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(a) Scope of rules. This chapter governs the grant of tax exemption pursuant to § 421-a of the Real Property Tax Law of the State of New York, including the procedure for filing an application for tax exemption and the issuance of Preliminary and Final Certificates of Eligibility by the Office of Development of the Department of Housing Preservation and Development. Upon issuance of the Certificate of Eligibility, the calculation and implementation of the tax exemption are under the jurisdiction of the Department of Finance.
(b) Construction. This chapter is to be construed to secure the effectuation of the purposes of § 421-a of the Real Property Tax Law and § 11-245 of the Administrative Code and in accordance with the general principle of law that exemption statutes are to be strictly construed against the taxpayer applying for the exemption.
(c) Definitions. As used in this chapter, the following terms shall have the following meanings:
Act. "Act" shall mean § 421-a of the Real Property Tax Law, as amended.
Adjusted monthly rent. "Adjusted monthly rent" shall mean the rent payable per month as provided in the first effective lease upon initial occupancy of a rental dwelling unit of a multiple dwelling after completion of construction assisted by exemption under the Act, not inclusive of charges for parking or electricity, gas, cooking fuel and other utilities other than heat and hot water.
Administrative Code. "Administrative Code" shall mean the Administrative Code of the City of New York.
Affordable units. "Affordable units" shall mean units created and rented in accordance with 28 RCNY § 6-08.
Aggregate floor area. "Aggregate floor area" shall mean the sum of the gross horizontal areas of all of the floors of a dwelling or dwellings and accessory structures on a lot measured from the exterior faces of exterior walls or from the center line of party walls.
Annual schedule of reasonable costs. "Annual schedule of reasonable costs" shall mean the amounts determined by the Department to be reasonable for the maintenance and operation of a multiple dwelling in such categories and classifications attached to these rules as Appendix A.
Certificate of Eviction. "Certificate of Eviction" shall mean a certificate of eviction granted by the city rent agency pursuant to § 26-408 of the Administrative Code.
Commencement of construction. "Commencement of construction" shall mean the date upon which excavation and the construction of initial footings and foundations commences in good faith. An architect or professional engineer licensed in the State of New York shall certify that such construction commenced on such date and that such construction was thereafter completed without undue delay. Notwithstanding the foregoing, construction shall not commence prior to issuance by the Department of Buildings of either (i) a building or alteration permit for the construction of an entirely new multiple dwelling, the footprint of which consisted entirely of vacant and unimproved land upon such date, or (ii) an alteration permit for the construction of a new multiple dwelling above, and on an entirely separate tax lot from, one or more existing structures which are to be retained, provided that only the floor area attributable to the new multiple dwelling, and any eligible commercial, community facility or accessory use space within such new structure shall be eligible for benefits under the Act. Any such new multiple dwelling shall comply with all other applicable statutory and regulatory requirements.
Commissioner. "Commissioner" shall mean the Commissioner of the Department of Housing Preservation and Development, or his or her designee, or the chief executive officer of any successor agency thereto authorized to administer these rules.
Completion of construction. "Completion of construction" shall mean the date upon which either a Temporary Certificate of Occupancy is issued for all residential areas in the multiple dwelling or a Permanent Certificate of Occupancy is issued for the entire building.
Construction. "Construction" shall mean the construction of a new building which is a Class A multiple dwelling.
Covered Project. "Covered Project" shall mean a "covered project" as defined in subparagraph (i) of paragraph (a) of subdivision six of § 421-a of the Real Property Tax Law. For purposes of clause (B) of such subparagraph, two or more buildings shall be considered part of one contiguous development if such buildings are located on tax lots existing on or after June 21, 2005 that (1) are adjacent for at least ten linear feet, or (2) but for the intervention of streets, sidewalks or street intersections, would be adjacent for at least ten linear feet. All tax lots apportioned from such tax lots shall be deemed part of one contiguous development.
Demolished. "Demolished" shall mean the total destruction of a building or structure by razing or otherwise.
Department. "Department" shall mean the Department of Housing Preservation and Development of the City of New York or any successor agency or department thereto.
Department of Buildings. "Department of Buildings" shall mean the Department of Buildings of the City of New York or any successor agency or department thereto.
Eligible debt-financed project. "Eligible debt-financed project" shall mean a project that may be encumbered by a lien or mortgage, where (A) such project is not obtaining low income housing tax credits pursuant to § 42(b)(1)(A) of the Internal Revenue Code of 1986, as amended (nine percent (9%) reservation), (B) any lien or mortgage encumbering such project provides that it is expressly subject and subordinate to the Written Agreement entered into with the Department, and (C) the average household income of the units in such project does not exceed eighty percent (80%) of median income.
Floor area of commercial, community facilities, and accessory use space. "Floor area of commercial, community facilities, and accessory use space" shall mean the gross horizontal areas of all the floors or any portion thereof of a multiple dwelling or dwellings and accessory structures or spaces on a lot measured from the exterior faces of exterior walls of commercial or community facilities or accessory uses as such uses are defined in the Zoning Resolution; (See Article 1, Chapter 2). Notwithstanding the foregoing, accessory use space shall not include (a) parking areas which are not part of the building such as uncovered outdoor parking areas and open space beneath a building (including access roads), (b) for properties for which a final certificate of eligibility is issued on or after November 3, 1995, accessory parking space located not more than twenty-three feet above the curb level, (c) for properties for which a final certificate of eligibility is issued on or after May 8, 2013, accessory off-street parking spaces located not more than twenty-three feet above the curb level which (i) are located in the Manhattan Core, as defined in Section 12-10 of the Zoning Resolution, and (ii) meet the requirements of Section 13-21 of the Zoning Resolution.
Geographic exclusion area. "Geographic exclusion area" shall mean that area of Manhattan described in 28 RCNY § 6-02(c)(10).
Hotel. "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, 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.
Low and moderate income. "Low and moderate income" shall mean a household income not exceeding 100 percent of median income. For purposes of this chapter, low income households shall be deemed to be those at 60 percent or less of median income and moderate income households shall be those between 60 and 100 percent of median income, provided, however, that the average household income in any group of affordable units shall not exceed 80 percent of median income.
Median income. "Median income" shall be calculated in accordance with the regulations of the United States Department of Housing and Urban Development governing eligibility for occupancy as a lower income family, by size of family, in the metropolitan statistical area, which includes the City of New York, for purposes of § 8 of the United States Housing Act of 1937, as amended.
Multiple dwelling or building. "Multiple dwelling" or "building" shall mean a dwelling which is, or is to be, lawfully occupied as the residence or home of three or more families living independently of one another, whether individual dwelling units herein are rented or owned as a cooperative or condominium.
Negotiable Certificate. "Negotiable Certificate" shall mean a document issued by the Department which certifies that the bearer is entitled to the benefits of the Act for a specified number of units within the geographic exclusion area, provided that all program requirements have been met.
Office. "Office" shall mean the Office of Tax Incentive Programs of the New York City Department of Housing Preservation and Development or any successor thereto.
Prior assessed valuation. "Prior assessed valuation" shall mean the taxable assessed valuation in effect pursuant to § 1805-(3) of the Real Property Tax Law, exclusive of any exemption, of a tax lot (land and improvements) during the tax year preceding the tax year of Commencement of Construction.
Program for the development of affordable housing. "Program for the development of affordable housing" shall mean housing which complies with the requirements of a grant, loan or subsidy from any federal, state or local agency or instrumentality to provide no less than twenty percent of its units as units affordable to and occupied by or affordable to and available for occupancy by individuals or families whose incomes do not exceed a specified limit and which has been approved by the commissioner pursuant to this chapter.
Public project. "Public project" shall mean a building developed with substantial governmental assistance or a building developed pursuant to a regulatory agreement with a Federal, state or local agency or instrumentality requiring the development of affordable housing.
Residential building. "Residential building" shall mean a structure or part thereof lawfully occupied in whole or part as the home, residence or sleeping place of one or more persons.
Room Count. "Room Count" shall be calculated in the following manner: Each dwelling unit with at least one room which either (i) contains no cooking facilities and measures at least one hundred and fifty (150) square feet, or (ii) contains cooking facilities and measures at least two hundred and thirty (230) square feet, shall count as two and one-half rooms. Every other room in the dwelling unit separated by either walls or doors, including bedrooms, shall count as an additional room, plus one-half room for a balcony, provided, however, that kitchens, cooking facilities, bathrooms or corridors shall not count as an additional room. To be included in the calculation of "room count," a room must meet the requirements of habitability as provided in Administrative Code §§ 27-746 and 27-751.
Single room occupancy. "Single room occupancy" shall mean occupancy in a multiple dwelling by one or more persons of a room or rooms either without a lawful kitchen or kitchenette or without a lawful bathroom or without separate means of egress for occupants thereof to the public areas of the multiple dwelling.
Substantial governmental assistance. "Substantial governmental assistance" shall mean grants, loans or subsidies provided to any building or buildings on the same zoning lot or, if only a portion of such zoning lot is being granted benefits pursuant to the Act, to any building or buildings on such portion of such zoning lot, by any federal, state or local agency or instrumentality pursuant to a program for the development of affordable housing, provided that (1) as determined by the commissioner, each of the buildings on such zoning lot or portion thereof is part of the same project, (2) each of the buildings on such zoning lot or portion thereof is part of the same application for benefits pursuant to the Act, (3) the periods of construction and final real property tax exemption benefits granted pursuant to the Act for all of the buildings on such zoning lot or portion thereof being granted benefits pursuant to the Act shall commence simultaneously, and (4) no final real property tax exemption benefits shall be granted pursuant to the Act for any buildings on such zoning lot or any portion thereof being granted benefits pursuant to the Act until receipt of a certificate of occupancy or a temporary certificate of occupancy for the residential portions of the building or buildings on such zoning lot containing the units affordable to and occupied by or affordable to and available for occupancy by individuals or families whose incomes do not exceed a specified amount. Such subsidies may include allocations of low income housing tax credits and, in the discretion of the Department, below market sales or sales subject to evaporating purchase money mortgages by a federal, state or local agency or instrumentality, but shall not include permanent financing provided through the State of New York Mortgage Agency, purchase money mortgages, or mortgage insurance.
Written Agreement. "Written Agreement" shall mean a document issued by the Department pursuant to 28 RCNY § 6-08(l).
Zoning lot. "Zoning lot" shall mean a "zoning lot" as defined in § 12-10 of the Zoning Resolution.
Zoning Resolution. "Zoning Resolution" shall mean the Zoning Resolution of the City of New York, as amended.
(a) Eligibility. Partial tax exemption will only be granted to multiple dwellings which are eligible projects and which meet all the eligibility requirements of this section.
(b) Eligible projects. The tax benefits of the Act are available to:
(1) new multiple dwellings located outside the geographic exclusion area containing not less than three (3) dwelling units provided construction is commenced before December 31, 2007;
(2) new multiple dwellings located in the geographic exclusion area if the commencement of construction occurred on or before November 29, 1985 and if such building is completed no later than December 31, 2000 and only to the extent the building receives a permanent Certificate of Occupancy indicating that it was built pursuant to architectural, structural, and mechanical plans approved by the Department of Buildings on or before November 29, 1985; and
(3) new multiple dwellings located in the geographic exclusion area if the commencement of construction occurred after November 29, 1985 and before December 28, 2010, only if construction is carried out with substantial governmental assistance or if affordable units are created in accordance with the requirements of 28 RCNY § 6-08.
(c) Ineligible projects. The tax benefits of the Act are not available to:
(1) Any building or structure which is receiving tax exemption and/or tax abatement under any other provision of state or local law for new construction, conversion or rehabilitation, including but not limited to, §§ 488-a and 489 of the Real Property Tax Law and §§ 11-243 and 11-244 of the Administrative Code, and Article 16 of the General Municipal Law; provided however, that if a building or structure is divided into condominium units, and a condominium unit within the building is entitled to receive permanent tax exemption under any statute under which exemption is granted based on the exempt status of the owner, the granting of such an exemption shall not prevent the remaining condominium unit or units from receiving § 421-a exemption.
(2) Any multiple dwelling which results from the conversion or rehabilitation of any building or structure;
(3) Any building or portion thereof which after the completion of construction is used as a hotel, as that term is defined herein;
(4) Any building or portion thereof which after the completion of construction is used for single room occupancy, as that term is defined herein;
(5) Any multiple dwelling situated on land which is mapped as a public park provided, however, that this exclusion from eligibility for exemption shall not apply to any land which has been mapped as a public park but which, for a period of ten years or more after the date of such mapping, has not been acquired by the state or the city in which such land is located and with respect to which land the Department of Parks and Recreation has determined that such land is not required for public park purposes, and that such department has no intention of acquiring such land and that no funds have been allocated for such purpose;
(6) Any multiple dwelling situated on land which was utilized for ten or more consecutive years immediately prior to October first, nineteen hundred seventy-one as a "private park" as hereinafter defined. A private park is a privately owned zoning lot in a densely developed area having a minimum size of four thousand square feet, free of all developments and containing only trees, grass, benches, walkways and passive recreational facilities including structures incidental thereto which has been used and maintained during said period for such passive recreational activity by the general public without charge with the consent and participation of the owner thereof;
(7) Any multiple dwelling, or portion thereof, the construction of which commenced on or after November twenty-ninth, nineteen hundred eighty-five and which is located within any district in the county of New York where a maximum base floor area ratio, as that term is defined in the Zoning Resolution, of fifteen or greater was permitted as of right by provisions of such resolution in effect on April fourteenth, nineteen hundred eighty-two; provided, however, that this rule shall not be applicable to the extent to which such restriction is modified or repealed by State or local law.
(8) Any multiple dwelling the footprint of which is located in whole or in part within any area in the county of New York designated by the Zoning Resolution in effect on the date of commencement of construction as either a manufacturing district or a mixed-use district except to the extent that such multiple dwellings in a mixed-use district could be constructed for residential purposes, as of right, pursuant to the Zoning Resolution, unless construction actually commenced prior to January first, nineteen hundred eighty-two; this restriction is in accordance with City policy of preservation of these districts for mainly non-residential purposes: provided, however, that this restriction shall not apply to multiple dwellings for which construction commenced after the effective date of these rules.
(9) For purposes of paragraphs (7) and (8) above, the obtaining of a variance or special permit to allow residential construction in a manufacturing or mixed-used district shall not render the newly constructed Class A multiple dwelling eligible for tax benefits under the Act. In addition, to the extent the zoning lot of a project includes any building or structure located in such non-eligible district that is not to be demolished, the partial tax exemption shall be reduced by an amount equal to the area of the portion of the zoning lot which is located in such ineligible area.
