per dwelling unit, and meets the notice and filing requirements set forth in 28 RCNY § 5-03(h)(1).
Mutual company. "Mutual company" shall have the same meaning as set forth in section two of the Private Housing Finance Law.
Mutual Redevelopment Company. "Mutual Redevelopment Company" means a Redevelopment Company that is a corporation operating exclusively for the benefit of the persons or families who are entitled to occupancy in a project of such Redevelopment company by reason of ownership of shares in such Redevelopment Company.
Non-targeted Area. "Non-targeted Area" means a geographic area in the city of New York that is not located in a Targeted Area.
Offering Plan. "Offering Plan" means an offering statement or plan with respect to a Condominium or Cooperative as required by § 352-e of the General Business Law.
Office. "Office" means the Office of Tax Incentive Programs of HPD, or any successor thereto authorized to administer this chapter.
Ordinary repairs. "Ordinary repairs" means those items of work listed in the Itemized Cost Schedule as ordinary repairs, i.e., those items not preceded by an asterisk.
Permanent Certificate of Occupancy. "Permanent Certificate of Occupancy" means a permanent certificate of occupancy that is issued by the Department of Buildings with respect to a Class A Multiple Dwelling for all dwelling units contained therein.
Permanent residential use. "Permanent residential use" shall mean the lease of all residential units for residential purposes as set forth in 28 RCNY § 5-03(f)(4).
Private dwelling. "Private dwelling" means any building or structure which is either:
(1) exclusively designed and occupied for residential purposes by not more than two families or
(2) for which the Department of Buildings has issued a Certificate of Occupancy which describes the building as intended exclusively for not more than two families. Private dwelling shall also be deemed to include a series of one or two-family dwelling units each of which faces or is accessible to a legal street or public thoroughfare, if each dwelling unit is equipped as a separate dwelling unit with all essential services, and if each such unit is arranged so that it may be approved as a legal one-family or two-family dwelling.
Private Housing Finance Law. "Private Housing Finance Law" means the Private Housing Finance Law of the State of New York.
Reasonable cost. "Reasonable cost" means the cost of a conversion, alteration or an improvement as conclusively determined and certified by the Office pursuant to this chapter.
Redevelopment Company. "Redevelopment Company" means a company organized pursuant to Article V of the Private Housing Finance Law.
Rehabilitation schedule. "Rehabilitation schedule" means the Itemized Cost Breakdown Schedule.
Rules. "Rules" means this chapter of the Rules of the City of New York.
Single room occupancy. "Single room occupancy" means occupancy in a multiple dwelling by one or more persons of a room or rooms without a private kitchen or kitchenette or a private bathroom or separate means of egress for occupants thereof to the public areas of the multiple dwelling.
Substantial governmental assistance. "Substantial governmental assistance" shall mean a project carried out with grants, loans or subsidies from any federal, state or local agency or instrumentality, including, without limitation, financing or insurance provided by the State of New York Mortgage Agency and New York City Residential Mortgage Insurance Corporation, but shall not include (1) taxable bonds issued by a federal, state, or local agency or instrumentality, (2) purchase money mortgages from a federal, state or local agency or instrumentality, or (3) any grant, loan or subsidy from a federal, state or local agency or instrumentality which does not specifically require a program of affordable housing (e.g., energy conservation grants). In the discretion of the Office, a below market sale by a Federal, state or local agency or instrumentality or a written agreement with a Federal, state or local agency or instrumentality for development of affordable housing shall qualify as a subsidy.
Substantial interest. "Substantial interest" as used in 28 RCNY § 5-03(h)(2) shall mean ownership of an interest of ten percent (10%) or more in a property or entity owning property or sponsoring a conversion, alteration or improvement.
Substantial rehabilitation. "Substantial rehabilitation" means any rehabilitation of a Class A multiple dwelling where the scope of work includes at least four of the systems listed in 28 RCNY § 5-03(a)(6)(i), or where, for City-owned buildings or buildings conveyed by deed from the Commissioner of Finance eligible for benefits under 28 RCNY § 5-03(a)(9), the scope of work includes rehabilitation work in at least four major systems in elevator buildings or three major systems in non-elevator buildings, and where major systems include heating, plumbing, electricity, elevator, windows and roof (replacement or covering with a new roof of at least seventy-five percent (75%) of the aggregate roof area), provided further that work done during City ownership or work financed by a City program but not eligible for benefits because outside of the required time limits, may be counted toward the required systems if the work was done and the system has a substantial remaining useful life at the time of application as evidenced by a certification by the Commissioner which may be based on such information as permits, sign-offs, disposition of funds statements, inspections or other program records.
Substantially occupied. "Substantially occupied" shall mean that at least sixty percent (60%) of the units in a building are occupied by permanent residential tenants immediately prior to the start of rehabilitation, during the entire period of rehabilitation (except for temporary periods of relocation in substantially governmentally assisted projects) and immediately subsequent to completion of construction of the rehabilitation.
Successor in interest. "Successor in interest" shall mean an institutional lender which originates or acquires an interest in a loan to finance alterations, improvements or a conversion eligible for benefits under this chapter and which acquires title to the alterations, improvements or conversion as result of the original owner's default on such loan, whether by mortgage foreclosure or deed in lieu of foreclosure.
Supervising agency. "Supervising agency" shall have the same meaning as set forth in section two of the Private Housing Finance Law.
Targeted Area. "Targeted Area" means a geographic area in the city of New York in the ZIP code listed below that has been determined by the department of health and mental hygiene to have high rates of children with environmental intervention blood lead levels:
Borough | ZIP Code | Neighborhood Name |
Borough | ZIP Code | Neighborhood Name |
Bronx | 10458 | Belmont-Fordham-Bedford Park |
Bronx | 10468 | University Heights-Kingsbridge |
Brooklyn | 11205 | Fort Greene-Clinton Hill |
Brooklyn | 11206 | Williamsburg-Bedford Stuyvesant |
Brooklyn | 11216 | Bedford Stuyvesant |
Brooklyn | 11217 | Park Slope-Boerum Hill |
Brooklyn | 11218 | Kensington-Windsor Terrace |
Brooklyn | 11221 | Bushwick-Bedford Stuyvesant |
Brooklyn | 11222 | Greenpoint |
Brooklyn | 11225 | Crown Heights-Prospect Lefferts |
Brooklyn | 11226 | Flatbush |
Brooklyn | 11230 | Midwood |
Brooklyn | 11233 | Stuyvesant Heights-Ocean Hill |
Brooklyn | 11235 | Sheepshead Bay-Brighton Beach |
Brooklyn | 11237 | Bushwick |
Brooklyn | 11238 | Prospect Heights |
Manhattan | 10026 | South Central Harlem |
Manhattan | 10027 | Manhattanville-Harlem |
Manhattan | 10031 | Hamilton Heights |
Manhattan | 10032 | South Washington Heights |
Manhattan | 10033 | Middle Washington Heights |
Queens | 11102 | Old Astoria |
Queens | 11385 | Ridgewood-Glendale |
Tax abatement exclusion zone. "Tax abatement exclusion zone" means the area within the Borough of Manhattan in which tax abatement benefits are limited as set forth in 28 RCNY § 5-06(e)(3).