(10) Except for multiple dwellings qualifying for the benefits of the Act pursuant to 28 RCNY § 6-08:
(i) any project commenced, as that term is defined herein, after November 29, 1985 and before March 7, 2006 within the geographic exclusion area, bounded and described as follows: Beginning at the intersection of the bulkhead line in the Hudson River and 96th Street extended; thence easterly to 96th Street and continuing along 96th Street to its easterly terminus; thence easterly to the intersection of 96th Street extended and the bulkhead line in the East River; thence southerly along said bulkhead line to the intersection of said bulkhead line and 14th Street extended; thence westerly to 14th Street and continuing along 14th Street to Broadway; thence southerly along Broadway to Houston Street; thence westerly along Houston Street to Thompson Street; thence southerly along Thompson Street to Spring Street; thence westerly along Spring Street to Avenue of the Americas; thence northerly along Avenue of the Americas to Vandam Street; thence westerly along Vandam Street to Varick Street; thence northerly along Varick Street to Houston Street; thence westerly along Houston Street and continuing to its westerly terminus; thence westerly to the intersection of Houston Street extended and the bulkhead line in the Hudson River; thence northerly along said bulkhead line to the intersection of said bulkhead line and 11th Avenue extended; thence northerly to 11th Avenue and continuing along 11th Avenue to 14th Street; thence easterly along 14th Street to 10th Avenue; thence northerly along 10th Avenue to 28th Street; thence easterly along 28th Street to 9th Avenue; thence northerly along 9th Avenue to 33rd Street; thence easterly along 33rd Street to 8th Avenue; thence northerly along 8th Avenue to 34th Street; thence easterly along 34th Street to 7th Avenue; thence northerly along 7th Avenue to 41st Street; thence westerly along 41st Street and continuing to its westerly terminus; thence westerly to the intersection of 41st Street extended and the bulkhead line in the Hudson River; thence northerly along said bulkhead line to the place of beginning;
(ii) any project commenced, as that term is defined herein, on or after March 7, 2006 and before May 11, 2007 within the geographic exclusion area, bounded and described as follows: Beginning at the intersection of the bulkhead line in the Hudson River and 96th Street extended; thence easterly to 96th Street and continuing along 96th Street to its easterly terminus; thence easterly to the intersection of 96th Street extended and the bulkhead line in the East River; thence southerly along said bulkhead line to the intersection of said bulkhead line and 14th Street extended; thence westerly to 14th Street and continuing along 14th Street to Broadway; thence southerly along Broadway to Houston Street; thence westerly along Houston Street to Thompson Street; thence southerly along Thompson Street to Spring Street; thence westerly along Spring Street to Avenue of the Americas; thence northerly along Avenue of the Americas to Vandam Street; thence westerly along Vandam Street to Varick Street; thence northerly along Varick Street to Houston Street; thence westerly along Houston Street and continuing to its westerly terminus; thence westerly to the intersection of Houston Street extended and the bulkhead line in the Hudson River; thence northerly along said bulkhead line to the intersection of said bulkhead line and 11th Avenue extended; thence northerly to 11th Avenue and continuing along 11th Avenue to 14th Street; thence easterly along 14th Street to 10th Avenue; thence northerly along 10th Avenue to 30th Street; thence westerly along 30th Street to 11th Avenue; thence northerly along 11th Avenue to 41st Street; thence westerly along 41st Street and continuing to its westerly terminus; thence westerly to the intersection of 41st Street extended and the bulkhead line in the Hudson River; thence northerly along said bulkhead line to the place of beginning; or
(iii) any project commenced, as that term is defined herein, on or after May 11, 2007 and before July 1, 2008 within the geographic exclusion area, bounded and described as follows: Beginning at the intersection of the bulkhead line in the Hudson River and 96th Street extended; thence easterly to 96th Street and continuing along 96th Street to its easterly terminus; thence easterly to the intersection of 96th Street extended and the bulkhead line in the East River; thence southerly along said bulkhead line to the intersection of said bulkhead line and 14th Street extended; thence westerly to 14th Street and continuing along 14th Street to Broadway; thence southerly along Broadway to Houston Street; thence westerly along Houston Street to Thompson Street; thence southerly along Thompson Street to Spring Street; thence westerly along Spring Street to Avenue of the Americas; thence northerly along Avenue of the Americas to Vandam Street; thence westerly along Vandam Street to Varick Street; thence northerly along Varick Street to Houston Street; thence westerly along Houston Street and continuing to its westerly terminus; thence westerly to the intersection of Houston Street extended and the bulkhead line in the Hudson River; thence northerly along said bulkhead line to the intersection of said bulkhead line and 30th Street extended; thence easterly along 30th Street to 11th Avenue; thence northerly along 11th Avenue to 41st Street; thence westerly along 41st Street and continuing to its westerly terminus; thence westerly to the intersection of 41st Street extended and the bulkhead line in the Hudson River; thence northerly along said bulkhead line to the place of beginning; or
(d) Duration of exemption. Eligible buildings may receive a ten, fifteen, twenty or twenty-five year tax exemption, as described herein. In order to qualify for such benefits, the multiple dwelling must meet the eligibility requirements described below for each level of exemption.
(1) Only the ten year exemption is available to buildings located within the geographic exclusion area described in 28 RCNY § 6-02(c)(10), above, and such buildings shall be eligible to receive such benefits only if each building meets one of the following conditions:
(i) construction is carried out with substantial governmental assistance, or
(ii) the Department has imposed a requirement or has certified pursuant to 28 RCNY § 6-08 that 20 percent (20%) of the units are affordable to persons of low and moderate income, or
(iii) pursuant to an agreement with the Department, in conformity with the requirements of 28 RCNY § 6-08, housing units affordable to persons of low and moderate income are either newly constructed or substantially rehabilitated off-site.
(2) The ten year exemption is available to buildings located outside the geographic exclusion area but in Manhattan on tax lots south of or adjacent to either side of 110th Street, the construction of which commenced on or after July 1, 1985, except that the fifteen year exemption shall be available to such buildings if:
(i) construction is carried out with substantial governmental assistance; or
(ii) the Department has imposed a requirement or has certified pursuant to herein that 20 percent (20%) of the units are affordable to persons of low and moderate income.
(3) The fifteen year exemption is available to buildings located in the boroughs of the Bronx, Brooklyn, Queens, Staten Island and in Manhattan north of 110th Street, the construction of which commenced on or after July 1, 1985, unless such multiple dwellings are eligible for the twenty-five year exemption described in (5) below.
(4) The twenty year exemption is available in the borough of Manhattan for buildings on tax lots now existing or hereafter created south of or adjacent to either side of one hundred tenth street which commenced construction after July 1, 1992 and before December 28, 2010, only if:
(i) construction is carried out with substantial governmental assistance; or
(ii) the Department has imposed a requirement or has certified pursuant to 28 RCNY § 6-08 that 20 percent (20%) of the units are affordable to families of low and moderate income.
(5) The twenty-five year exemption is available to buildings located in the boroughs of the Bronx, Brooklyn, Queens, Staten Island or Manhattan north of 110th Street, the construction of which commenced on or after July 1, 1985, if the multiple dwelling:
(i) is located in one of the following areas:
(A) Neighborhood Preservation Program Areas as determined by the Department as of June 1, 1985, or
(B) Neighborhood Preservation Areas as determined by the New York City Planning Commission as of June 1, 1985, or
(C) an area eligible for mortgage insurance provided by the Rehabilitation Mortgage Insurance Corporation (REMIC) as of May 1, 1992, or
(D) an area receiving funding for a neighborhood preservation project pursuant to the Neighborhood Reinvestment Corporation Act (42 U.S.C. §§ 180 et seq.) as of June 1, 1985, or
(ii) meets one of the following conditions:
(A) is constructed with substantial governmental assistance, or
(B) is a building where the Department has imposed a requirement or has certified that 20 percent (20%) of the units contained in that multiple dwelling are affordable to persons of low and moderate income, exclusive of those units created pursuant to 28 RCNY § 6-08.
(e) Construction requirements. To be eligible for partial tax exemption, a multiple dwelling must meet the following requirements:
(1) It shall contain at all times not less than the number of dwelling units specified in 28 RCNY § 6-02(b)(1). A multiple dwelling containing the requisite number of dwelling units may include: garden type maisonette dwelling projects containing a series of attached dwelling units which are provided as a group collectively with all essential services such as, but not limited to, water supply and house sewers, and which units are located on a site or plot under common ownership, including ownership as a condominium; and buildings erected at the same time with common exterior walls, provided that in each case such buildings are operated as a unit under a single ownership, notwithstanding that Certificates of Occupancy were issued by the Department of Buildings for separate portions thereof covering less than the requisite number of units.
(2) If a multiple dwelling contains more than one hundred dwelling units, not less than ten percent of the dwelling units in such multiple dwelling shall contain at least four and one-half rooms and, in addition, not less than fifteen percent shall contain at least three and one-half rooms. The number of rooms in a dwelling unit shall be computed in accordance with the definition of "room count" contained in subdivision (c) of 28 RCNY § 6-01. Those units consisting of four and one-half rooms or more, to the extent that they comprise ten percent of all units in the multiple dwelling, shall not be included as part of the units which must contain three and one-half rooms, comprising a total of fifteen percent of all the units in the multiple dwelling. This room count requirement may be waived in writing at the discretion of the Department:
(i) where the multiple dwelling is to provide housing for the elderly; or
(ii) upon the filing of adequate documentation from which the Department determines that compliance with the room count requirement would impose an undue and unreasonable economic hardship. The necessity of alteration of existing construction shall not in itself be deemed such a hardship.
(3) If construction of a new multiple dwelling commences on or after August 1, 1981 and such construction takes place on land which, immediately prior to the commencement of construction, was improved with a residential building or buildings that have since been substantially demolished, and the new building or buildings contain more than twenty dwelling units, then such new building or buildings shall contain at least five dwelling units for each Class A dwelling unit in existence immediately prior to the demolition preceding construction. The calculation of the ratio of new to old units shall be made based on the entire site included in the 421-a application. For purposes of this paragraph, "immediately prior to the commencement of construction" shall be deemed to be a date which is one month prior to the commencement of construction.
(f) Site requirements.
(1) To be eligible for partial tax exemption, the land upon which an eligible project is located must have been vacant, predominantly vacant, under-utilized, or improved with a non-conforming use on the operative date. The operative date shall be:
(i) thirty-six months prior to the commencement of construction, if construction commences on or after August 1, 1981; or
(ii) October 1, 1971, if construction commenced before August, 1981.
(2) If only part of the land upon which an otherwise eligible project is located satisfies the requirement set forth in paragraph (1), above, or if only part of a building or structure on said land would satisfy that requirement, partial tax exemption shall be available in accordance with the following formula:
(i) If fifty-one percent (51%) or more of the area of the land satisfies the requirement set forth above, then the partial tax exemption shall be reduced by an amount equal to the percent of the area of the site which does not satisfy that requirement;
(ii) If less than fifty-one percent (51%) of the area of the land satisfies the requirement set forth above, then the entire site is ineligible for partial tax exemption hereunder.
(3) Definitions. For the purpose of this subdivision (f), the following definitions are applicable:
Actual Assessed Valuation. "Actual assessed valuation" shall mean the assessed valuation of a tax lot without reference to § 1805(3) of the Real Property Tax Law.
Land improved with a non-conforming use. "Land improved with a nonconforming use" is defined in the same manner as that term was defined in the Zoning Resolution in effect on the operative date.
Predominantly vacant. "Predominantly vacant" land is a plot of land on which not more than fifteen percent (15%) of the lot area contained enclosed, permanent, improvements. Fences, sheds, garage attendant's booths, pier bulkheads, lighting fixtures and similar items, or any improvement having an Actual Assessed Value of less than $2,000 shall not constitute an enclosed, permanent improvement.
Under-utilized. "Under-utilized" land is land or space which was under-utilized by virtue of the fact that:
(A) It was improved with a residential building or buildings
(a) whose room count in occupied dwelling units numbered not more than seventy percent of the room count in dwelling units in the new building or buildings; or
(b) whose aggregate floor area was no greater than seventy percent of the aggregate floor area of the new building or buildings.
(c) provided, however, that buildings commenced prior to the effective date of these rules shall be governed by the rules in effect at the time of commencement.
(B) It consisted of air rights above a public roadway, waterway, railroad right-of-way, public buildings, or other similar property used by the general public, provided that the public building was used by the general public on the operative date and continues to be so used and classified after the completion of the eligible construction, and provided further that "public building" shall mean structures or parts of structures in which persons congregate for civic, political, educational, religious or recreational purposes, or in which persons are harbored to receive medical, charitable or other care or treatment, or in which persons are held or detained by reason of public or civic duty, or for correctional purposes, including among others, court houses, schools, colleges, libraries, museums, exhibition buildings, lecture halls, churches, assembly halls, lodge rooms, club houses with more than five sleeping rooms, dance halls, theatres, bath houses, hospitals, asylums, armories, fire houses, police stations, jails and passenger depots; or
(C) Construction commenced on or after November 29, 1985 and before May 12, 2000 on land that was improved with a non-residential building or buildings
(a) each of which contained:
(1) no more than the permissible floor area ratio for non-residential buildings in the zoning district in question, and
(2) a floor area ratio which was twenty percent (20%) or less of the maximum floor area ratio for residential buildings for such zoning district, or
(b) each of which had an actual assessed valuation equal to or less than twenty percent (20%) of the actual assessed valuation of the land on which the building or buildings were situated, or
(c) which, by reason of the building's configuration or substantial structural defects not brought about by deferred maintenance practices or intentional conduct, could no longer be functionally or economically utilized, on the operative date, in the capacity in which it was formerly utilized.
(D) Except as provided in subparagraph (E) of this paragraph, commencement of construction occurred on or after May 12, 2000 and before October 30, 2002 on land that was improved with a non-residential building or buildings
(a) each of which contained:
(1) no more than the permissible floor area ratio for non-residential buildings in the zoning district in question, and
(2) a floor area ratio which was seventy-five percent (75%) or less of the maximum floor area ratio for residential buildings for such zoning district, or
(b) each of which had an actual assessed valuation equal to or less than seventy-five percent (75%) of the actual assessed valuation of the land on which the building or buildings were situated, or
(c) which, by reason of the building's configuration, or substantial structural defects not brought about by deferred maintenance practices or intentional conduct, could no longer be functionally or economically utilized, on the operative date, in the capacity in which it was formerly utilized.
(E) Commencement of construction occurred on or after May 12, 2000 and before October 30, 2002 on a tax lot now existing or hereafter created which is located south of or adjacent to either side of 110th Street in the borough of Manhattan and on land that was improved with a non-residential building or buildings
(a) each of which contained:
(1) no more than the permissible floor area ratio for non-residential buildings in the zoning district in question, and
(2) a floor area ratio which was fifty percent (50%) or less of the maximum floor area ratio for residential buildings in such zoning district, or
(b) each of which had an actual assessed valuation equal to or less than fifty percent (50%) of the actual assessed valuation of the land on which the building or buildings were situated, or
(c) which, by reason of the building's configuration, or substantial structural defects not brought about by deferred maintenance practices or intentional conduct, could no longer be functionally or economically utilized, on the operative date, in the capacity in which it was formerly utilized.
(F) Except as provided in subparagraph (G) of this paragraph, commencement of construction occurred on or after October 30, 2002 on land that was improved with a nonresidential building or buildings
(a) each of which contained:
(1) no more than the permissible floor area ratio for non-residential buildings in the zoning district in question, and
(2) (i) a floor area ratio which was seventy-five percent (75%) or less of the maximum floor area ratio for residential buildings in such zoning district, or
(ii) if the land was not zoned to permit residential use on the operative date, had a floor area ratio which was seventy-five percent (75%) or less of the floor area ratio of the residential building which replaces such non-residential building; or
(b) each of which had an actual assessed valuation equal to or less than seventy-five percent (75%) of the actual assessed valuation of the land on which the building or buildings were situated, or
(c) which, by reason of the building's configuration, or substantial structural defects not brought about by deferred maintenance practices or intentional conduct, could no longer be functionally or economically utilized, on the operative date, in the capacity in which it was formerly utilized.
(G) Commencement of construction occurred on or after October 30, 2002 on a tax lot now existing or hereafter created which is located south of or adjacent to either side of 110th Street in the borough of Manhattan and on land that was improved with a non-residential building or buildings
(a) each of which contained:
(1) no more than the permissible floor area ratio for non-residential buildings in the zoning district in question, and
(2) (i) a floor area ratio which was fifty percent (50%) or less of the maximum floor area ratio for residential buildings in such zoning district, or
(ii) if the land was not zoned to permit residential use on the operative date, had a floor area ratio which was fifty percent (50%) or less of the floor area ratio of the residential building which replaces such non-residential building; or
(b) each of which had an actual assessed valuation equal to or less than fifty percent (50%) of the actual assessed valuation of the land on which the building or buildings were situated, or
(c) which, by reason of the building's configuration, or substantial structural defects not brought about by deferred maintenance practices or intentional conduct, could not longer be functionally or economically utilized, on the operative date, in the capacity in which it was formerly utilized.
Vacant. "Vacant" land is land, including land under water, which contains no enclosed, permanent improvement. Fences, sheds, garage attendant's booths, piers, bulkheads, lighting fixtures, and similar items, or any improvement having an Actual Assessed Value of less than $2,000 shall not constitute an enclosed, permanent improvement.
(g) Rent regulatory requirements. To be eligible for partial tax exemption the land upon which the eligible project is located must meet the following letting, rental and occupancy requirements:
(1) If a building which, on December 31, 1974, contained more than twenty-five occupied dwelling units administered under the City Rent and Rehabilitation Law, the Rent Stabilization Law of nineteen hundred sixty-nine, or the Emergency Tenant Protection Act of nineteen hundred seventy-four, is displaced, or any unit therein is displaced, the new multiple dwelling will be eligible for partial tax exemption only if a Certificate of Eviction was issued for at least one dwelling unit in the displaced building. If only one unit is displaced as the result of eligible construction, the Certificate of Eviction must pertain to that displaced unit. Notwithstanding the foregoing, the sale, transfer or utilization of air rights over residential buildings which were not demolished shall not be construed as a displacement within the purview of this subdivision (g).
(2) Notwithstanding the provisions of any local law for the stabilization of rents in multiple dwellings or the Emergency Tenant Protection Act of 1974, the rents of a unit shall be fully subject to regulation under such local law or such Act, unless exempt under such local law or such act from regulation by reason of the cooperative or condominium status of the unit, for the entire period during which the property is receiving tax benefits pursuant to the Act, or for the period any such applicable local law or such Act is in effect, whichever is shorter. Thereafter, such rents shall continue to be subject to such regulation to the same extent and in the same manner as if this subdivision (g) had never applied thereto, except that for dwelling units in buildings completed, as that term is defined herein, on or after January 1, 1974, such rents shall be deregulated if:
(i) with respect to dwelling units located in multiple dwellings completed after January 1, 1974 such unit becomes vacant after the expiration of the lease for the unit in effect when such benefit period or applicable law or Act expires, provided, however, such unit shall not be deregulated if the Commissioner of the New York State Division of Housing and Community Renewal or a court of competent jurisdiction finds the unit became vacant because the owner thereof or any person acting on his or her behalf engaged in any course of conduct, including but not limited to, interruption or discontinuance of essential services which interfered with or disturbed or was intended to interfere with or disturb the comfort, repose, peace or quiet of the tenant in his use or occupancy of such unit, and that upon such finding in addition to being subject to any other penalties or remedies permitted by law, the owner of such unit shall be barred from collecting rent for such unit in excess of that charged to the tenant, if the tenant so desires, in which case the rent of such tenant shall be established as if such tenant had not vacated such unit, or compliance with such other remedy, including, but not limited to, all remedies provided for by the emergency tenant protection act of nineteen seventy-four for rent overcharge or failure to comply with any order of the Commissioner of the New York State Division of Housing and Community Renewal, as shall be determined by said Commissioner to be appropriate; provided, however, that if a tenant fails to accept any such offer of restoration of possession, such unit shall return to rent stabilization at the previously regulated rent.
(ii) with respect to dwelling units located in multiple dwellings with became subject to the rent stabilization provisions of the Act on or after July 1, 1984, the lease for the unit expires after such tax benefit period expires, provided that each lease and renewal thereof for such unit for the tenant entitled to a lease at the time of such deregulation contained a notice in at least twelve (12) point type informing such tenant that the unit shall be subject to deregulation upon the expiration of such benefit period and stated the approximate date on which such benefit period was expected to expire. If each lease and renewal thereof has not contained such notice, a unit covered by such lease shall be subject to subdivision (i) above even though it became subject to the rent stabilization provisions of the Act on or after July 1, 1984. This subdivision (ii) shall not apply to any unit in any multiple dwelling which was subject to the rent stabilization provisions of the Act prior to July 1, 1984, notwithstanding any contrary provision in any lease or renewal thereof.
(3) Notwithstanding paragraph (2) above, dwelling units in multiple dwellings owned as cooperatives or condominiums which are exempt from such provisions of law shall not be required to be subject to the provisions of law set forth in that paragraph (2) during the time period specified therein. 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 be registered with the New York State Division of Housing and Community Renewal, provided that an affidavit has been filed with the Office stating that the sponsor will register the building and all units as they become occupied, with the New York State Division of Housing and Community Renewal within fifteen months from the date of issuance of a Final Certificate of Eligibility if a cooperative or condominium plan has not been declared effective by that time.
(4) The offering by the owner to all tenants in rental dwelling units in the multiple dwelling, of an initial lease of at least two years; unless the dwelling unit's rent is regulated by local laws, such as § 26-401 of the Administrative Code, which do not provide for the offering of leases for fixed terms. This requirement shall not preclude a shorter lease where requested by the tenant, or where a lease of at least two years is specifically prohibited by the terms of a Department of Housing and Urban Development regulatory agreement for an insured subsidized project, or where, through foreclosure, title to a building eligible for partial tax exemption pursuant to the Act is held subsequently by the Department of Housing and Urban Development.
(5) No lease for dwelling units subject to the Rent Stabilization Law or Emergency Tenant Protection Act which are registered with the New York State Division of Housing and Community Renewal 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 the New York State Division of Housing and Community Renewal or the Rent Guidelines Board; or an increase of 2.2 percent pursuant to 28 RCNY § 6-04(b).
(a) Submission of application to local community board. An applicant for partial tax exemption pursuant to the Act whose project contains more than twenty dwelling units shall send a complete copy of the application for a Preliminary Certificate of Eligibility and supporting papers by certified mail or hand delivery to the local Community Planning Board for the area in which such project is located within ten days of submission of the application to the Department. A copy of the receipt shall be hand delivered or mailed to the Department for annexation to the application no later than ten days after the date appearing on such receipt.
(b) Standards for review. The local Community Board shall have a forty-five day period after receipt of such application and supporting papers to file objections with the Department as to the applicant's eligibility for partial tax exemption hereunder. Such objections, if any, may only be based upon an applicant's eligibility under subdivision two of § 421-a of the Real Property Tax Law or the applicant's failure to comply with the eligibility requirements in 28 RCNY § 6-02. The local Community Board may, in its own discretion and within the forty-five day period, hold a public hearing to determine whether any objections as to eligibility should be filed. Nothing contained in this section shall preclude a final determination of ineligibility of an applicant by the Department prior to the expiration of the forty-five day period.
(c) Notification to community board. In the event the local Community Board files objections, the Department shall make a determination thereon and notify such Community Board within forty-five days after receipt of the objections.
(d) Review of projects containing more than one hundred fifty dwelling units. Where a project contains more than one hundred fifty dwelling units, the local Community Board may, within thirty days of the receipt of a copy of an applicant's notification, request the Department to hold a public hearing solely on the question of the applicant's eligibility under subdivision two of § 421-a of the Real Property Tax Law or the applicant's failure to comply with the eligibility requirements in 28 RCNY § 6-02. If such request is made, the Department shall hold a hearing before the Commissioner or other person or persons whom he or she may designate, make a determination, and notify the Community Board within forty-five days after such hearing.
(a) Determining the initial adjusted monthly rent and the comparative adjusted monthly rent for rental dwelling units. No certification of eligibility shall be issued by the Department until the Department determines the initial adjusted monthly rent to be paid by tenants residing in rental dwelling units contained within the multiple dwelling. Except for affordable units, the initial adjusted monthly rent is determined in accordance with the provisions of paragraph (3) below.
(1) The total expenses of the multiple dwelling shall be determined by the Department in order to calculate the initial adjusted monthly rent. Total expenses shall mean the annual total of the following:
(i) An amount for the annual cost of operation and maintenance, as established pursuant to the Annual Schedule of Reasonable Costs; plus,
(ii) An amount for vacancies, contingency reserves and management fees as established pursuant to the Annual Schedule of Reasonable Costs; plus,
(iii) Projected real property taxes to be levied on the multiple dwelling and the land on which it is situated at the time of estimated initial occupancy; plus,
(iv) Fourteen percent of the total project cost, as determined pursuant to 28 RCNY § 6-05(b)(1)(i) and the Annual Schedule of Reasonable Costs, which amount will include debt service; less,
(v) The estimated annual income to be derived from any Floor Area of Commercial, Community Facilities, and Accessory Use Space in the multiple dwelling.
(2) The adjusted monthly rent per room shall be determined by the Department by dividing the total expenses as determined pursuant to paragraph (1) above by twelve (12) and then dividing that amount by the Room Count as defined in subdivision (c) of 28 RCNY § 6-01 of this chapter; i.e.,
Total Expenses 12 | = |
Total Monthly Expenses | Total Monthly Expenses Room Count | = | Adjusted Monthly Rent Per Room |
(3) The The initial adjusted monthly rent for each dwelling unit shall be determined by the Department by multiplying the adjusted monthly rent per room to be determined pursuant to paragraph (2) above by the Room Count, as defined in subdivision (c) of 28 RCNY § 6-01, of each rental dwelling unit. Adjustments to the initial adjusted monthly rent per room to be determined pursuant to paragraph (2) above by the Room Count, as defined in subdivision (c) of 28 RCNY § 6-01, of each rental dwelling unit. Adjustments to the initial adjusted monthly rent for any dwelling unit may be allowed by the Department provided that the total of the rentals charged in the multiple dwelling do not exceed the total expenses of such multiple dwelling, as determined pursuant to paragraph (1) above; i.e.,
Adjusted Monthly Rent Per Room × Room Count Per Dwelling Unit | = | Initial Adjusted Monthly Rent for Such Dwelling Unit |
(b) Rent increases. The owner of a multiple dwelling receiving partial tax exemption may insert in each lease to be effective during the period of gradual diminution of tax exemption, as defined in 28 RCNY § 6-06(e), a provision for an annual rent increase over the initial adjusted monthly rental at a rate not to exceed 2.2 percent per annum on the anniversary date of the first lease for the unit provided, however, that no increase shall be permitted pursuant to this subdivision (b) unless specifically provided for in each affected lease, and provided further that no more than one such increase per unit may be charged or collected in each given year regardless of the number of lease renewals or new leases which may pertain to that unit. The initial 2.2 percent escalation and all subsequent escalations shall be based solely on the actual rental amount in effect (regardless of whether the legal regulated rent may be greater) at the commencement of the period during which the increase may be charged and shall not be compounded from year to year but rather shall remain constant based on said rent. In addition, the increase shall be independent of any other escalation authorized by the Rent Guidelines Board and shall not be considered or included when a Rent Guidelines Board increase is effected, making the latter increase effective upon the base rent, excluding the 2.2 percent escalation. The maximum increase permitted by this subdivision (b) is 19.8 percent over the actual rental amount in effect at the commencement of the period during which the increase may be charged. The maximum increase permitted by this subdivision (b) may be charged in each year following the expiration of the tax benefit period, but shall not exceed 19.8 percent, or that amount charged in the last year of the exemption period, and shall not become part of the base rent.
(c) Annual rent schedule. Each year the owner shall make available to the Office a schedule of rents for each unit in the building.
(a) Application forms. All prescribed forms and applications must be obtained from the Department of Housing Preservation and Development, Office of Tax Incentive Programs, 3rd Floor, 150 William Street, New York, New York 10038. All applications shall be submitted to the Department on such form or forms as shall be prescribed by the Department. Only applications complete in all detail shall be considered for a Certificate of Eligibility. All forms must be filled out fully and legibly by the applicant and shall be typewritten or inscribed in permanent ink.
(b) Preliminary Certificate of Eligibility; documentation. An application for a Preliminary Certificate of Eligibility must be made to the Office after the commencement of construction but prior to the issuance of either a Temporary Certificate of Occupancy for all residential areas or a Permanent Certificate of Occupancy. For a public project, the Department may grant an extension of up to four years for filing the application for a Preliminary Certificate of Eligibility. The application for a Preliminary Certificate of Eligibility shall consist of an affidavit in the form required by the Office and shall include the following:
(1) A sworn statement by the owner (if the owner is other than an individual, the statement must be certified by the chief executive officer or managing partner of the owner), together with certifications by certified public accountants, appraisers, engineers and architects where required by this chapter, attesting to the accuracy of information provided to the Department concerning the eligibility of a project under 28 RCNY § 6-02 and the initial adjusted monthly rent required by the Act for each rental dwelling unit contained within the multiple dwelling. This sworn statement shall include, as a minimum, a statement of the following:
(i) Total project cost of the newly constructed building and a breakdown of the costs:
(A) Land acquisition cost or purchase price shall be certified to by an independent certified public accountant or by an appraisal of value of the land and any improvements thereon prepared by an independent appraiser found to be qualified by the Department if the land was purchased more than two years prior to the date of the commencement of construction or in the event that the land was obtained by other than purchase; provided further that in the event the land is leased and not purchased, rent attributable to the development period shall be included in total project cost.
(B) Site preparation costs not covered by an appraisal in subparagraph (A) above shall be certified to by an affidavit from a licensed architect or engineer on a date not more than ninety days prior to the filing of an application for a Preliminary Certificate of Eligibility, and an estimate of the balance of such costs to be incurred prepared by such a licensed engineer or architect. The application for a Final Certificate of Eligibility shall contain a statement of all site preparation costs incurred, which shall be certified to by an independent certified public accountant. Site preparation costs may include, but are not limited to, costs expended to demolish structures. Site preparation costs may also include relocation expenses, which may be independently certified to by the owner or applicant;
(C) A good faith estimate of construction costs as well as an estimate prepared by a licensed engineer of any abnormal, unique or special foundation costs which may be incurred;
(D) An allowance for off-site costs, including but not limited to legal, engineering, and architectural fees, insurance, interest and taxes during construction, title and mortgage fees;
(E) Specific other amounts which would ordinarily and customarily be incurred in connection with the construction of an eligible project.