Temporary Certificate of Occupancy. "Temporary Certificate of Occupancy" means a temporary certificate of occupancy that is issued by the Department of Buildings with respect to a Class A multiple dwelling for all dwelling units contained therein.
Zoning Resolution. "Zoning Resolution" means the Zoning Resolution of the City, as amended.
(1) Conversion of any building or structure classified as a Class B multiple dwelling or a Class A multiple dwelling used for single room occupancy into a Class A multiple dwelling, but only if the conversion is carried out with substantial governmental assistance.
(2) Conversion of residential units covered by Article 7-C of the Multiple Dwelling Law in buildings classified as interim multiple dwellings pursuant to such article and registered with the New York City Loft Board to units which are in compliance with the standards of safety and fire protection set forth in Article 7-B of the Multiple Dwelling Law or to units which have a Certificate of Occupancy as part of a Class A multiple dwelling. Provided, that if only a portion of a building is eligible as an interim multiple dwelling, benefits shall be pro-rated between such portion and the remaining part of the building.
(3) Conversion permitted as of right by the Zoning Resolution of any non-residential Building or structure situated in the borough of Manhattan into a Class A Multiple Dwelling, provided that the Conversion was completed prior to December 31, 2011.
(4) Conversion permitted as of right by the Zoning Resolution of any non-residential Building or structure situated in the boroughs of the Bronx, Brooklyn, Queens or Staten Island into a Class A Multiple Dwelling, provided that the Conversion was completed prior to December 31, 2011.
(5) Alterations or improvements to the exterior of a building visible from a public street, provided the alterations or improvements are made pursuant to a Permit for Minor Work, Certificate of Appropriateness, or Certificate of No Effect issued by the Landmarks Preservation Commission with respect to a landmark and the building or structure is otherwise eligible and either an existing dwelling or a building other than a private dwelling, which is being converted into a Class A multiple dwelling. Such alterations are eligible for the full amount spent on the required work whether or not the work qualifies as an MCI, provided, however, that each item of work must appear on the Itemized Cost Breakdown Schedule as set forth in 28 RCNY § 5-08.
(6) Alterations or improvements constituting a moderate rehabilitation of a substantially occupied Class A multiple dwelling, provided the project meets all the conditions set forth below:
(i) The scope of work must includes a major capital improvement in not less than one of the following five categories designated below:
(A) Elevators:
(a) Replacement of existing unit in its entirety;
(b) Replacement of traction machine;
(c) Replacement of one or two-speed controller; or
(d) Conversion of manual to automatic.
(B) Heating:
(a) Boiler and/or burner replacement; or
(b) Piping, heat, mains, risers, branches in all dwelling units.
(C) Plumbing:
(a) Piping (gas), risers and branches in all dwelling units;
(b) Piping (waste and vent), mains, risers branches in all dwelling units;
(c) Piping (water-main and risers), mains, risers, branches in all dwelling units; or
(d) Sprinklers, in entire building.
(D) Wiring:
(a) Adequate in all dwelling units; or
(b) New in all dwelling units.
(E) Window and trim replacement: provided that all the windows are replaced in at least ninety percent (90%) of all residential units; and
(ii) The scope of work must have an average certified reasonable cost of not less than two thousand five hundred dollars ($2,500) for each dwelling unit in existence at the commencement of construction of the rehabilitation, comprised exclusively of major capital improvements, exclusive of any certified reasonable cost for ordinary repairs.
(iii) For the purpose of moderate rehabilitation, a Class A multiple dwelling is substantially occupied if at least sixty percent (60%) of the units are occupied by permanent residential tenants immediately prior to the start of rehabilitation, during the entire period of rehabilitation (except, in substantially governmentally assisted projects, for temporary periods of relocation pursuant to a governmentally supervised plan of temporary relocation) and immediately subsequent to completion of construction of the rehabilitation.
(7) Alterations or improvements to an existing dwelling; provided that such items of work are set forth in 28 RCNY § 5-08 and are necessary to eliminate presently existing unhealthy or dangerous conditions or to replace inadequate and obsolete sanitary facilities, including asbestos abatement to the extent required by any federal, state or local law.
(8) Alterations or improvements designated as energy conservation items in 28 RCNY § 5-08. In order to be eligible pursuant to this paragraph the building being altered or improved must be an existing dwelling.
(9) Alterations or improvements commenced on or after September 1, 1987 constituting a substantial rehabilitation of a Class A multiple dwelling or a conversion of a building or structure into a Class A multiple dwelling as part of a program to provide housing for low and moderate income households, provided that:
(i) such alterations or improvements or conversions shall be aided by a grant, loan or subsidy from any federal, state or local agency or instrumentality. For purposes of this paragraph, the term "low and moderate income households" shall mean households having an annual household income no greater than one hundred sixty-five percent (165%) of area median income for the Metropolitan Statistical Area as determined by HUD. Notwithstanding the foregoing sentence, HPD shall grant benefits to a building if no more than eighty percent (80%) of units are rented to households having an annual household income no greater than one hundred eighty percent (180%) of such area median income, provided at least twenty percent (20%) of the units in such building are rented to households with an annual household income no greater than eighty percent (80%) of such area median income.
(ii) [Reserved.]
(10) Conversion of a property classified under the zoning resolution as a non-profit institution with sleeping accommodations into a Class A multiple dwelling, but only if such conversion is carried out with substantial governmental assistance.
(11) Alterations or improvements to any private dwelling, or conversion of any private dwelling to a Class A multiple dwelling, or conversion of any multiple dwelling to a private dwelling, provided that in each instance the alterations, improvements or conversion are carried out with substantial governmental assistance.
(b) Eligible items of work: major capital improvements.
(1) Items of work designated as major capital improvements in the itemized cost breakdown schedule contained in 28 RCNY § 5-08 shall be eligible for tax benefits. Except for purposes of 28 RCNY § 5-03(c)(1)(iii), any item of work set forth in 28 RCNY § 5-08 shall also be considered a major capital improvement if done pursuant to an Alteration Type-I Permit issued by the Department of Buildings or if it is part of the scope of work of a moderate rehabilitation.
(2) An existing dwelling shall not be eligible to receive tax abatement or tax exemption for any item of work designated as a major capital improvement if it is receiving tax abatement or tax exemption for the same or a similar major capital improvement at the time of application for tax benefits, except as provided in 28 RCNY § 5-04(b)(4).
(c) Eligible items of work: ordinary repairs.
(1) Ordinary repairs are those items of work listed in the Itemized Cost Breakdown Schedule which are not preceded by an asterisk. The replacement of any component part of any item of work listed in 28 RCNY § 5-08 is also an ordinary repair. Ordinary repairs are not eligible for tax abatement unless they are:
(i) Made to a common area; and are
(A) Certified to have been started and completed within a twelve month period by an affidavit:
(a) of a registered architect or a licensed professional engineer; or
(b) by the applicant. Certification by the applicant must be substantiated to the satisfaction of the Office by cancelled checks or such other proof of payment as the Office shall require, contractors' affidavits and/or such other information as may be required by the Office to substantiate such completion of construction; and
(B) Made concurrently with a major capital improvement to such common area which requires a permit by the Department of Buildings. Ordinary repairs are made concurrently with a major capital improvement if they are started no earlier than sixty days before and no later than sixty days after the issuance of a building permit for the major capital improvement; or
(ii) Done pursuant to an Alteration Type-I Permit issued by the Department of Buildings; or
(iii) Done as part of a moderate rehabilitation pursuant to 28 RCNY § 5-03(a)(6) provided, however, that only major capital improvements shall be counted to meet the requirement of 28 RCNY § 5-03(a)(6)(ii) that the CRC for a moderate rehabilitation must equal or exceed an average of two thousand five hundred dollars ($2,500) per dwelling unit; or
(iv) In the case of projects described in 28 RCNY § 5-03(a)(9), done pursuant to an Alteration Type-II Permit.
(2) The certified reasonable cost for ordinary repairs may not exceed twice the amount actually expended on the designated concurrent major capital improvement, exclusive of any such ordinary repairs.
(3) An existing dwelling is not eligible to receive tax abatement for any item of work designated as an ordinary repair if the existing dwelling was receiving tax abatement for ordinary repairs pursuant to the Act as of the December thirty-first of the calendar year preceding the date of the application to the Office, unless the ordinary repair independently qualifies under this subdivision (c) as eligible for tax benefits. Tax abatement may not be received for repairs to any item for which benefits of tax abatement are already being received.
(d) Time Requirements.
(1) In order to receive tax benefits pursuant to the Act, eligible projects, except for conversions described in 28 RCNY § 5-03(a)(2), must be completed as follows:
(A) for eligible projects that are completed prior to December 31, 2011, within thirty-six months following the Commencement of Construction;
(B) for eligible projects that are completed on or after December 31, 2011, within thirty months following the Commencement of Construction; or
(C) for eligible projects carried out with Substantial Governmental Assistance or Alterations or Improvements undertaken by an HDFC which are carried out in a property transferred from the City if such Alterations or Improvements are completed within eighty-four months after the date of transfer, within sixty months following the Commencement of Construction. Notwithstanding the foregoing, all such Conversions, Alterations or Improvements must be completed prior to June 30, 2015.
(2) In a project with multiple Buildings, if all Buildings are not completed prior to December 31, 2011 and within the thirty-six month period following Commencement of Construction, or on or after December 31, 2011 and within the thirty-month period following Commencement of Construction, as applicable, applications for benefits may be filed for separate Buildings or separate groups of Buildings which are on the same tax block and lot and are completed within the applicable time period, provided that separate Building Permits are in effect for each such filing.
(2-a) For a project with multiple Buildings eligible for the sixty-month completion period established pursuant to subparagraph (C) of paragraph one of this subdivision in which all of the Buildings in such project are not completed within such period, separate applications for benefits may be filed either for: (A) different items of governmentally-assisted work completed within such sixty-month period, or (B) benefits for separate Buildings or separate groups of Buildings that are on the same tax block and lot and are completed within such sixty-month period, provided that separate Building Permits are in effect for each such filing.
(3) In order to receive the tax benefits pursuant to the Act, an application for a Certificate of Eligibility and Reasonable Cost must be filed with the Office after the Completion of Construction and (A) for Conversions, Alterations or Improvements completed before December 31, 2011, not later than forty-eight months following the Commencement of Construction, (B) for Conversions, Alterations or Improvements completed on or after December 31, 2011, not later than thirty-six months following the Commencement of Construction, or (C) for applications for benefits pursuant to 28 RCNY § 5-03(a)(2), not later than twelve months following the Completion of Construction.
(4) At the discretion of the Commissioner, the time to file an application for a Certificate of Eligibility and Reasonable Cost may be extended to not later than seventy-two months following the Commencement of Construction for any project that is carried out with Substantial Governmental Assistance.
(5) An application for a Certificate of Eligibility and Reasonable Cost must contain all documentation required by 28 RCNY § 5-05 and be completed and filed with the Office as follows:
(A) for Conversions, Alterations or Improvements that are completed before December 31, 2011, within twenty-four months of the initial filing date with the Office;
(B) for Conversions, Alterations or Improvements that are completed on or after December 31, 2011, within twelve months of the initial filing date with the Office; or
(C) for projects carried out with Substantial Governmental Assistance that have received a Temporary Certificate of Eligibility and Reasonable Cost, within one year of the Completion of Construction. If the application is not completed in accordance with subparagraphs (A) - (C) of this paragraph five, it shall be deemed withdrawn at the end of the tax quarter in which the application completion deadline set forth above falls, and no tax benefits shall be authorized for the Conversion, Alterations or Improvements made thereunder. The applicant is referred to 28 RCNY § 5-05 for detailed filing requirements. Applicants must notify the Office of any change of address and/or change of ownership of the property, and any change in the designated filing agent.
(6) Notwithstanding the provisions contained in paragraph five of this subdivision, if the applicant is a Limited Profit Housing Company that owns and operates a planned unit development consisting of at least fifteen thousand (15,000) dwelling units, an application for a Certificate of Eligibility and Reasonable Cost must contain all documentation required by 28 RCNY § 5-05 and be completed and filed with the Office within twenty-four months of the initial filing date with the Office. If such application is not so completed and filed with the Office within twenty-four months of the initial filing date, the application shall be deemed withdrawn at the end of the tax quarter in which the twenty-fourth (24th) month falls, and no tax benefits shall be authorized for the Conversion, Alterations or Improvements made thereunder.
(e) Construction and maintenance requirements.
(1) In order to be eligible for tax benefits a building must be structurally sound and must comply with applicable laws including, but not limited to, the Building Code, the Multiple Dwelling Law, the Housing Maintenance Code and the Zoning Resolution.
(2) The following subparagraphs set forth the minimum number of bedrooms required by the Act.
(i) Buildings converted to Class A multiple dwellings, buildings where the configuration has been altered to increase the number of units, and existing dwellings which have been substantially rehabilitated must contain bedrooms in a number equal to seventy-five (75%) percent of the dwelling units contained therein in order to be eligible to receive tax benefits.
(ii) The bedroom count requirement set forth in subparagraph (i) above is not applicable to non-residential buildings or structures converted to Class A multiple dwellings when the resulting dwelling units therein contained an average floor area of one thousand square feet or more.