(ii) Compliance with eligibility requirements including:
(A) Statement of the conditions of the site as of thirty-six months prior to the commencement of construction, or as of October 1, 1971, as required by this chapter, along with sufficient documentation to demonstrate the conditions of the site to the satisfaction of the Department;
(B) A statement of the number of occupied dwelling units in existence on the site on December 31, 1974;
(C) A statement, if the construction is to include more than twenty dwelling units, that the building will provide no less than five Class A dwelling units for each Class A dwelling unit in existence on the site immediately prior to the commencement of new construction; as required by this chapter;
(D) A statement that the new multiple dwelling will contain not less than three dwelling units;
(E) A statement that not less than ten percent of the dwelling units in the new multiple dwelling will contain at least four and one-half rooms and that no less than fifteen percent of such dwelling units will contain at least three and one-half rooms, as determined pursuant to 28 RCNY § 6-02(d), if the multiple dwelling is to contain more than one hundred dwelling units, unless such requirements are waived in writing by the Department;
(F) The submission to the Department of one set of plans approved by the Department of Buildings, as evidenced by a seal of the Department of Buildings thereon or an architect's affidavit that such plans are so approved.
(G) If construction commenced on or before November 29, 1985, sufficient documentation to demonstrate to the satisfaction of the Department the condition of the site on November 29, 1985.
(H) If construction commenced after November 29, 1985 and is located within the geographic exclusion area,
(a) written certification by the Department in accordance with 28 RCNY § 6-08, that 20 percent (20%) of the units contained in that building will be affordable to persons of low and moderate income; or
(b) written certification by the Department, in accordance with 28 RCNY § 6-08, that construction is being carried out with substantial governmental assistance; or
(c) a copy of a written agreement with the Department for the construction or substantial rehabilitation of housing units affordable to persons of low and moderate income on another site, such agreement expressly providing that the creation of said units is intended to meet the requirements of 28 RCNY § 6-08; or,
(d) Negotiable Certificates issued pursuant to §28 RCNY § 6-08, evidencing the bearer's entitlement to the benefits of the Act for the units for which the applicant is seeking tax benefits.
(iii) The date upon which it is estimated that initial occupancy will commence.
(2) A statement of intention that the owner will register all rental units with the New York State Department of Housing and Community Renewal prior to initial occupancy and will offer initial leases of not less than two years to tenants of such stabilized units, or such shorter term as the tenant requests, or a statement that the multiple dwelling is to be owned as a cooperative or condominium.
(3) A certified copy of a Certificate of Eviction, if required by 28 RCNY § 6-02(f).
(4) A schedule of proposed initial rents for each rental dwelling unit in the building. No requests for revision of this schedule will be considered once a Final Certificate of Eligibility has been issued for the building in question.
(c) Filing fees. A non-refundable deposit toward a non-refundable filing fee for each multiple dwelling for which application is made for benefits hereunder shall be paid at the time of the filing of the application for a Preliminary Certificate of Eligibility. The deposit shall be in the amount of one hundred ($100) dollars and shall form part of the non-refundable filing fee of four-tenths (4/10) of one percent (.4%) of the total project cost as determined pursuant to 28 RCNY § 6-05(b), or four-tenths (4/10) of one percent (.4%) of the total project sell-out price, if the building will be owned as a cooperative or condominium, as stated in the last amendment to the offering plan accepted for filing by the New York State Attorney General, at the option of the applicant, less any fees paid to the Department pursuant to 28 RCNY § 6-08(k)(3), which resulted in the issuance of a written agreement. Payment of the balance of this fee shall be made no later than ninety days after approval of the application for a Preliminary Certificate of Eligibility. If payment is not made within such time, a late fee of an additional one-tenth (1/10) of one percent (.1%) of the total project cost, as determined pursuant to 28 RCNY § 6-05(b) shall be charged. In no event shall any Preliminary Certificate of Eligibility be issued prior to full payment of all filing fees deemed by the Department to be outstanding. These fees shall apply to all applications where the first Certificate of Eligibility, for such application, whether Preliminary or Final, is issued after the effective date of these rules. All other applications shall be subject to the fees defined by the rules in effect immediately prior to promulgation of these rules. Payment shall be made by a certified or cashier's check payable to the Commissioner of the Department of Finance of the City of New York. If the application for a Final Certificate of Eligibility includes an increase in the amount of the total project cost, an additional filing fee shall be paid based upon such increase in the total project cost as is approved by the Department.
(d) Final Certificate of Eligibility: documentation.
(1) The owner must file an application for a Final Certificate of Eligibility which shall consist of an affidavit in the form required by the Commissioner and shall include the following:
(i) A sworn statement of the actual total project cost of the newly constructed building. Such actual project cost may be approved by the Department as the total project cost of such building provided all of the items comprising such actual total project cost are certified to by a certified public accountant licensed by the State of New York, and further provided that such actual total project cost does not exceed the specific costs determined by the Department pursuant to its promulgated Annual Schedule, plus any allowable abnormal, unique or special foundation costs which may be incurred. In the event that costs relating to commercial portions of the building are incomplete, an estimate of such costs may be accepted tentatively by the Office, provided a supplemental accountant's certification is provided after such costs have been determined. If additional fees are owed on the basis of such supplemental certification, benefits are subject to revocation pursuant to chapter thirty-nine of this title if the fees are not paid. Where such costs differ from the original cost certification filed with the application for a Preliminary Certificate of Eligibility, such sworn statement shall include
(A) the difference in costs, and
(B) the reason or basis for such difference in costs;
(ii) A revised schedule of proposed initial rents, if any, containing any modification of the original schedule filed with the application for a Preliminary Certificate, for each rental dwelling unit in the building. No requests for revision to this schedule will be considered once a Final Certificate of Eligibility has been issued for the building in question;
(iii) (A) Evidence satisfactory to the Office in a form approved by the Department that the owner of rental dwelling units has registered the building and any occupied units with the New York State Division of Housing and Community Renewal, and, if the building is not fully occupied, an affidavit stating that the owner shall register all remaining units as they become occupied and shall submit proof of such registration of all remaining units in a form approved by the Department upon the earlier to occur of (1) the occupancy of the last remaining unit, or (2) one year from the date of Completion of Construction; or
(B) if the project is to be owned and operated as a cooperative or a condominium, a statement by the owner that if the prospective cooperative or condominium plan has not been declared effective for filing at a time fifteen months after the issuance of a Final Certificate of Eligibility, such owner will register these rental units with the New York State Division of Housing and Community Renewal no later than fifteen calendar days after such fifteen month period.
(iv) A statement of the date of completion of the building.
(v) If construction commenced after November 29, 1985 within the geographic exclusion area, and construction was not carried out with substantial governmental assistance, a copy of the Written Agreement and proof of compliance with the requirements of 28 RCNY § 6-08, including a Permanent Certificate of Occupancy for all new or substantially rehabilitated units or a Temporary Certificate of Occupancy for the entire residential portion of a building or buildings located outside the geographic exclusion area which was constructed or rehabilitated pursuant to an agreement with the Department to qualify the building located within the geographic exclusion area for the benefits of the Act. Proof of compliance shall include the requisite number of Negotiable Certificates in accordance with the ratios set forth in 28 RCNY § 6-08(b).
(vi) In the event that through no fault of the applicant, and due to unforeseen circumstances which are beyond the control of the applicant, construction of the off-site units which was promptly commenced and has been diligently proceeding has not been completed before the completion of the building applying for benefits pursuant to the Act, the Department, in its sole discretion, may permit the applicant to submit a Letter of Credit equal to 150 percent of the Department approved estimate of the cost of completing the off-site units. The written agreement with the Department will be amended to provide a new completion date, after which the Department shall have the authority to use the proceeds of the Letter of Credit to complete the construction.
(vii) Proof that the multiple dwelling has been registered with the Department in accordance with the provisions of Article 2 of Subchapter 4 of the Housing Maintenance Code.
(viii) A) For applications received on or after December 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 December 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.
(B) For purposes of this subparagraph (viii), (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.
(ix) For applications received for any projects that commence construction on or after December 28, 2007, an affidavit from the owner certifying that either (A) all building service employees employed or to be employed at the building shall receive the applicable prevailing wage for the duration of such building's tax exemption pursuant to the Act, or (B) such project contains less than fifty dwelling units, or (C) at initial occupancy, at least fifty percent (50%) of the dwelling units in the multiple dwelling will be affordable to individuals or families with a gross household income at or below one hundred twenty-five percent (125%) of the area median income and that any such rental units will remain affordable for the entire period during which they receive benefits pursuant to this Act.
(x) For applications received for any projects that commence construction on or after the effective date of the amendment that added this subparagraph, an affidavit from the owner certifying that all units that are affordable to persons of low and moderate income that qualify buildings outside of the geographic exclusion area for a twenty-five year exemption will be marketed by the Department pursuant to a fair and open process in accordance with the Department's marketing guidelines or will be marketed in accordance with the marketing guidelines of another federal, state or local agency or instrumentality that provided substantial governmental assistance for the construction of such units.
(2) The application for a Final Certificate of Eligibility must be filed as follows:
(i) for a multiple dwelling to be owned as a rental, the application must be filed prior to occupancy of the building, but no earlier than the date of the application for a Preliminary Certificate of Eligibility.
(ii) for a multiple dwelling to be owned as a condominium or a cooperative, the application must be filed prior to the first taxable status date following the completion of construction. In the event such application is not timely filed, benefits of the Act shall be revoked pursuant to 28 RCNY § 6-07(e)(5) only where the failure to file such application has resulted in the extension of the construction benefit period beyond the actual period of construction.
(iii) (A) For a public project, the Department may grant an extension of up to four years for filing the application for a Final Certificate of Eligibility, provided that to the extent to which the failure to file such application has resulted in the extension of the construction benefit period beyond the actual period of construction for such public project, the construction benefit period shall be retroactively adjusted so that it is coterminous with the actual construction period.
(B) For a building which is not a public project, the Department may grant an extension of up to two years for filing the application for a Final Certificate of Eligibility where the applicant has established that it reasonably relied upon the representations of third parties that the benefits of the Act would be available, provided that to the extent to which the failure to file such application has resulted in the extension of the construction benefit period beyond the actual period of construction for such building, the construction benefit period shall be retroactively adjusted so that it is coterminous with the actual construction period.
(iv) Notwithstanding the provisions contained in subparagraphs (i) through (iii) of this paragraph, the deadlines for filing an application for a Final Certificate of Eligibility shall not apply to any property for which the Department issued a Preliminary Certificate of Eligibility and which has received tax benefits pursuant to the Act on or after January 1, 1990.
(3) The applications for a Final Certificate of Eligibility must be completed by the applicant as follows:
(i) for a multiple dwelling containing one hundred units or less, within ninety days following the issuance of a permanent certificate of occupancy or a temporary certificate of occupancy covering all residential space.
(ii) for a multiple dwelling containing more than one hundred units, within one hundred and eighty days following the issuance of a permanent certificate of occupancy or a temporary certificate of occupancy covering all residential space.
(iii) where an extension has been granted under paragraph (2)(iii) of this subdivision, the application must be completed (A) within ninety days of the filing thereof for a multiple dwelling containing one hundred units or less, or (B) within one hundred and eighty days of the filing thereof for a multiple dwelling containing more than one hundred units.
(4) [Reserved.]
(5) In the event that all the required documents are not timely filed, benefits of the Act may be revoked in accordance with the procedures established pursuant to chapter thirty-nine of this title. An application shall be deemed complete when all items delineated in 28 RCNY § 6-05 have been submitted, as well as any other documents which the Office may request.
(6) Notwithstanding the provisions contained in paragraph (3) of this subdivision, the Office may grant an extension to complete an application for a Final Certificate of Eligibility for good cause shown.
(e) Issuance of a Certificate of Eligibility.
(1) Upon receipt of the application for a Preliminary Certificate of Eligibility the Department shall determine the initial adjusted monthly rent and the comparative adjusted monthly rent with respect to rental dwelling units contained within the multiple dwelling pursuant to 28 RCNY § 6-04(a). Upon the Commissioner's determination that a multiple dwelling is entitled to partial tax exemption hereunder the Department shall issue a Preliminary Certificate of Eligibility to be delivered by the applicant to the appropriate borough officer of the Property Division of the Department of Finance together with his, her or its application to the Department of Finance for partial tax exemption. Such certification shall be conditioned upon the filing and approval of an application for a Final Certificate of Eligibility as herein provided.
(2) Upon receipt of the application for a Final Certificate of Eligibility and either a Temporary Certificate of Occupancy for all residential areas in the multiple dwelling or a Permanent Certificate of Occupancy, and upon the Commissioner's determination that a multiple dwelling is entitled to partial tax exemption hereunder, the Department shall issue a Final Certificate of Eligibility to be delivered by the owner to the appropriate borough officer of the Property Division of the Department of Finance between February 1st and March 15th, together with his, her or its application to the Department of Finance for partial tax exemption.
(f) Voluntary withdrawal. Once an application for a Preliminary Certificate of Eligibility or a Final Certificate of Eligibility has been approved, an owner may withdraw the application only if (i) all taxes which would have been owed absent the exemption are paid to the City, with all interest accrued thereon, and (ii) the building for which the application was made is substantially incomplete or unoccupied by residential tenants.
(g) Declaratory rulings. A declaratory ruling with respect to an analysis of a specific or hypothetical site, project, fact pattern or document or an interpretation of the applicability of a specific provision of the 421-a statute or Rules to an actual or hypothetical site, project, fact pattern or document or any other issue related to eligibility may be given in the discretion of the Office upon payment of a non-refundable fee in the amount of $1,500 payable at the time such declaratory ruling is requested in writing. In no event shall a declaratory ruling bind the Office as to the overall eligibility of a project for 421-a benefits.
(Amended City Record 6/19/2017, eff. 7/19/2017)
(a) Taxes on prior assessed valuation not subject to exemption. Taxes on the assessed value of land receiving benefits under this section, and any improvements thereon, during the tax year preceding the commencement of construction are not eligible for exemption under the Act. Tax exemption under the Act is not available until the tax year following the first year taxable status date following commencement of construction. The Prior Assessed Valuation remains subject to taxation at the prevailing rate from year to year.
(b) Diminution of tax exemption for excess commercial space. As of July 1, 1975, in the event the multiple dwelling contains Floor Area of Commercial, Community Facility and/or Accessory Use Space which exceeds twelve percent (12%) of the Aggregate Floor Area, there shall be a diminution of the tax exemption in an amount equal to the ratio of Floor Area of Commercial, Community Facility and/or Accessory Use Space in excess of twelve percent (12%) of the Aggregate Floor Area to the Aggregate Area. Where a project contains a separately assessed parcel such as a residential condominium located above a separately owned commercial space, the proportionate reduction of tax exemption resulting from Commercial, Community Facility and Accessory Use Space in excess of twelve percent (12%) shall be allocated entirely to the non-residential parcel or parcels up to the point that no exemption exists for any such parcel before applying the reduction in exemption to the residential space, provided, however, that such allocation shall only be made with respect to properties for which a preliminary application for benefits is received after July 26, 1993 or for which a final application is received after such date if no preliminary application was received.