(iii) A substantial rehabilitation of an existing dwelling shall be exempt from the provisions of this paragraph (2) in the event that (A) the number of dwelling units in such existing dwelling is not thereby increased and (B) the number of bedrooms in such existing dwelling is not thereby reduced.
(iv) For purposes of the bedroom count requirement set forth in subparagraphs (i) and (ii) above, dwelling units which contain a combined living/dining/kitchen space in excess of three hundred and twenty-five square feet may be deemed to include both a kitchen and living room, so that any additional rooms may be considered bedrooms, under subparagraphs (i) and (ii) above.
(3) No building shall be eligible to receive benefits pursuant to the Act unless all of the dwelling units contained therein are Class A dwelling units as defined in § 4 of the Multiple Dwelling Law, and have complete sanitary facilities and a complete kitchen or kitchenette for the exclusive use of the person or family residing in such unit, provided, however, if a building contains both Class A and Class B units, benefits may be pro-rated as set forth in 28 RCNY §5-03(f)(4). Class B units may be eligible to apply to the Office for tax benefits pursuant to § 11-244 of the Administrative Code.
(f) Rent regulatory requirements.
(1) Rent regulation generally mandatory. In order to be eligible to receive tax benefits under the Act and for at least so long as a building is receiving the benefits of the Act, except for dwelling units which are exempt from such requirement pursuant to paragraph (2) below, all dwelling units in buildings or structures converted, altered or improved shall be subject to rent regulation pursuant to:
(i) the City Rent and Rehabilitation Law (§§ 26-401 et seq. of the Administrative Code); or
(ii) the Rent Stabilization Law of 1969 (§§ 26-501 et seq. of the Administrative Code); or
(iii) the Private Housing Finance Law; or
(iv) any federal law providing for rent supervision or regulation by HUD or any other federal agency; or
(v) the Emergency Tenant Protection Act of 1974.
(2) Exemption from rent regulation.
(i) Notwithstanding paragraph (1) above, dwelling units in multiple dwellings which are owned as cooperatives or condominiums and which are not regulated pursuant to any of such laws shall not be required to be subject to rent regulation.
(ii) Newly created dwelling units in a building for which a prospectus for condominium or cooperative formation has been submitted to the Attorney General at the time of application for benefits to the Office shall not be required to registered with DHCR, unless a plan of cooperative or condominium ownership has not been declared effective within fifteen (15) months of the date of the acceptance for filing of the plan of cooperative or condominium ownership with the Attorney General.
(3) Deregulation of units.
(i) With respect to a dwelling unit in any building receiving benefits under the Act,
(A) such unit shall remain subject to rent regulation until the occurrence of the first vacancy after tax benefits are no longer being received for the building at which time the unit shall be deregulated, unless the unit is otherwise subject to rent regulation; or
(B) if each lease and renewal thereof for such unit for the tenant in residence at the time of the expiration of the tax benefits has included a notice in at least twelve point type informing such tenant that the unit shall become subject to deregulation upon the expiration of the tax benefits and stating the approximate date on which tax benefits are to expire, such dwelling unit shall be deregulated after tax benefits are no longer being received for the building, unless the unit is otherwise subject to rent regulation.
(ii) As provided in 28 RCNY § 39-03, rent regulation shall not be terminated by the waiver or revocation of tax benefits.
(iii) Rent regulation of dwelling units shall not be exempted or terminated other than as set forth in this subdivision (f) as long as benefits are in force.
(4) Permanent residential use. All dwelling units must be leased for permanent residential purposes for a term of not less than one year so long as tax benefits are in effect. Permanent residential use shall not include use as a hotel, dormitory, employee residence or facility, fraternity or sorority house, resort housing or any similar type of non-permanent housing. For purposes of this chapter, a "hotel" shall mean (i) any Class B multiple dwelling, as such term is defined in the Multiple Dwelling Law, (ii) any structure or part thereof containing living or sleeping accommodations which is used or intended to be used for transient occupancy, (iii) any apartment hotel or transient hotel as defined in the Zoning Resolution, or (iv) any structure or part thereof which is used to provide short term rentals or owned or leased by an entity engaged in the business of providing short term rentals. For purposes of this definition, a lease, sublease, license or any other form of rental agreement for a period of less than six months shall be deemed to be a short term rental. Notwithstanding the foregoing, (i) a structure or part thereof owned or leased by a not-for-profit corporation for the purpose of providing governmentally funded emergency housing shall not be considered a hotel for purposes of this chapter, and (ii) benefits may be pro-rated by deducting out work attributable to Class B units in a building containing both Class A and Class B units, provided that all units in a building are registered with DHCR as rent stabilized or rent controlled units, and are utilized for permanent residential use.
(5) Escalation clauses in leases. Except for the notice referred to in subparagraph (i)(B) above, no lease for dwelling units which are registered with DHCR shall contain escalation clauses for real estate taxes or any other provisions for increasing the rent set forth in the lease, other than permitting an increase in rent pursuant to an order of DHCR or the Rent Guidelines Board.
(6) Partial waiver of rent adjustments attributable to major capital improvements.
(i) As a requirement for claiming or receiving any tax abatement attributable to a major capital improvement, the owner of the property shall file with the Office, on the date any application for benefits is made, a declaration stating that in consideration of any tax abatement benefits which may be received pursuant to such application for alterations or improvements constituting a major capital improvement, such owner agrees to waive the collection of a portion of the total annual amount of any rent adjustment attributable to such major capital improvement which may be granted by DHCR pursuant to the rent stabilization code equal to one-half of the total annual amount of the tax abatement benefits which the property receives pursuant to such application with respect to such alterations or improvements. For example, an owner receiving a total rent adjustment over eighty-four months equal to $100,000 for a major capital improvement along with tax abatement of $100,000 for the same improvement would waive collection of $50,000 during such period. Such waiver shall commence on the date of the first collection of such rent adjustment, provided that, in the event that such tax abatement benefits were received prior to such first collection, the amount waived shall be increased to account for such tax abatement benefits so received. The entire amount shall be applied against the first annual rent adjustment, including any retroactive rent adjustments which may be granted by the applicable DHCR order, unless the amount exceeds such adjustments, in which event the excess shall be carried forward. The calculation of the amount attributable to the waiver shall be against the total rent adjustment for the eighty-four month period prior to the application of any annual percentage limitation applied by DHCR to defer collection of the total rent adjustment. In calculating rental adjustments pursuant to Rent Guidelines Board orders the amount of the waived rent shall not be included in the base rent. Following the expiration of a tax abatement for alterations or improvements constituting a major capital improvement for which a rent adjustment has been granted by DHCR, the owner may collect the full amount of annual rent permitted pursuant to such rent adjustment. A copy of such declaration shall be filed simultaneously with DHCR. Such declaration shall be binding upon such owner, and his or her successors and assigns.
(ii) The provisions of subparagraph (i) shall not apply to substantial rehabilitation of buildings vacant when alterations or improvements are commenced or to buildings rehabilitated with substantial governmental assistance.