(c) Exemption during construction. Multiple Dwellings which satisfy all of the requirements set forth herein and have received a Preliminary Certificate of Eligibility shall be exempt from real property taxes, other than assessments for local improvements, upon any increase in assessed valuation over the Prior Assessed Valuation during the statutorily defined period of construction, or for a period of three years, whichever is less, provided that taxes shall be paid in each tax year in which full or partial exemption is in effect on the Prior Assessed Valuation, as defined in 28 RCNY § 6-01(c).
(d) Exemption after construction. After the first taxable status date immediately following the completion of construction any increase in assessed valuation over the Prior Assessed Valuation of eligible multiple dwellings which have received a Final Certificate of Eligibility shall be exempt from real property taxes, other than assessments for local improvements, for either ten, fifteen, twenty or twenty-five consecutive tax years, as provided in 28 RCNY § 6-02(d), pursuant to the following schedules. In addition, owners must pay full taxes on the Prior Assessed Valuation, as defined in 28 RCNY § 6-01)(c).
TEN YEAR EXEMPTION | |
Year | Percent of Increased Assessed Valuation Which is Exempt |
First | 100% |
Second | 100% |
Third | 80% |
Fourth | 80% |
Fifth | 60% |
Sixth | 60% |
Seventh | 40% |
Eighth | 40% |
Ninth | 20% |
Tenth | 20% |
Eleventh | 0% |
FIFTEEN YEAR EXEMPTION | |
Year | Percent of Increased Assessed Valuation Which is Exempt |
First through Eleventh | 100% |
Twelfth | 80% |
Thirteenth | 60% |
Fourteenth | 40% |
Fifteenth | 20% |
Sixteenth | 0% |
TWENTY YEAR EXEMPTION | |
Year | Percent of Increased Assessed Valuation Which is Exempt |
First through Twelfth | 100% |
Thirteenth and Fourteenth | 80% |
Fifteenth and Sixteenth | 60% |
Seventeenth and Eighteenth | 40% |
Nineteenth and Twentieth | 20% |
Twenty-first | 0% |
TWENTY-FIVE YEAR EXEMPTION | |
Year | Percent of Increased Assessed Valuation Which is Exempt |
First through twenty-first | 100% |
Twenty-second | 80% |
Twenty-third | 60% |
Twenty-fourth | 40% |
Twenty-fifth | 20% |
Twenty-sixth | 0% |
(e) Period of gradual diminution of tax exemption. Solely for purposes of 28 RCNY § 6-04(b), the period of gradual diminution of tax exemption shall be the following:
(1) For the ten year benefit period, the ten years beginning in the first year of exemption after completion of construction.
(2) For the fifteen year benefit period, the five years beginning in the eleventh year of exemption after completion of construction.
(3) For the twenty year benefit period, the eight years beginning in the thirteenth year after completion of construction.
(4) For the twenty-five year benefit period, the five years beginning in the twenty-first year of exemption after completion of construction.
(a) Multiple dwellings affected. Within the geographic exclusion area described in 28 RCNY § 6-02(c)(10), the benefits of the Act are available only to multiple dwellings which would otherwise be eligible for benefits of the Act pursuant to the provisions of these rules and where construction commenced on or before November 29, 1985, unless such construction is carried out with substantial governmental assistance, or the owner thereof complies with the requirements of this section.
(b) Number of affordable units required to be created. A multiple dwelling located in the geographic exclusion area which would otherwise be eligible pursuant to the provisions of these rules and not constructed with substantial government assistance may qualify for benefits under the Act by the method described in either paragraph (1), (2), (3), (4), (5), or (6) of this 28 RCNY § 6-08(b). The ratio of the number of affordable units to be created to the number of units in a multiple dwelling located within the geographic exclusion area seeking the benefits of the Act are listed below.
(1) Obtaining the certification of the Department that twenty percent (20%) of the units contained in the multiple dwelling applying for benefits pursuant to the Act shall be rented to persons of low and moderate income as defined by this chapter at rents to be determined by the Department pursuant to this section.
(2) Entering into a written agreement with the Department on or before December 31, 1990 to create through new construction on a site or sites meeting the requirements of 28 RCNY § 6-02(f), Class A dwelling units to be rented to persons of low and moderate income as defined by this chapter at rents to be determined by the Department pursuant to this section numbering at least twenty percent (20%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(3) Entering into a written agreement with the Department on or before December 31, 1990 to substantially rehabilitate an existing Class A multiple dwelling, the residential portion of which is vacant, to be rented to persons of low and moderate income as defined by this chapter at rents to be determined by this section. The number of units to be substantially rehabilitated shall be in accordance with the following ratios:
(i) twenty-five percent (25%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a rental; or
(ii) thirty percent (30%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a cooperative or condominium.
(4) Entering into a Written Agreement with the Department on or after January 1, 1991 to create Class A dwelling units through new construction on a site or sites meeting the requirements of 28 RCNY § 6-02(f) to convert an existing non-residential building to a Class A multiple dwelling, or to substantially rehabilitate an existing Class A multiple dwelling building, the residential portion of which is vacant and has been entirely vacant for not less than three years, to be rented to:
(i) persons of low income as defined by this chapter at the rents to be determined by the Department pursuant to this chapter numbering at least twenty percent (20%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(ii) persons of moderate income as defined by this chapter at rents to be determined by this section numbering at least twenty-five percent (25%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(iii) homeless persons are referred by the Department or by the Human Resources Administration, numbering at least sixteen and six-tenths percent (16.6%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(5) Entering into a written agreement with the Department to create through new construction or substantial rehabilitation Single Room Occupancy units to be rented to persons of low and moderate income as defined by these rules at rents to be determined by the Department pursuant to this section. The number of units to be created shall be in accordance with the following ratios:
(i) forty-two percent (42%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a rental; or
(ii) fifty-one percent (51%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a cooperative or condominium.
(6) If the average size of the residential units contained in the multiple dwelling or dwellings located within the geographic exclusion area seeking benefits pursuant to the Act exceeds 1,200 square feet, the Department shall increase the number of affordable units which must be created pursuant to paragraphs (2), (3), (4) or (5) of 28 RCNY § 6-08(b) by multiplying that number of units by the ratio of the average square footage to 1,200 square feet unless the average square footage per unit of the low and moderate income units is equal to those of the multiple dwelling in the geographic exclusion area and the developer is the same for the geographic exclusion area units and the affordable units.
(7) If the number of low and moderate income units to be created exceeds 130, two out of every three units in excess of 130 must be rented to moderate income households as defined in this chapter, and must number twenty-five percent (25%) of the number of the units in the multiple dwelling located within the geographic exclusion area seeking the benefits of the Act; and one out of every three units in excess of 130 must be rented to low income households as defined in this section, and must number twenty percent (20%) of the number of units in the multiple dwelling located within the geographic exclusion area seeking the benefits of this Act.
(c) Location of affordable units. Dwelling units created to satisfy the requirements of this section must be contained in a multiple dwelling located on a site or sites outside of the geographic exclusion area, except those affordable units contained in the multiple dwelling, located within the geographic exclusion area, seeking benefits of the Act. In addition, where a written agreement was executed on or after January 1, 1991, dwelling units created to satisfy the requirements of this chapter may also be located on a site or sites within the geographic exclusion area. Sites outside of the geographic exclusion area may be either privately owned or owned by the City of New York. The development of City owned sites must be carried out pursuant to the provisions of 28 RCNY § 6-08(d).
(d) Development of City-owned sites.
(1) An applicant for benefits pursuant to this Act who wishes to create the required number of low and moderate income units on a vacant City-owned site may be offered a site or sites pursuant to a method to be established by the Department. Such method shall make available parcels which will yield the necessary number of low and moderate income units.
(2) The following procedures apply to the substantial rehabilitation or conversion of City-owned sites or to new construction on vacant City-owned parcels:
(i) All construction shall be performed by the developer under a license agreement with the City. At no time will title to the multiple dwelling be conveyed to the developer. All hard and soft development costs will be borne by the developer.
(ii) After a permanent Certificate of Occupancy has been issued for the multiple dwelling or dwellings, the Department shall convey title to the multiple dwelling or dwellings to a qualified not-for-profit organization in whose catchment area the project is located. Disposition will be for $1 per multiple dwelling through ULURP or UDAAP. If the building is located in the catchment area for more than one local and/or city-wide qualified not-for-profit group, the Department will select the group to whom the building will be sold.
(iii) one hundred percent (100%) of the units in the multiple dwelling or dwellings must be affordable units.
(iv) ten percent (10%) of the units must be provided for homeless families. Referrals will be made by HPD/HRA by agreement with the not-for-profit organization, which shall provide the not-for-profit organization with the ability to screen prospective tenants.
(e) Ownership of affordable units.
(1) All affordable units created pursuant to this section must be owned as rentals, for either 20 years or as long as the building containing the affordable units receives real estate tax benefits, whichever is longer.
(2) Buildings containing affordable units created on privately owned sites may be owned by either a for-profit or a qualified not-for-profit organization.
(i) In the event ownership of the affordable units is retained by a for-profit owner, the owner of the building receiving the benefits of the Act as a result of satisfaction of the requirements of this section shall have the ongoing responsibility for insuring the continuing maintenance and operation of the affordable units in a habitable condition. Should an owner fail to maintain such units as affordable or in a habitable condition, benefits of the Act received by the multiple dwelling located in the geographic exclusion area shall be revoked retroactive to the start of construction. Such revocation shall be conducted in accordance with the procedures established pursuant to chapter thirty-nine of this title.
(ii) The developer of the affordable units on privately owned sites may elect to transfer ownership of the off-site units to a qualified not-for-profit organization is a New York State corporation experienced in the management of low income housing and approved in writing by the Department in accordance with the purpose of this section. In that event, the developer must convey title to a qualified not-for-profit for $1.00 per multiple dwelling. The not-for-profit owner shall assume the ongoing responsibility for insuring the continuing maintenance and operation of the affordable units in a habitable condition. Failure of the not-for-profit to maintain such units as affordable or in a habitable condition shall not result in a revocation of the tax benefits received by the multiple dwellings located in the geographic exclusion area.
(iii) A developer creating affordable units on a privately-owned site with the assistance of the Federal Low Income Housing Credit under § 42 of the Internal Revenue Code of 1986 may retain ownership of such units if the developer enters into a management contract with a qualified managing agent approved in writing by the Department and conforms to the requirements of this section. Failure of the managing agent to maintain such units as affordable or in a habitable condition shall not result in a revocation of the tax benefits received by the multiple dwelling located in the geographic exclusion area.
(A) The management contract must be approved by the Department and shall be for twenty years or for the length of the real estate tax benefits on the affordable units, whichever is longer. The developer must obtain the prior written approval of the Department to substitute another qualified managing agent if, during the term of the contract, the relationship with the original manager is severed for any reason.
(B) The affordable units must remain as rent stabilized units for twenty years or the length of the real estate tax benefits on such affordable units, whichever is longer. Thereafter, upon each vacancy the affordable units may be deregulated according to the following schedule:
Year After Expiration of Lower Income Housing Plan | Maximum % of Units that can be at Market |
Year After Expiration of Lower Income Housing Plan | Maximum % of Units that can be at Market |
One | 0% |
Two | 0% |
Three | 20% |
Four | 20% |
Five | 40% |
Six | 40% |
Seven | 60% |
Eight | 60% |
Nine | 80% |
Ten | 80% |
Eleven | 100% |
(C) The developer shall enter into an agreement with the Department to fund two reserve funds. The first shall create sufficient funds for maintenance and operation of the affordable housing units to the extent to which maintenance and operating expenses exceed income available from the rent roll, and shall be created in accordance with 28 RCNY § 6-08(f). The second covers capital improvement costs and will require the developer to deposit with the City a Capital Improvement Escrow Fund equal to 1 percent (1%) of total development costs. The developer will be required to replenish the fund within sixty (60) days of any drawing down. Interest will accrue to such Fund, which will be held by the Department. The not-for-profit can draw on this escrow fund upon authorization by the Department if the developer fails to make necessary capital repairs. Neither the Department nor the City shall have any liability as Escrow Agent; the Department's determination of withdrawal of funds shall be binding on all parties.
(D) If HPD approves a not-for-profit manager, the developer must enter into a purchase option contract with the not-for-profit for the period of the affordable housing plan. This option contract shall state that the not-for-profit manager may purchase the affordable units for $1 if the owner abandons the project. Evidence of abandonment shall include failure by the developer to meet the maintenance and operating expenses, failure to replenish the Capital Improvement Escrow Fund, or failure to make necessary repairs. Further, if during the time of the Federal Low Income Housing Credit, such credit is revoked and recaptured due to failure by the developer to comply with the applicable provisions of the Internal Revenue Code and any applicable regulations, then the not-for-profit may exercise the purchase option listed above. If the developer retains ownership through the end of the affordable housing plan, then the Capital Improvement Escrow Fund is paid to the developer upon expiration of the affordable housing plan. If the developer abandons the development before the end of the expiration of the affordable housing plan, then the Capital Improvement Escrow Fund is transferred to the not-for-profit. The purchase option contract may provide for an automatic termination of the contract if HPD approves termination of the not-for-profit as managing agent. In the absence of a not-for-profit manager, HPD may require the owner to enter into a purchase option contract with a not-for-profit acceptable to HPD which would take effect in the event of abandonment.
(f) Special reserve account. The developer of affordable units necessary to qualify a multiple dwelling within the geographic exclusion area for benefits of the Act, which shall not be owned by the for-profit developer of such multiple dwelling, must create a special operating reserve fund. The fund shall be in the amount of $2.25 for each square foot of affordable housing contained in such new, newly converted or substantially rehabilitated multiple dwelling or dwellings, including a pro rata share of common space of buildings not entirely lower income. The fund shall be placed in a blocked account which will be administered by the Department. This reserve fund is separate from the normal building reserve fund built into the rent roll that will be accumulated over time and will be available only on a program-wide basis to cover unanticipated increases in the costs of operating and maintaining units in general. Once an expenditure from the fund has been authorized on a programmatic basis, the dollars can be drawn down on a project-by-project basis. There will be a separate account for each project. Notwithstanding the above, the reserve fund may also be drawn down, with the approval of the Department, in the event of unusual occurrences not normally covered by the normal building reserves.
(g) Construction requirements.