(g) Eligibility rules for Cooperatives and Condominiums.
(1) Buildings owned as Cooperatives or Condominiums are eligible for tax exemption pursuant to the Act, provided that the work is eligible pursuant to 28 RCNY § 5-03(a).
(2) Eligibility for tax abatement is limited to: (i) Alterations or Improvements completed prior to or within thirty-six months following the date (a) of the first closing of a Condominium unit to a bona fide purchaser or (b) on which the first shares allocable to a Cooperative unit are conveyed to a bona fide purchaser, or
(ii) Any Cooperative or Condominium in which dwelling units have been newly created by the Substantial Rehabilitation of a vacant Building or the Conversion of a non-residential Building if such Conversion is completed prior to December 31, 2011, or
(iii) [Reserved.]
(iv) Alterations or Improvements in any Cooperative or Condominium for work completed prior to December 31, 2011 which meets the following requirements:
(A) the Actual Assessed Value of such Cooperative or Condominium shall not exceed an average of forty thousand dollars ($40,000) per dwelling unit at the time of the Commencement of Construction, and
(B) during the three years immediately preceding the Commencement of Construction, the average per room sale price of the dwelling units or the stock allocated to such dwelling units shall have been no greater than thirty-five percent (35%) of the maximum mortgage amount for a single family home eligible for purchase by Fannie Mae, provided that if an amount less than ten percent (10%) of the dwelling units or an amount of stock less than the amount allocable to ten percent (10%) of such dwelling units has not been transferred during such preceding three year period, then eligibility for benefits shall be conditioned upon the Cooperative or Condominium having an Actual Assessed Value per dwelling unit of no more than forty thousand dollars ($40,000) at the time of the Commencement of Construction.
(C) [Reserved.]
(D) The maximum amount of tax abatement which may be applied against taxes due in any tax year by any cooperative or condominium claiming benefits under this 28 RCNY § 5-03(g)(2)(iv) shall be limited to two thousand five hundred dollars ($2,500) per dwelling unit.
(E) Notwithstanding anything to the contrary contained in this subparagraph (iv), the availability of any benefits pursuant to the Act to any multiple dwelling, Building or structure owned and operated by a Limited Profit Housing Company or a Redevelopment Company shall not be conditioned upon the Actual Assessed Value of such multiple dwelling, Building or structure, including land, as calculated as an average dollar amount per dwelling unit, at the time of Commencement of Construction, provided, that such Limited Profit Housing Company or Redevelopment Company (1) is organized and operating as a Mutual Company or a Mutual Redevelopment Company, respectively, (2) continues to be organized and operated as a Mutual Company or a Mutual Redevelopment Company, respectively, and to own and operate the multiple dwelling, Building or structure receiving such benefits, and (3) has entered into a binding and irrevocable agreement with the commissioner of housing of the state of New York, the Supervising Agency, the New York city housing development corporation, or the New York state housing finance agency prohibiting, respectively, either (A) the dissolution or reconstitution of such Limited Profit Housing Company pursuant to section thirty-five of the Private Housing Finance Law for not less than fifteen years from the date of commencement of such benefits, or (B) the dissolution or reconstitution of such Redevelopment Company pursuant to section one hundred twenty-three of the Private Housing Finance Law until the earlier to occur of fifteen years from the date of commencement of such benefits, or the expiration of any tax exemption granted to such Redevelopment Company pursuant to section one hundred twenty-five of the Private Housing Finance Law.
(v) For purposes of determining the number of rooms in applying the limitations contained in 28 RCNY § 5-03(g)(2)(iv), the number of zoning rooms shall be used unless there is no filing with the Department of Buildings indicating the number of zoning rooms, in which case the number shall be:
(A) the number of rooms as evidenced in the Offering Plan, or
(B) at the discretion of the Office, the number of rooms as certified by a licensed architect.
(vi) Where the Building is occupied in part for residential purposes and in part for non-residential purposes, the Actual Assessed Value of the property shall be allocated by the Office between the residential and the non-residential portions based on pro rata Floor Area, unless the non-residential portion is on a separately assessed tax lot, in which case only the amount of Actual Assessed Value allocated to the residential portion shall be considered in computing the Actual Assessed Value per dwelling unit for purposes of 28 RCNY § 5-03(g)(2)(iv).
(h) Special requirements for moderate rehabilitation and special non-harassment provisions.
(1) Special requirements for moderate rehabilitation.
(i) In order to be eligible for tax benefits pursuant to 28 RCNY § 5-03(a)(6), an applicant must:
(A) Not more than one hundred eighty days nor less than thirty days prior to the commencement of construction of rehabilitation, complete form MR-1 (notice to tenants) and send it by registered or certified mail, return receipt requested, to all tenants residing in the building to be rehabilitated and post a copy conspicuously in the building lobby; and
(B) Complete form MR-2 (affidavit that MR-1 was mailed) and file it with the Office not less than thirty days prior to the start of rehabilitation.
(ii) If more than one hundred eighty days elapse between the date Form MR-1 is mailed to any tenant and the date rehabilitation actually commences, new Forms MR-1 and MR-2 must be completed and mailed and posted and filed as required by subparagraphs (i) and (ii) of this paragraph (1) provided that, in the case of a loan program supervised by HPD, notice to HPD shall be unnecessary, and further provided that HPD may itself provide the required notice to tenants prior to commencement of construction in lieu of the MR-1 written notice and MR-2 affidavit.
(iii) In the discretion of the Office, in lieu of the requirements established by subparagraphs (i) and (ii) of this paragraph (1), the applicant may establish by proof satisfactory to the Office that it has provided notice to HPD and to the tenants residing in the building to be rehabilitated of (A) the proposed work prior to commencement of such work, (B) the identity of the owner's representative, and (C) the tenants' rights under applicable law with respect to such work.
(2) Special non-harassment provisions. In order to be eligible for any tax exemption pursuant to the Act, irrespective of the cost of the conversion, alteration or improvement, or to be eligible for tax abatement when the CRC per dwelling unit exceeds seven thousand five hundred dollars ($7,500) (including the cost of any conversion, alteration or improvement for which an abatement was approved within four years prior to commencement of construction of the contemplated project), the owner of the property shall file with the Office, not less than thirty days before the commencement of construction of the conversion, alteration or improvement (the "cut-off date"), an affidavit, or, at the time of application, a late filing affidavit or, where any information referred to in 28 RCNY § 5-03(h)(2)(i) below changes prior to applying for or claiming any benefit under this subdivision (h), an amended affidavit, setting forth the following information:
(i) every owner or record and owner of a substantial interest in the property or entity owning the property or sponsoring the conversion, alteration or improvement;
(ii) a statement that none of such persons had, within the five years prior to the cut-off date, been found to have harassed or unlawfully evicted tenants by judgment or determination of a court or agency (including a non-governmental agency having appropriate legal jurisdiction) under the penal law, any state or local law regulating rents or any state or local law relating to harassment of tenants or unlawful eviction; and
(iii) any change in the information required to be set forth.