(1) Affordable Class A dwelling units created through new construction must meet the standards set forth in the Department's "Design Guidelines For Housing – New Construction" and "Standard Specifications" ("Design Guidelines") (applicant should obtain the most recent edition of the Design Guidelines from the Department). In addition, such dwelling units must satisfy one of the following requirements:
(i) Unless the affordable units are created under 28 RCNY § 6-08(b)(3) or (b)(5), 50 percent (50%) of the units must contain two or more bedrooms, and in all cases average square footage and bedroom mix must be equally distributed with respect to all income levels; or
(ii) For multiple dwellings that commence construction before December 28, 2007, such affordable units must be located in the same building and must contain the same average square footage and bedroom mix of all residential units contained in such multiple dwelling. For multiple dwellings that commence construction on or after December 28, 2007, if the affordable units are created in accordance with 28 RCNY § 6-08(b)(1) and unless preempted by federal requirements, (A) all affordable units must have a comparable number of bedrooms and a unit mix proportional to the market rate units contained in such multiple dwelling, or (B) at least fifty percent (50%) of the affordable units must have two or more bedrooms and not more than fifty percent (50%) of the remaining affordable units can be smaller than one bedroom, or (C) the floor area of the affordable units must be no less than twenty percent of the total floor area of all dwelling units in such multiple dwelling.
(2) Affordable Class A dwelling units created through substantial rehabilitation or conversion must meet the standards set forth in the Department's "Design Guidelines For Housing – Substantial Rehabilitation" and "Standard Specifications." ("Design Guidelines") (applicant should obtain the most recent edition of the Design Guidelines from the Department).
(i) In order for the rehabilitation of a vacant multiple dwelling or the conversion of a non-residential building to qualify under 28 RCNY § 6-08(b)(4), the scope of work must include but is not limited to the following:
(A) Beam replacement, to the extent required by the Department
(B) New subflooring
(C) New partition framing
(D) New sheetrock walls and ceilings
(E) New windows
(F) New finish flooring, roofing and insulation
(G) New kitchen cabinets
(H) New baths with ceramic tile finishes
(I) New interior and exterior doors (wood and metal)
(J) New finish carpentry
(K) New plumbing
(L) New heating
(M) New electrical
(N) New elevators (where applicable)
(O) Masonry repairs, to the extent required by the Department
(P) New fire escapes, to the extent required by the Department
(Q) Concrete site work, to the extent required by the Department
(ii) At least fifty percent (50%) of the affordable units created pursuant to this paragraph shall contain two or more bedrooms each, except that the Department may reduce the bedrooms requirements when, in the sole opinion of the Department, existing structural elements preclude compliance. If the Department approves a reduction in the number of bedrooms, the developer will be required to rehabilitate or create through conversion additional units in a room and bedroom configuration which is acceptable to the Department, to compensate for the number of bedrooms and square footage which would have been obtained had the bedroom requirement been met. For the purposes of computation, the Department will require three studios or two one-bedroom units to be built for every two-bedroom unit lost. The Department will seek the solution which results in creating apartments with the highest bedroom count possible, consistent with the Department's policy of creating housing which meets the needs of families.
(3) Single Room Occupancy Units created to conform to 28 RCNY § 6-08(b)(5) must conform to the Department's Single Room Occupancy Guidelines (applicant should obtain the most recent edition of the Guidelines from the Department).
(h) Income and occupancy requirements. All units created pursuant to this section must, at initial occupancy, be affordable to low and moderate income households, as defined in this chapter. Such units must be rented to households earning no more than four times the annual rent for the dwelling unit established pursuant to 28 RCNY § 6-08(i), and must be rented to households that consist of the minimum number of people as specified below:
Bedroom Size | Minimum Number of People |
0 | 1 |
1 | 1 |
2 | 2 |
3 | 4 |
(i) Initial rents; re-rentals.
(1) For projects permitted to assume debt pursuant to 28 RCNY § 6-08(o)(2), the Department shall establish initial rents for individual units as provided in subparagraph (i). For all other projects, initial rents shall be established as provided in subparagraph (ii).
(i) Units rented to persons of low income are not to exceed 30% of 55% of median income. Units rented to persons of moderate income are not to exceed the average of 30% of 75% of median income, provided that no initial annual rent will be established for any unit in a moderate or mixed income project which exceeds 30% of 95% of annual median income. The Department shall establish a total rent roll for units created pursuant to this section based upon program-wide standards for the amount necessary for maintenance, operation, administration, creation of normal reserve accounts, debt service, and in consideration of the income level to be served. For the purpose of determining median income, the following family sizes shall be imputed:
Number of Bedrooms | Imputed Family Size |
0 | 1.0 |
1 | 1.5 |
2 | 3.0 |
3 | 4.5 |
4 | 6.0 |
(ii) The Department shall establish a total rent roll for units created pursuant to this section based upon program-wide standards for the amount necessary for maintenance, operation, administration and the creation of normal reserve accounts, and in consideration of the income level to be served. For affordable units being constructed under any of the options in this section, the managing agent may set rents higher than the allowable rent roll only with the prior written approval of the Department and only as long as no household is charged more than thirty percent (30%) of their annual income for rent. Such rents shall be the higher of the rents in effect when the Written Agreement for Creation of Affordable Housing is entered into or when construction of the affordable housing units commences. The initial rents for individual units will be determined by the managing entity, and must be affordable to low and moderate income families, as defined in this chapter. In no case shall the initial rent of any affordable unit exceed 30% of 100% of median income.
(2) Upon initial occupancy, all units created pursuant to this section must be registered with the New York State Division of Housing and Community Renewal. Such units must remain rent stabilized for the entire period during which such units receive real estate tax benefits under any New York State or New York City tax abatement and/or exemption programs, or for 20 years, whichever is longer.
(3) Future rent increases may not exceed the increases established by the Rent Guidelines Board.
(4) Upon vacancy, units must be re-rented at no more than the legal stabilized rent. All units must be rented to families earning no more than four times such annual rent.
(5) Tenants holding a lease and in occupancy of any unit created pursuant to this section at the expiration of the rent stabilization period pursuant to paragraph (2) of this subdivision (i) shall have the right to remain as rent stabilized tenants for the duration of their occupancy. Once units become vacant after termination of benefits, the owner of such units shall have the option to de-stabilize such rents.
(6) Tenant incomes and rents must be certified to the Department by the owner of the multiple dwelling containing the affordable units following initial rent up. Thereafter, the owner of such multiple dwelling must certify to the Department tenant incomes and rents for all re-rentals after vacancies on an annual basis, but no later than January 31 for each calendar year ending December 31.
(7) For the purposes of this subsection (i), "rent" shall mean gross rent, as defined for the purposes of the federal low income housing tax credit program, and shall include utilities. In the event that utilities are charged separately, gross rent shall be reduced accordingly.
(j) Second tier rents. As an additional protection against future insolvency of units created pursuant to this section and owned by a qualified not-for-profit organization, the Department will also register with the New York State Division of Housing and Community Renewal a second level of rents. This second tier of rents will be set by the Department at or very close to the maximum rents affordable to moderate income families as defined in this chapter. Implementing the second tier of rents for any unit will be allowed on vacancy only with the Department's written permission. The Department will give its permission after a finding that the project has been efficiently managed and the need for second tier rents are a result of factors outside the control of the not-for-profit owner, but in any event, in the following cases only:
(1) When the project's financial feasibility is threatened by a significant unanticipated rise in maintenance and operating expenses that cannot be covered by the rent roll and available reserves; or
(2) When a significant, unanticipated expense occurs in the building that cannot be covered by the rent roll and available reserves; or
(3) When rents rise faster than the income of the tenants who are paying 30 percent (30%) of their income in rent and where the increased rent(s) on the vacant unit(s) are used to maintain the rents for existing tenants at 30 percent (30%) of their income.
(k) Time requirements; filing fees.
(1) The written agreement with the Department for the creation of affordable units pursuant to this section must be entered into prior to the commencement of construction of such affordable units.
(2) Such written agreement may be entered into after the commencement of construction of the multiple dwelling or dwellings located in the geographic exclusion area seeking benefits of this Act.
(3) Any request for a written agreement pursuant to 28 RCNY § 6-08(l) shall be accompanied by a filing fee of $100 for each proposed unit of affordable housing, which fee shall be non-refundable but shall be applied to the filing fee for the tax benefits for the affordable units, as established by 28 RCNY § 6-05(c) and 28 RCNY § 5-05(f) governing tax exemption and abatement pursuant to § 11-243 of the Administrative Code (J-51).
(l) Request for written agreement. The following shall be required to be submitted to the Department with any request for a written agreement. Once approved, all documents will be incorporated into the agreement, the complete package to be referred to as The 421-a Written Agreement for Creation of Affordable Housing:
(1) A cover sheet identifying:
(i) the applicant
(ii) if a corporate entity, the principals in that entity
(iii) the location of the affordable housing units
(iv) the location, if known, of the multiple dwelling located within the geographic exclusion area seeking benefits of the Act.
(2) A statement that the units are intended to entitle a project to receive benefits of the Act and that such units will be rented in compliance with all provisions of this chapter.
(3) Proof of control of the site of the affordable units including:
(i) if privately owned, deed or contract of sale; or
(ii) if a city-owned building is to be rehabilitated or converted,
(A) proof of selection of site; and
(B) endorsed license agreement with the City to permit the rehabilitation or con- version.
(4) Preliminary building plans as approved by the Department, indicating a site plan of the low and moderate income building, total size of the building and the size and configuration of the dwelling units to be contained in the building.
(5) A scope of work indicating the extent of rehabilitation or scope of new construction or conversion.
(6) Identification of the owner of the affordable units created on privately owned sites:
(i) if a for-profit owner, the name of the ownership entity and principals.
(ii) a not-for-profit owner, the name of not-for-profit and evidence of pre-qualification.
(7) A marketing plan for tenant selection and apartment rental. The marketing plan shall identify specific organizations or institutions, such as Community Boards, not-for-profit organizations, senior citizen centers, religious institutions, etc., which shall advertise the availability of the affordable units and must be in accordance with the Department's marketing guidelines, which can be obtained from the Department. All marketing efforts must meet equal opportunity and fair housing guidelines.
(8) A statement that a rental multiple dwelling located within the geographic exclusion area which qualified for benefits under the Act pursuant to 28 RCNY § 6-08(b)(3), (4) or (6) of this section will not be converted to cooperative or condominium ownership during the period of partial tax exemption. Conversion may be permitted by the Department subsequent to the expiration of the period of partial tax exemption where the affordable units are owned by a for-profit organization only if the conversion sponsor:
(i) enters into a Written Agreement with the Department to provide for the maintenance and operation of the affordable units for the remainder of the 20 years or the period during which such units receive tax benefits under any New York State or New York City tax abatement or exemption program, whichever is longer, or
(ii) transfers the ownership of the affordable units to a not-for-profit organization qualified by the Department.
(9) Where affordable units are created pursuant to 28 RCNY § 6-08(b)(1), a statement that such units will not be converted to condominium or cooperative ownership for 20 years, or as long as the buildings containing the affordable units receive tax benefits under any tax abatement or tax exemption program from the State of New York or the City of New York, whichever is longer.
(10) Where the affordable units will be owned by for-profit organization, except those units meeting the requirements of 28 RCNY § 6-08, a statement that the recipient of the benefits of this Act will be responsible for the maintenance and operation of the units in a habitable condition. If the units will be owned by a not-for-profit organization as permitted under 28 RCNY § 6-08(e)(2)(iii), the developer shall be required to fund a reserve fund in the amount of $2.25 for each square foot of affordable housing provided, in the same manner as that described in 28 RCNY § 6-08(f), and a Capital Improvement Escrow Fund in accordance with 28 RCNY § 6-08(e)(2)(iii).
(11) For units to be owned by a not-for-profit organization, an agreement to fund a blocked reserve account, in an amount specified by this section and administered by the Department, or to create such a fund should the units owned by a for-profit organization be transferred to a not-for-profit in the future.
(12) An agreement to submit to the Department, within five days of their execution or issuance by another City agency:
(i) a construction contract for the creation of the lower income units between the applicant and the entity chosen to carry out the construction;
(ii) final approved plans by the Department of Buildings;
(iii) the altered building application and alteration permit for substantial rehabilitations and conversions or the new building permit for new construction;
(iv) a temporary certificate of occupancy for the entire residential portion of the building or the permanent certificate of occupancy.
(13) An agreement that changes or amendments made to any document included in this plan must obtain the prior approval of the Department.
(14) A filing fee in the amount of $100 for each proposed unit of affordable housing.
(15) A financial statement describing proposed sources and uses of all funds for the project, as approved by the Department.
(m) Certification; negotiable certificates.
(1) After the Department determines that a request for Written Agreement is complete and satisfies all requirements of this section, the Department shall approve the request for a Written Agreement. The Written Agreement will provide for the granting of benefits of this Act for a specified number of dwelling units contained in a multiple dwelling located within the exclusion area. Such Written Agreement must be submitted to the Department with the application for benefits of the Act for the multiple dwelling located in the geographic exclusion area. In the event benefits of the Act are granted based upon a Written Agreement, failure to satisfy the conditions contained in such Written Agreement will result in a revocation of any benefits received by the multiple dwelling located in the exclusion area.
(2) Upon the submission to the Department of a permanent Certificate of Occupancy for, or the temporary Certificate of Occupancy for the entire residential portion of, the building containing the affordable units created pursuant to this section, the Department shall conduct a site inspection. Following that site inspection and upon satisfaction that all terms of the Written Agreement and of this section have been met, the Department shall issue the Negotiable Certificates representing the completion of the affordable units.
(3) Such Negotiable Certificate shall be required prior to the issuance of the Final Certificate of Eligibility for a multiple dwelling located within the geographic exclusion area pursuant to 28 RCNY § 6-05(e), unless at the sole option of the Department, pursuant to 28 RCNY § 6-05(d)(l)(vi), a Letter of Credit has been submitted to the Department.
(4) Such Negotiable Certificate shall provide that a specified number of dwelling units containing up to an average size of twelve hundred square feet to be constructed in the geographic exclusion area shall be eligible to receive benefits of the Act.
(5) In the event that the benefits of the Act are to be transferred to more than one building located within the geographic exclusion area, and at the written request of the applicant, the Negotiable Certificate shall be "drawn down" by the amount required for each transfer, and a new Negotiable Certificate, endorsed by the applicant, shall be issued for each transfer. Application for the benefits of the Act must be accompanied by the original Negotiable Certificate and a copy of the Certificate of Completion.
(n) Governmental assistance to affordable units.
(1) Affordable units created pursuant to 28 RCNY § 6-08(b) may not be the recipient of any other as-of-right or discretionary government benefit, consideration or assistance, excluding tax exempt financing, federal low income housing tax credits, and real estate tax benefits enumerated in paragraph (3) of this subdivision (n).
(2) Affordable units created to satisfy the low and moderate income housing requirements of any other governmental benefit, consideration or assistance except tax exempt financing, federal low income housing tax credits, and real estate tax benefits enumerated in paragraph (3) of this subdivision (n) shall not be considered as being created to satisfy the requirements of this section. Units created pursuant to 28 RCNY § 6-08(b)(i) shall not also qualify as affordable units under this section.
(3) In order to qualify a multiple dwelling located within the geographic exclusion area for benefits under the Act, affordable units created by rehabilitation or conversion must receive a Certificate of Eligibility for the benefits of § 11-243 or 11-244 of the Administrative Code or § 421-g of the Real Property Tax Law, and affordable units created by new construction must receive a Certificate of Eligibility for the benefits of the Act, unless such units obtain tax exemption pursuant to § 420-a or 420-b of the Real Property Tax Law, § 696 of the General Municipal Law, or § 577 of the Private Housing Finance Law.