(3) No conversion, alteration or improvement subject to paragraph (2) of this subdivision (h) shall be eligible for tax exemption or tax abatement under the Act where:
(i) any affidavit required under paragraph (2) has not been filed; or
(ii) any such affidavit contains a willful misrepresentation or omission of any material fact; or
(iii) any person referred to in 28 RCNY § 5-03(h)(2)(i) has been found to have harassed or unlawfully evicted tenants until and unless the finding is reversed on appeal, provided that any such finding after the cut-off date shall not apply to or affect any tax abatement or exemption for the conversion, alteration or improvement covered by the affidavit.
(a) Ineligible projects. The tax benefits of the Act are not available to:
(1) Any tax lot which is receiving tax exemption or tax abatement under any other provision of state or local law for rehabilitation or new construction, including but not limited to § 420-c, § 421-a, § 421-b, § 421-g, and § 488-a of the Real Property Tax Law, but not including the provisions of the Private Housing Finance Law as of the date that the Certificate of Eligibility is issued.
(2) Any building for which real estate taxes, water or sewer charges, payments in lieu of taxes, emergency repair or relocation liens are due and owing or not satisfied of record as of the last day of the tax quarter preceding the submission date of the Certificate of Eligibility to the Department of Finance, provided that a property rehabilitated by a loan pursuant to Article 8 or Article 15 of the Private Housing Finance Law shall not be ineligible pursuant to this section if there are no real estate taxes or water and sewer charges due and owing as of the last day of a tax quarter preceding commencement of construction of such rehabilitation. The benefits of tax exemption and tax abatement shall not be denied to any property pursuant to this section on account of unpaid real estate taxes, water or sewer charges provided the applicant or his predecessor in title has entered into an installment agreement with the City pursuant to §§ 11-401 et seq. of the Administrative Code and all payments required by said installment agreement have been paid when due.
(3) Any multiple dwelling which results from the conversion of a private dwelling except as provided in 28 RCNY § 5-03(a)(11).
(4) The conversion, alteration or improvement, commenced on or after July 1, 1982, of any Class B multiple dwelling or Class A multiple dwelling used in whole or in part for single room occupancy regardless of the status or use of the building after the conversion, alteration or improvement, unless such conversion, alteration or improvement is carried out with substantial governmental assistance.
(5) Any property for which the improvement is assessed at one thousand dollars ($1,000) or less at the commencement of construction of alterations, improvements or conversion, provided that such assessed valuation test shall not apply if the alterations, improvements or conversion is carried out with substantial governmental assistance.
(6) Any building or structure that results from new construction as distinguished from rehabilitation, alterations, improvements or conversion, as evidenced by issuance of a building permit for new construction. In order for a building to be characterized as rehabilitated, altered, improved or converted, one of the following conditions must be met before, during and after construction:
(i) At least seventy-five percent (75%) of the total area of the original perimeter walls, but in any event at least fifty percent (50%) of the total area of the original non-party perimeter walls, must remain in place as perimeter walls in the building for which benefits are claimed; or
(ii) At least eighty percent (80%) of the original structural floor area of the building must remain in place as structural floor in the building for which benefits are claimed.
(7) The conversion of any building, or portion thereof.
(i) which is located within any district in the County of New York where a floor area ratio, as that term is defined in the Zoning Resolution, of fifteen or greater is permitted by said resolution, or
(ii) located in the City where residential conversion as-of-right is not permitted by said resolution, unless construction actually commenced in the County of New York prior to January 1, 1982, or in the Counties of Kings, Queens, Richmond or the Bronx prior to October 1, 1983, pursuant to an alteration permit, or unless the building is eligible for the benefits of the Act pursuant to 28 RCNY § 5-03(a)(2).
(8) Any conversion commenced on or after June 28, 1988 of any property classified under the Zoning Resolution as a non-profit institution with sleeping accommodations, unless such conversion is carried out with substantial governmental assistance.
(b) Ineligible items of work. The tax benefits of the Act are not available for:
(1) Alterations or improvements done in connection with the refinancing of a housing project pursuant to § 223(f) of the National Housing Act, as amended.
(2) Any portion of a building that results from new construction as distinguished from alterations or improvements or which represents an increase in the gross cubic content of a building from the gross cubic content in existence immediately prior to commencement of construction.
(3) Any portion of a building occupied by stores, professional offices, community facilities or otherwise used for commercial or non-residential purposes pursuant to the classifications set forth in the Zoning Resolution.
(4) Any item of work if a building is receiving tax abatement for the same or a similar item of work at the time of application for the benefits of the Act, provided, however, that if an item or a system which was previously repaired is replaced in its entirety while the building is still receiving the benefits of the Act for such repair, tax benefits for the replacement shall be granted only to the extent that the certified reasonable cost of the replacement exceeds the amount of the previously granted certified reasonable cost attributable to the repair.
(5) An existing dwelling is not eligible to receive tax abatement for any item of work designated as an ordinary repair if the existing dwelling was receiving tax abatement for ordinary repairs pursuant to the Act as of the December thirty-first of the calendar year preceding the date of the application to the Office, unless the ordinary repair independently qualified under 28 RCNY § 5-03(c) as eligible for tax benefits. Tax abatement may not be received for repairs to any items for which benefits of tax abatement are already being received.
(a) Application forms and filing. Prescribed forms and applications are available from the Department of Housing Preservation and Development, Office of Tax Incentive Programs, 100 Gold Street, 1st Floor, New York, New York 10038. All applications must be submitted to the Office on forms approved by the Office. Only applications complete in all detail will be considered for certification of eligibility and reasonable cost. All forms must be filled out fully and legibly by the applicant and shall be typewritten or inscribed in permanent ink. Applications and supporting documentation may only be submitted to the Office for review and approval after the completion of construction of work.
(b) Preliminary application. All applicants who intend to apply for tax exemption and tax abatement when they complete conversion, alteration or improvements must file a notice of intent form (form J-11) with the Department of Finance which describes the work for which tax benefits will be claimed, estimates the cost of the work for which tax benefits will be claimed and estimates the cost of the work which will be eligible for tax benefits. Such form must be filed not less than 45 days prior to the commencement of construction. If the scope of the work or the estimated cost changes materially, applicants must file a revised form with the Department of Finance. Applicants who fail to comply with the provisions of this subdivision (b) must pay a penalty at the time of issuance of a Certificate of Eligibility and Reasonable Cost of five hundred dollars ($500) plus an amount equal to one percent (1%) of the amount stated on the Certificate of Eligibility and Reasonable Cost in excess of ten thousand dollars ($10,000), provided that HPD may waive the penalty for projects receiving substantial governmental assistance. The penalty prescribed by this 28 RCNY § 5-05(b) is in addition to the normal filing fees prescribed in 28 RCNY § 5-05(f). Notwithstanding the foregoing, an applicant who performs an abatement of lead-based paint hazards shall not be required to file a notice of intent form (form J-11) with the Department of Finance prior to commencement of work, and no additional fee or penalty shall be due and owing HPD at the time of issuance of a certificate of eligibility and reasonable cost for failure to file such notice of intent.
(c) Documentation required of all applicants. All applicants must maintain documents relating to claimed costs as specified in 28 RCNY § 39-06(a), and all completed applications for final tax benefits must include the following documentation of the applicant's actual expenditures properly organized and collated in time sequence:
(1) Original and four copies of the application form; and
(2) one copy of the following:
(i) a report by an independent certified public accountant on the cost of the Conversion, Alterations or Improvements, in a form prescribed by the Office and in accordance with standards approved by the Office and based upon the books and records of the owner provided that the original records are retained as set forth in 28 RCNY § 5-07(e)(3) and 28 RCNY § 39-06(a) and are available for audit purposes; or
(ii) A Disposition of Funds Statement or certification by the Commissioner of the cost of the work based upon other program records where the Conversion, Alterations or Improvements are undertaken aided by a loan made pursuant to Article 8, 8-a, 11, 12, 15 or 22 of the Private Housing Finance Law or § 312 of the United States Housing Act of 1964 (42 U.S.C. § 1452b), or the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. §§ 12701 et seq.) or § 696-a or § 99(h) of the General Municipal Law, or any other City-supervised housing program, or, in the discretion of the Office, other governmentally-supervised housing program; or
(iii) In the discretion of the Office, paid bills, cancelled checks, installment agreements, and the work contract and any change orders, indicating work, location of Building, and quantity in appropriate unit of measurement all in a form corresponding to the individual items on the Itemized Cost Breakdown Schedule so that the claimed costs can be audited by HPD against the specific items and allowances contained in such schedules; or
(iv) In the case of applications for Buildings under 28 RCNY § 5-03(a)(9), a designated special application form may be submitted including the general contract (if applicable), trade payment breakdown schedule and an HPD inspection report or an HPD-approved construction monitor's certificate of completion. The Office, upon receipt of appropriate documentation, may determine that each such project has incurred eligible costs of at least twenty thousand dollars ($20,000) in CRC per unit and grant a Certificate of Eligibility and Reasonable Cost for one hundred and fifty percent (150%) of such amount, i.e., thirty thousand dollars ($30,000) in CRC per unit; and
(3) Plans and amendments, if any, approved by the Department of Buildings; and
(4) Proof of Commencement of Construction:
(i) Copy of a Building Permit; or
(ii) The Office shall require that the date of Commencement of Construction be confirmed by an affidavit of a registered architect or licensed professional engineer, together with, at the discretion of the Office, such other information as the Office may require to substantiate such date, including, but not limited to, an affidavit from the owner, a copy of the work contract, invoices, cancelled checks or such other proof of payment as the Office shall require, and a contractor's affidavit. If an application contains a series of Major Capital Improvements, the Commencement of Construction date is that of the first Major Capital Improvement for which benefits are claimed; and
(5) Proof of Completion of Construction:
(i) A Permanent Certificate of Occupancy; or
(ii) A Temporary Certificate of Occupancy for all of the dwelling units therein, and an affidavit from a registered architect or licensed professional engineer and the owner that the only work remaining to secure a Permanent Certificate of Occupancy is work to be performed or completed in space to be used exclusively for non-residential purposes; or
(iii) A sign-off by the Department of Buildings as evidenced by the J-3, a computer printout or such other official documentation as may be required by the Department of Buildings and is acceptable to the Office if issued in connection with an eligible Conversion, Alteration or Improvement; or
(iv) If none of the above are required by law, Completion of Construction must be confirmed by the submission of an affidavit of a registered architect or a licensed professional engineer, along with such other information as may be required by the Office, including, but not limited to, an affidavit from the owner, a copy of the work contract, invoices, cancelled checks or such other proof of payment as the Office shall require, Disposition of Funds Statements, certification by the Commissioner based on program records or inspection, and a contractor's affidavit which confirm such Completion of Construction date to the satisfaction of the Office.
(6) Proof of Compliance with the Housing Maintenance Code. For applications for which a Certificate of Occupancy has not been issued within one year of the date of submission of such application for all units for which benefits are claimed: If a search by the Department of Housing Preservation and Development dated no earlier than ninety days prior to the date of submission of such application indicates that there are any violations of record which are classified as hazardous or immediately hazardous, the applicant must either clear the violations of record or submit affidavits:
(i) from a registered architect, or a licensed professional engineer, certifying that the architect or engineer has inspected the premises and that work necessary to remove any hazardous or immediately hazardous violations has been completed. If a violation classified as hazardous or immediately hazardous was caused by a tenant and the tenant refuses to grant access to the applicant to correct the tenant-related violation, such violation will not preclude eligibility provided the applicant can establish these facts with clear and convincing evidence; and
(ii) from the owner, certifying that the architect or engineer has inspected the premises and that work necessary to remove any hazardous or immediately hazardous violations has been completed. If a violation classified as hazardous or immediately hazardous was caused by a tenant and the tenant refuses to grant access to the applicant to correct the tenant-related violation, such violation will not preclude eligibility provided the applicant can establish these facts with clear and convincing evidence.
(7) Applications for benefits pursuant to 28 RCNY §§ 5-03(a)(2), (3) or (4) must provide proof of compliance with the relocation requirements of § 11-243(z) of the Act.
(8) Department of Buildings Certification for Tax Exemption and Tax Abatement (Form J-3) or, if no permits from the Department of Buildings are required, at the option of the Office, alternative documentation to prove absence of Building Code violations.
(9) Proof that the building has been registered with HPD in accordance with the provisions of article two of subchapter four of the Housing Maintenance Code.
(10) (i) For applications received on or after March 19, 2006, an affidavit from the owner certifying that whenever any household appliance in any dwelling unit, or any household appliance that provides heat or hot water for any dwelling unit in the multiple dwelling, is installed or replaced with a new household appliance on or after March 19, 2006, such new appliance shall be certified as Energy Star. If applicable, such affidavit may instead certify (A) that an appropriately-sized Energy Star certified household appliance is not manufactured, such that movement of walls or fixtures would be necessary to create sufficient space for such appliance, and/or (B) that an Energy Star certified boiler or furnace of sufficient capacity is not manufactured.
(ii) For purposes of this paragraph (10), (A) "household appliance" shall mean any refrigerator, room air conditioner, dishwasher or clothes washer, within a dwelling unit in the multiple dwelling that is provided by the owner, and any boiler or furnace that provides heat or hot water for any dwelling unit in the multiple dwelling, and (B) "Energy Star" shall mean a designation from the United States Environmental Protection Agency or Department of Energy indicating that a product meets the energy efficiency standards set forth by the agency for compliance with the Energy Star program.