(4) Affordable units created pursuant to 28 RCNY § 6-08(b)(2) through (b)(5) of these rules may not be used, or have been used, to satisfy a requirement to create low or moderate income housing imposed by a federal, state, or local agency or instrumentality or pursuant to a court or administrative order or decree (unless such requirement is imposed solely as a condition to receiving bond financing or federal low income housing tax credits for the property containing the affordable units).
(5) Notwithstanding anything to the contrary contained in this subdivision, affordable units created to satisfy the requirements of the inclusionary housing program established pursuant to the New York City Zoning Resolution may be used to qualify a multiple dwelling in the geographic exclusion area for the benefits of the Act provided that (i) at least twenty percent (20%) of the units contained in the multiple dwelling applying for such benefits are affordable to persons of low and moderate income as defined by this chapter, and (ii) such affordable units only generate floor area compensation for a compensated development on either (a) the same zoning lot as such affordable units, or (b) within a development site on which such affordable units are located where such development site involves several zoning lots that were reviewed and approved as a single unit pursuant to the New York City Zoning Resolution. For purposes of this paragraph (5), "floor area compensation" and "compensated development" shall have the meanings set forth in Section 23-911 of the New York City Zoning Resolution.
(o) Mortgage and debt limitations.
(1) In the case of a project which qualifies for tax benefits pursuant to 28 RCNY § 6-08(b)(1), any lien or mortgage encumbering one or more low and moderate income units in such project shall expressly provide that it is subject and subordinate to the Written Agreement imposing the restrictions required by this 28 RCNY § 6-08, commencing upon issuance of a Final Certificate of Eligibility for such tax benefits.
(2) Projects undertaken pursuant to either 28 RCNY § 6-08(b)(4)(i), (b)(4)(ii), or (b)(4)(iii) may be encumbered with a lien or mortgage, provided the amount of debt placed on the project permits rents for such units to comply with the provisions of 28 RCNY § 6-08(i) and such lien or mortgage expressly provides that it is subject and subordinate to the Written Agreement.
(Amended City Record 11/29/2017, eff. 12/29/2017)
(a) Definitions. For purposes of this 28 RCNY § 6-09, the following terms shall have the following meanings:
Affordability requirement. "Affordability requirement" shall mean that not less than twenty percent of the onsite units in such multiple dwelling are GEA 60% AMI units or GEA SGA units.
Applicable deadline. "Applicable Deadline" shall mean, unless otherwise exempted pursuant to the Act, (a) with respect to a multiple dwelling within the Geographic Exclusion Area, June 30, 2008, (b) with respect to the limitations on benefits imposed pursuant to paragraph five of subdivision b of this section, December 27, 2007, (c) with respect to the limitations on benefits imposed pursuant to paragraph six of subdivision b of this section, June 30, 2008, except for multiple dwellings that purchase negotiable certificates generated by a Written Agreement with the Department entered into prior to December 28, 2006, and (d) with respect to the limitations on benefits imposed pursuant to paragraph six of subdivision b of this section, for multiple dwellings that purchase negotiable certificates generated by a Written Agreement with the Department entered into prior to December 28, 2006, June 30, 2009.
Building segment. "Building segment" shall have the meaning set forth in Section 12-10 of the Zoning Resolution.
Commence. "Commence" shall mean:
(a) (1) the later to occur of (i) the date upon which a new metal or concrete structure to be incorporated into the multiple dwelling that shall perform a load bearing function for such multiple dwelling is installed; or (ii) the date upon which a building or alteration permit for the multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department; or
(2) if a project includes new residential construction and the concurrent conversion, alteration or improvement of a pre-existing building or structure, the later to occur of (i) the date upon which the actual construction of the conversion, alteration or improvement of the pre-existing building or structure begins; or (ii) the date upon which an alteration permit for the multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) on which the actual construction of the conversion, alteration or improvement takes place, was issued by such department;
(b) provided, however, that
(1) with respect to subparagraph (1) of paragraph (a), if piles or caissons are required, "commence" shall mean the later to occur of (i) the date upon which at least one fully driven pile or caisson is installed; or (ii) the date upon which a building or alteration permit for the multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department; and
(2) with respect to both subparagraphs (1) and (2) of paragraph (a):
(i) such installation of a new metal or concrete structure or such beginning of the actual construction of the conversion, alteration or improvement of the pre-existing building or structure, respectively, and such issuance of a building or alteration permit, must both have occurred in order for the multiple dwelling to meet this definition of "commence" and
(ii) for multibuilding projects, each multiple dwelling in such multibuilding project shall be deemed to "commence" (A) with respect to subparagraph (1) of paragraph (a), on the later to occur of (1) the date upon which a new metal or concrete structure to be incorporated into the first multiple dwelling in such multibuilding project that shall perform a load bearing function for such multiple dwelling is installed; or (2) the date upon which a building or alteration permit for the first multiple dwelling in such multibuilding project (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department, provided that all of the multiple dwellings in such multibuilding project have been issued by the Department of Buildings a building or alteration permit (based upon architectural and structural plans approved by such department) on or before the applicable deadline, and the periods of construction and final real property tax exemption benefits granted pursuant to the Act shall commence simultaneously for all of the multiple dwellings in such multibuilding project; and (B) with respect to subparagraph (2) of paragraph (a), on the later to occur of (1) the date upon which the actual construction of the conversion, alteration or improvement of the first pre-existing building or structure in such multibuilding project begins; or (2) the date upon which an alteration permit for the first multiple dwelling in such multibuilding project (based upon architectural and structural plans approved by the Department of Buildings) on which the actual construction of the conversion, alteration or improvement takes place, was issued by such department, provided that all of the multiple dwellings in such multibuilding project have been issued by the Department of Buildings a building or alteration permit (based upon architectural and structural plans approved by such department) on or before the applicable deadline, and the periods of construction and final real property tax exemption benefits granted pursuant to the Act shall commence simultaneously for all of the multiple dwellings in such multibuilding project; and
(iii) for any multiple dwelling that was not located in the GEA on or before the Applicable Deadline, but is located in the GEA after the Applicable Deadline, or for any multiple dwelling that would not have been subject to the exemption cap pursuant to the provisions of subdivision 9 of the Act on or before the Applicable Deadline, but would be subject to such exemption cap after the Applicable Deadline, if the architectural and structural plans approved by the Department of Buildings in conjunction with the issuance of the first such building or alteration permit for such multiple dwelling are thereafter amended to provide for more than a thirty-five percent (35%) increase (the "35% standard") in the floor area, as defined pursuant to the Zoning Resolution, of such multiple dwelling, the construction of such multiple dwelling shall be deemed to have commenced on the date upon which such amended plans are approved by such department, provided, however, that, the amendments to this clause (iii) that were adopted on March 26, 2015 shall only apply to multiple dwellings whose applications for a Preliminary Certificate of Eligibility are approved by the Department on or after May 1, 2014; and
(iv) the construction of any such multiple dwelling also must be completed without undue delay. For purposes of this definition of "commence,":
(1) for any application for a Preliminary Certificate of Eligibility that is filed no later than June 24, 2012, or that is filed with respect to a project that was the subject of mortgage foreclosure proceedings or other lien enforcement litigation by a lender on or before June 24, 2012: (A) if a project consists of one multiple dwelling and such multiple dwelling is completed within seventy-two (72) months from the later to occur of (1) the date of the installation of a new metal or concrete structure or of the beginning of the actual construction of the conversion, alteration or improvement of the pre-existing building or structure, respectively, (2) the date upon which a building or alteration permit for the multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department, or (3) December 28, 2007, such multiple dwelling shall be deemed to have been completed without undue delay, and (B) if a project meets the requirements of clause (ii) of this paragraph (2), if all of the multiple dwellings in such multibuilding project are completed within seventy-two (72) months from the later to occur of (1) the date of the installation of a new metal or concrete structure for the first multiple dwelling in such multibuilding project or of the beginning of the actual construction of the conversion, alteration or improvement of the first pre-existing building or structure in such multibuilding project, respectively, (2) the date upon which a building or alteration permit for the first multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department, or (3) December 28, 2007, all of the multiple dwellings in such multibuilding project shall be deemed to have been completed without undue delay. Where construction is not completed within such seventy-two (72) month period and an architect or professional engineer has certified that such construction was completed without undue delay, the Department will not merely rely on such certification. In order to determine whether such construction was, in fact, completed without undue delay, the Department will consider the following factors: (i) the extraordinary size and/or complexity of the construction project; (ii) strikes or other unavoidable labor stoppages of substantial duration and severity; (iii) industry-wide shortages of construction materials of substantial duration and severity; (iv) substantial damage to completed construction work caused by fire or other casualty, and (v) mortgage foreclosure proceedings or other lien enforcement litigation by a lender with regard to such project. In each case, the Department will consider such factors and determine whether construction could reasonably have been completed in a materially shorter period of time.
(2) for any application for a Preliminary Certificate of Eligibility that is filed after June 24, 2012, and that is not filed with respect to a project that was the subject of mortgage foreclosure proceedings or other lien enforcement litigation by a lender on or before June 24, 2012: (A) if a project consists of one multiple dwelling and such multiple dwelling is completed within thirty-six (36) months from the later to occur of (1) the date of the installation of a new metal or concrete structure or of the beginning of the actual construction of the conversion, alteration or improvement of the pre-existing building or structure, respectively, (2) the date upon which a building or alteration permit for the multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department, or (3) December 28, 2007, such multiple dwelling shall be deemed to have been completed without undue delay, and (B) if a project meets the requirements of clause (ii) of this paragraph (2), if all of the multiple dwellings in such multibuilding project are completed within thirty-six (36) months from the later to occur of (1) the date of the installation of a new metal or concrete structure for the first multiple dwelling in such multibuilding project or of the beginning of the actual construction of the conversion, alteration or improvement of the first pre-existing building or structure in such multibuilding project, respectively, (2) the date upon which a building or alteration permit for the first multiple dwelling (based upon architectural and structural plans approved by the Department of Buildings) was issued by such department, or (3) December 28, 2007, all of the multiple dwellings in such multibuilding project shall be deemed to have been completed without undue delay.
(3) Notwithstanding anything to the contrary contained herein, if a multiple dwelling meets the affordability requirement or is located outside of the GEA, such multiple dwelling shall be deemed to have been completed without undue delay.
(c) Where it is determined in accordance with this definition of "commence" that a multiple dwelling commenced construction on or after December 28, 2007 with respect to paragraph five of subdivision (b) of this section or July 1, 2008 with respect to paragraphs one, three or six of subdivision (b) of this section, respectively, this definition of "commence" shall supersede the definition of "commencement of construction" contained in 28 RCNY § 6-01.
Commercial space. "Commercial space" shall mean any space within a building that is devoted to commercial, community facility or other non-residential use.
Common area. "Common area" shall mean any space within a building to which the residents of two or more dwelling units have access without paying a usage fee and that is not located in a dwelling unit, in a commercial space or in a service area.
Common charges or carrying charges. "Common charges or carrying charges" shall mean the estimated amounts contained in the offering plan accepted by the office of the Attorney General of the State of New York for filing.
Contract Rents. "Contract Rents" shall mean the rent approved by the United States Department of Housing and Urban Development for dwelling units in a project with a HAP Contract.
Geographic exclusion area or GEA. "Geographic exclusion area" or "GEA" shall mean the boundaries for any geographic exclusion areas set forth in § 421-a of the Real Property Tax Law and § 11-245 of the Administrative Code that are effective on or after July 1, 2008.
GEA 60% limit. "GEA 60% limit" shall mean (A) for a multiple dwelling owned and operated as a rental, (1) incomes at the time of initial occupancy that do not exceed sixty percent of the area median incomes adjusted for family size, and (2) rents at the time of initial occupancy that do not exceed thirty percent of sixty percent of the area median incomes adjusted for family size, minus the amount of any applicable utility allowance, and (B) for a multiple dwelling owned and operated as a condominium or cooperative development by individual condominium unit owners or shareholders, (1) incomes at the time of initial occupancy that do not exceed sixty percent of the area median incomes adjusted for family size, and (2) sales prices at the time of initial sales that result in mortgage payments, including both principal and interest calculated at the prevailing rate and assuming that the mortgage constitutes 90% of the purchase price, and common charges or carrying charges, respectively, that collectively do not exceed thirty percent of sixty percent of the area median incomes adjusted for family size.
GEA SGA limit. "GEA SGA limit" shall mean (A) for a multiple dwelling owned and operated as a rental, (1) incomes at the time of initial occupancy that do not exceed one hundred twenty percent of the area median incomes adjusted for family size and, where such a multiple dwelling contains more than twenty-five units, incomes at the time of initial occupancy that do not exceed an average of ninety percent of the area median incomes adjusted for family size, and (2) rents at the time of initial occupancy that do not exceed thirty percent of one hundred twenty percent of the area median incomes adjusted for family size, minus the amount of any applicable utility allowance, and, where such a multiple dwelling contains more than twenty-five units, rents at the time of initial occupancy that do not exceed an average of thirty percent of ninety percent of the area median incomes adjusted for family size, minus the amount of any applicable utility allowance, or (B) for a multiple dwelling owned and operated as a condominium or cooperative development by individual condominium unit owners or shareholders, (1) incomes at the time of initial occupancy that do not exceed one hundred twenty-five percent of the area median incomes adjusted for family size, and (2) sales prices at the time of initial sales that result in mortgage payments, including both principal and interest calculated at the prevailing rate and assuming that the mortgage constitutes 90% of the purchase price, and common charges or carrying charges, respectively, that collectively do not exceed thirty percent of one hundred twenty-five percent of the area median incomes adjusted for family size.
GEA 60% AMI unit. "GEA 60% AMI unit" shall mean (A) if a multiple dwelling is owned and operated as a rental, a unit that, upon its initial rental and upon all subsequent rentals of the unit after a vacancy, complies with the GEA 60% limit, or (B) if a multiple dwelling is owned and operated as a condominium or cooperative development by individual condominium unit owners or shareholders, a unit that, upon the initial sale of such unit, complies with the GEA 60% limit.
GEA SGA unit. "GEA SGA unit" shall mean (A) if a multiple dwelling is owned and operated as a rental, a unit that, upon its initial rental and upon all subsequent rentals of the unit after a vacancy, complies with the GEA SGA limit, or (B) if a multiple dwelling is owned and operated as a condominium or cooperative development by individual condominium unit owners or shareholders, a unit that, upon the initial sale of such unit, complies with the GEA SGA limit.
HAP Contract. "HAP Contract" shall mean any project-based Section 8 housing assistance payments contract, governed by Subpart E of part 983 of Chapter IX of Subtitle B of Title 24 of the Code of Federal Regulations, covering units in the multiple dwelling, as may be amended or renewed.