(d) Additional documentation for buildings owned as cooperatives or as condominiums. Buildings owned as cooperatives or condominiums must submit the following additional documentation:
(1) An opinion of counsel which states that the building is a legal cooperative or condominium and which has a prospectus accepted for filing by the Attorney General, or was formed prior to the date of prospectus was required by law, or is exempt for other reasons from the filing requirements; and
(2) If benefits are claimed under 28 RCNY § 5-03(g)(2)(i), evidence of the first sale of a condominium unit or shares of stock allocable to a cooperative unit in a form required by the Office; and
(3) A copy of the prospectus or offering plan which has been accepted for filing by the Attorney General, and all subsequent amendments which become effective prior to the time the Office issues a Certificate of Eligibility and Reasonable Cost for any cooperative or condominium eligible for tax abatement pursuant to 28 RCNY § 5-03(g).
(4) Provided, however, if benefits are being claimed under 28 RCNY § 5-03(g)(2)(iii) or (g)(2)(iv), evidence shall be submitted with respect to assessed valuation per unit and the average per room sale price during the three years preceding the application in a form prescribed by the Office.
(e) Additional documentation for certain alterations or improvements. Certain alterations and improvements require the approval of designated agencies and such additional documentation as the Office shall require. The "Schedule of Required Information, Permits and Sign-offs" set forth in 28 RCNY § 5-09 contains a list of the documentation that the Office requires for specific alterations and improvements.
(f) Filing Fees.
(1) Applicants must submit a non-refundable application fee with each application in the amount of five hundred ($500) dollars. Upon notification of a determination of reasonable cost in excess of ten thousand dollars ($10,000) and prior to issuance of the Certificate of Reasonable Cost, the applicant must pay an additional fee in an amount equal to one percent (1%) of the reasonable cost in excess of ten thousand dollars ($10,000). If applicable, the penalty prescribed by 28 RCNY § 5-05(b) must also be paid at this time.
(2) If a Code Violation Search report is not submitted with an application submitted on or before December 30, 2004 in accordance with 28 RCNY § 5-05(c)(6)(a), an additional non-refundable filing fee equal to the fee charged by the HPD Division of Code Enforcement, currently thirty dollars ($30), must be submitted to cover the cost of processing such search. This fee must be submitted simultaneously with the five hundred dollar ($500) application fee.
(3) Payment of all fees must be made by certified or cashier's check or a check from an attorney or owner/agent payable to the "NYC Department of Finance NYCJ51 Fee". In the event a check is returned unpaid, the applicant shall be assessed a fifty dollar ($50) processing fee and all further payments with respect to the application shall be made by certified or cashier's check.
(f-1) BLDS Inspections. Except as otherwise provided in Section 489 of the Real Property Tax Law, § 11-243 of the Administrative Code or these Rules, the filing of an application for a Certificate of Eligibility and Reasonable Cost is deemed a representation by such applicant that, with respect to all items of work claimed in such application, there has been Completion of Construction. Unless the aggregate cost of the items of work claimed in such application is less than ten thousand dollars ($10,000) or a designated special application form has been submitted in accordance with subparagraph (iv) of paragraph two of subdivision (c) of this section, all such items of work are subject to a BLDS Inspection prior to HPD's issuance of a Certificate of Eligibility and Reasonable Cost. Any Certificate of Eligibility and Reasonable Cost issued with respect to such application shall not include items of work claimed therein where, as determined by such BLDS Inspection, there has not been Completion of Construction.
(g) Issuance of a certificate of eligibility.
(1) The Office shall review each application to determine if it is eligible for tax benefits in accordance with the provisions of these rules and the Act. The Office will inform an applicant if the file is incomplete; however, it is the applicant's responsibility to complete the application within twenty-four months of the initial filing date as provided in 28 RCNY § 5-03(d)(5). Provided, however, that for projects carried out with substantial governmental assistance and which have received a Temporary Certificate of Eligibility, the applicant must complete the application within one year of the completion of construction.
(2) The certified reasonable cost for all eligible items of work shall be calculated as follows:
(i) The certified reasonable cost for all eligible items of work shall be the lesser of the applicant's actual cost, or the allowance set forth in the Itemized Cost Breakdown Schedule.
(ii) The certified reasonable cost for all eligible items of work shall be reduced where such items are allocable in whole or part to, or service, ineligible portions of the building, if any, in the same ratio as the ineligible space bears to the aggregate floor area of the building.
(iii) For buildings eligible for enriched abatement as provided in 28 RCNY § 5-06(c)(1) the total certified reasonable cost shall not exceed the lesser of the owner's total actual expenditure or one hundred fifty percent (150%) of the total of the Itemized Cost Breakdown Schedule amounts set forth in 28 RCNY § 5-08.
(iv) For buildings subject to the dollar limit set forth in 28 RCNY § 5-06(d), the aggregate certified reasonable cost may not exceed the maximum eligible CRC set forth therein.
(v) [Repealed.]
(3) The Office shall issue a Certificate of Eligibility and Reasonable Cost for all approved applications. Failure to produce satisfactory supporting documentation of the cost of an alteration, improvement or conversion, or any part thereof, or any of the items specified in this chapter may result in the denial of a Certificate of Eligibility and Reasonable Cost.
(h) Filing procedure with the Department of Finance.
(1) For cooperatives and condominiums with an average transitional assessed valuation per dwelling unit of less than forty thousand dollars ($40,000), in order to receive tax abatement beginning on the first day of any tax quarter, the applicant must file a Certificate of Eligibility and Reasonable Cost with the appropriate borough Office of the Real Property Assessment Bureau of the Department of Finance during the third month preceding the start of such tax quarter; i.e.: January 1 through January 31 for the tax quarter beginning April 1, April 1 through April 25 for the tax quarter beginning July 1, July 1 through July 31 for the tax quarter beginning October 1, October 1 through October 31 for the tax quarter beginning January 1.
(2) For cooperatives and condominiums with an average transitional assessed valuation per dwelling unit of forty thousand dollars ($40,000) or more, and for all other buildings receiving benefits, in order to receive tax abatement beginning on the first day of January or July of any year, the applicant must file a Certificate of Eligibility and Reasonable Cost with the appropriate borough office of the Real Property Assessment Bureau of the Department of Finance during the third or sixth month preceding the start of such tax period; i.e.: January 1 through January 31 or April 1 through April 25 for the tax period beginning July 1, or July 1 through July 31 or October 1 through October 31 for the tax period beginning January 1.
(3) The following documents must be filed with the Certificate of Eligibility and Reasonable Cost during the time periods indicated above:
(i) Department of Buildings Certification for Tax Exemption and Tax Abatement (Form J-3) or, if no permits from the Department of Buildings are required, at the option of the Office, alternative documentation to prove absence of Building Code violations;
(ii) Certified Tax Search or copy of Installment Agreement;
(iii) Department of Finance Application for Tax Exemption and Tax Abatement.
(Amended City Record 10/24/2017, eff. 11/23/2017)
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