Multibuilding project. "Multibuilding project" shall mean a project that consists of more than one multiple dwelling where the multiple dwellings are located inside the GEA, do not meet the affordability requirement, are contiguous and are under common ownership. For purposes of this definition of "multibuilding project", multiple dwellings shall be deemed to be (a) "contiguous" if such multiple dwellings are on tax lots that (1) are adjacent for at least ten linear feet, or, (2) but for the intervention of streets or street intersections, would be adjacent for at least ten linear feet and front the same street or intersection, and (b) "under common ownership" if at the date of commencement of construction, each of the multiple dwellings in such multibuilding project is owned and/or controlled directly or indirectly by the same individual or entity.
Onsite. "Onsite" shall mean situated within a building or buildings on the same zoning lot, or, if only a portion of such zoning lot is being granted benefits pursuant to the Act, situated within a building or buildings on such portion of such zoning lot; provided, however, that (1) each of the buildings on such zoning lot or portion thereof is part of the same application for benefits pursuant to the Act, (2) the periods of construction and final real property tax exemption benefits granted pursuant to the Act for all of the buildings on such zoning lot or portion thereof being granted benefits pursuant to the Act shall commence simultaneously, and (3) no final real property tax exemption benefits shall be granted pursuant to the Act for any of the buildings on such zoning lot or any portion thereof being granted benefits pursuant to the Act until receipt of a certificate of occupancy or a temporary certificate of occupancy for the residential portions of the building or buildings on such zoning lot containing the GEA 60% AMI units and/or the GEA SGA units.
Party in interest. "Party in interest" shall mean any person or entity holding an ownership, ground lease, mortgage, or other security interest, or holding any other interest which may be converted to such interest, in the real property containing the multiple dwelling receiving the benefits pursuant to the Act.
Prevailing rate. "Prevailing rate" shall mean the single family mortgage rate for a thirty-year fixed rate loan established by the Federal Home Loan Mortgage Association and the Federal National Mortgage Association that is either (1) for purposes of the application for a Preliminary Certificate of Eligibility, quoted for the month in which the construction of such multiple dwelling commences, or (2) for purposes of the application for a Final Certificate of Eligibility, quoted for the month in which the first certificate of occupancy or temporary certificate of occupancy for the first unit in such multiple dwelling that is owned and operated as a condominium or cooperative development by individual condominium unit owners or shareholders, is issued.
Section 8. "Section 8" shall mean a federal rental subsidy pursuant to the Section 8 project-based rental assistance program, or any successor programs under the United States Housing Act of 1937, as amended.
Service area. "Service area" shall mean any space within a building that is utilized by the owner or manager of such building, and their respective employees, for purposes of building administration, and to which residential tenants do not normally have access.
Story. "Story" shall have the meaning set forth in Section 12-10 of the Zoning Resolution.
Utility allowance. "Utility allowance" shall mean an allowance set forth by the Department for the payment of utilities where the tenant of a GEA 60% AMI unit or a GEA SGA unit is required to pay all or a portion of the utility costs with respect to such unit in addition to any payments of rent.
(b) Multiple Dwellings Affected.
(1) Unless otherwise exempted pursuant to the Act, a multiple dwelling within the geographic exclusion area that commences construction on or after July 1, 2008 and which would otherwise be eligible for the benefits of the Act, is only eligible if:
(i) not less than twenty percent of the onsite units in such multiple dwelling are GEA 60% AMI units marketed by the Department pursuant to a fair and open process in accordance with the Department's marketing guidelines; or
(ii) the construction of such multiple dwelling is carried out with substantial governmental assistance provided pursuant to a program for the development of affordable housing and not less than twenty percent of the onsite units in such multiple dwelling are GEA SGA units; or
(iii) such multiple dwelling has purchased negotiable certificates in order to entitle it to the benefits of the Act for a specified number of units in the geographic exclusion area; provided, however, that such negotiable certificates were generated by a Written Agreement with the Department entered into prior to December 28, 2007 pursuant to 28 RCNY § 6-08(b)(4).
(2) For thirty-five years from the completion of construction, all GEA 60% AMI units and GEA SGA units in multiple dwellings must (i) if they are owned and operated as rentals, remain rent stabilized and allow tenants holding a lease and in occupancy at the expiration of such thirty-five year period to remain as rent stabilized tenants for the duration of their occupancy, (ii) comply with the affordability requirement, and (iii) upon the renewal of leases or at any time during the term of the lease, be rented to existing tenants for the lesser of (A) the rents permitted under the Rent Stabilization Law of 1969 and the Emergency Tenant Protection Act of 1974 and all regulations promulgated in connection thereto (collectively, "Rent Stabilization Laws"), or (B) 30% of the applicable income limit for such GEA 60% AMI unit or GEA SGA unit, respectively, minus the amount of any applicable utility allowance, provided, however, that no increase authorized pursuant to 28 RCNY § 6-04(b) and no exemption or exclusion from any requirement of the Rent Stabilization Laws, including, but not limited to, any exemption or exclusion from the rent limits, renewal lease requirements, registration requirements, or other provisions of the Rent Stabilization Laws due to (a) the vacancy of a unit where the rent exceeds a prescribed maximum amount, (b) the fact that tenant income and/or unit rent exceed prescribed maximum amounts, (c) the nature of the tenant, or (d) any other factor, may be applied to any such GEA 60% AMI unit or GEA SGA unit during such thirty-five year period. Furthermore, the lease for each such unit owned and operated as a rental and for the renewal thereof must contain a notice in at least twelve (12) point type stating the approximate date on which such thirty-five year period is expected to expire and informing such tenant that after such thirty-five year period, (i) the unit will no longer have to comply with the affordability requirement and (ii) if the tenant is holding a lease and in occupancy at the expiration of such thirty-five year period, such tenant shall have the right to remain as a rent stabilized tenant for the duration of such tenant's occupancy. The rent stabilization and lease rider requirements contained in 28 RCNY § 6-02(g) shall continue to apply to the multiple dwellings owned and operated as a rental containing such GEA 60% AMI units or GEA SGA units to the extent that they do not conflict with this paragraph.
(2-a) (i) Notwithstanding anything to the contrary contained in this section, rents for GEA 60% AMI units or GEA SGA units in multiple dwellings that are subject to a HAP Contract may exceed 30% of the applicable income limit for such GEA 60% AMI units or GEA SGA units, at initial occupancy and upon renewal of leases, if
(A) such rents do not exceed one hundred twenty percent of the Contract Rents for such units,
(B) such rents, less any rent subsidies pursuant to Section 8 of the United States Housing Act of 1937, do not exceed the lesser of (1) the GEA 60% limit or the GEA SGA limit, as applicable, or (2) the tenant's maximum payment allowed under the HAP Contract, and
(C) at least twenty percent (20%) of the GEA 60% AMI units or GEA SGA units, as applicable, in such multiple dwellings that are first rented to tenants on or after the effective date of this rule amendment either for initial occupancy or for re-rental upon a vacancy, are rented through referrals from the City of homeless households who meet the applicable income requirements and other eligibility criteria permitted by the marketing guidelines of the Department.
(ii) Each year, upon annual registration of its rental dwelling units with the New York State Department of Housing and Community Renewal, the owner of a multiple dwelling subject to subparagraph (i) of this paragraph must file with the Department an affidavit in a form approved by the Department attesting that each lease of a GEA 60% AMI unit or GEA SGA unit, or renewal thereof, during the preceding year complied with the applicable rent requirements under subparagraph (i) of this paragraph at the time of execution of the lease, or renewal thereof, and providing other information regarding the leases for such units as the Department shall require in such affidavit.
(iii) Subparagraph (i) of this paragraph shall only apply during the term of such multiple dwelling's HAP Contract.
(3) Unless otherwise exempted pursuant to the Act, the owner of a multiple dwelling that is located within the geographic exclusion area and that commences construction on or after July 1, 2008:
(i) when filing an application for a Preliminary Certificate of Eligibility pursuant to 28 RCNY § 6-05(b), must submit (A) written certification that it meets the affordability requirement, or (B) if such multiple dwelling is qualifying for benefits pursuant to subparagraph (iii) of paragraph (2) of this subdivision, and subject to the provisions contained in 28 RCNY § 6-08(m)(1), submit either (a) a copy of a Written Agreement with the Department for the construction or substantial rehabilitation of housing units affordable to persons of low and moderate income on another site that meet the requirements of 28 RCNY § 6-08, or (b) the negotiable certificates issued pursuant to 28 RCNY § 6-08, evidencing the bearer's entitlement to the benefits of the Act for the units for which the owner is seeking tax benefits.
(ii) when filing an application for a Preliminary Certificate of Eligibility pursuant to 28 RCNY § 6-05(b) for a multiple dwelling that contains GEA 60% AMI units or GEA SGA units, submit evidence satisfactory to the Office that a restrictive declaration in a form satisfactory to the Office (A) has been executed by all parties in interest, (B) has been recorded against the real property containing the multiple dwelling receiving benefits pursuant to the Act, and (C) provides that the GEA 60% AMI units or the GEA SGA units in such building must for thirty-five years from the completion of construction (1) comply with the affordability requirement, (2) if such multiple dwelling is owned and operated as a rental, remain rent stabilized and allow tenants holding a lease and in occupancy at the expiration of such thirty-five year period to remain as rent stabilized tenants for the duration of their occupancy, and (3) if applicable, comply with the provisions of paragraph 2-a of this subdivision.
(iii) when filing an application for a Final Certificate of Eligibility pursuant to 28 RCNY § 6-05(d) for a multiple dwelling that contains GEA 60% AMI units or GEA SGA units, submit an affidavit from the owner containing such information as the Department may require to certify that such units will be marketed pursuant to a fair and open process in accordance with the marketing guidelines of the Department or of another federal, state or local agency or instrumentality, and that (A) if the units will be marketed in accordance with the marketing guidelines of another federal, state or local agency or instrumentality, the owner has informed such agency or instrumentality of the requirement that residents of the community board where the multiple dwelling for which benefits are being granted pursuant to the Act is located shall, upon initial occupancy, have priority for the purchase or rental of 50% of the GEA 60% AMI units or 50% of the GEA SGA units, respectively, unless the community priority requirement is preempted by federal requirements, and (B) either (1) residents of the community board where the multiple dwelling for which benefits are being granted pursuant to the Act is located shall, upon initial occupancy, have priority for the purchase or rental of 50% of the GEA 60% AMI units or 50% of the GEA SGA units, respectively, or (2) such multiple dwelling does not have to comply with such community priority requirement because the community priority requirement is preempted by federal requirements that such owner has specified in such affidavit.
(iv) in addition to the record keeping requirements contained in 28 RCNY § 6-07, must retain all books, records and documents relating to the GEA 60% AMI units or GEA SGA units, including an annual schedule of rents for each such rental unit for thirty-five years from the completion of construction of such multiple dwelling, and a schedule of the initial sales prices for each such home ownership unit for six years from the completion of construction of such multiple dwelling, and make them available for inspection by the Department.
(4) For all multiple dwellings that commence construction on or after June 15, 2015, and on or before December 31, 2015, as determined pursuant to the definition of "commence" contained in §§ 421-a (2)(a)(iv)(A) and 421-a(2)(c)(ii) of the Real Property Tax Law, and that receive their first temporary or permanent certificate of occupancy covering all residential areas on or before December 31, 2019:
(i) If a story contains one or more GEA 60% AMI units or GEA SGA units, not less than thirty percent of the dwelling units on such story shall be units that are neither GEA 60% AMI units nor GEA SGA units, provided, however, that the Department may waive such requirement where either (A) the GEA 60% AMI units and GEA SGA units comprise more than fifty percent of the units in a multiple dwelling, or (B) there is only one dwelling unit on a story in a multiple dwelling;
(ii) Every building segment in a multiple dwelling must contain one or more GEA 60% AMI units or GEA SGA units; and
(iii) All common areas in a multiple dwelling shall be open and accessible to the residents of all of the dwelling units in such multiple dwelling, including the residents of GEA 60% AMI units and GEA SGA units.
(5) Unless otherwise exempted pursuant to the Act, any multiple dwelling that commences construction on or after December 28, 2007 and which would otherwise be eligible for the benefits of the Act, is only eligible if:
(i) such multiple dwelling contains at least four dwelling units as set forth in the certificate of occupancy, unless the construction of such multiple dwelling is carried out with substantial governmental assistance provided pursuant to a program for the development of affordable housing; and
(ii) if such new multiple dwelling is situated in (a) a Neighborhood Preservation Program Area as determined by the Department as of June 1, 1985, or (b) a Neighborhood Preservation Area as determined by the New York City Planning Commission as of June 1, 1985, or (c) an area that was eligible for mortgage insurance provided by the Rehabilitation Mortgage Insurance Corporation (REMIC) as of May 1, 1992, or (d) an area receiving funding for a neighborhood preservation project pursuant to the Neighborhood Reinvestment Corporation Act (42 U.S.C. §§ 8101 et seq.) as of June 1, 1985, such new multiple dwelling shall no longer be eligible for the benefits available pursuant to § 421-a(2)(a)(iii) of the Act unless either (a) the construction is carried out with substantial governmental assistance provided pursuant to a program for the development of affordable housing, or (b) the Department has imposed a requirement or has certified that at least twenty percent of the onsite units in such multiple dwelling are affordable to and occupied by or affordable to and available for occupancy by individuals or families whose incomes at the time of initial occupancy do not exceed eighty percent of the area median incomes adjusted for family size, provided, however, that of such units, no more than a number equal to five percent of the number of units which commenced construction in buildings receiving tax benefits pursuant to the Act in the previous calendar year shall be affordable to and occupied by or affordable to and available for occupancy by individuals or families whose incomes at the time of initial occupancy are between sixty percent and eighty percent of the area median incomes adjusted for family size.
(6) Unless otherwise exempted pursuant to the Act, any multiple dwelling that commences construction on or after July 1, 2008 and which would otherwise be eligible for benefits pursuant to the Act, shall be subject to the provisions of subdivision 9 of the Act imposing an exemption cap on such multiple dwelling.
(7) Eligible multiple dwellings that meet the requirements of paragraphs (1) or (5) (ii) of this subdivision (b) may receive a ten, fifteen, twenty or twenty-five year tax exemption, as described herein. In order to qualify for such benefits, the multiple dwelling must meet the eligibility requirements described below for each level of exemption.
(i) Only the ten year exemption is available to multiple dwellings located in Manhattan on tax lots now existing or hereafter created south of or adjacent to either side of 110th street if such multiple dwelling meets the requirements of subparagraph (iii) of paragraph (1) of this subdivision (b).
(ii) Only the fifteen year exemption is available to multiple dwellings located in the boroughs of the Bronx, Brooklyn, Queens, Staten Island and in Manhattan north of 110th Street if such multiple dwelling meets the requirements of subparagraph (iii) of paragraph (1) of this subdivision (b).
(iii) The twenty year exemption is available in the borough of Manhattan for buildings on tax lots now existing or hereafter created south of or adjacent to either side of one hundred tenth street only if such multiple dwelling meets the requirements of subparagraph (i) or (ii) of paragraph (1) of this subdivision (b) or the requirements of subparagraph (ii) of paragraph (5) of this subdivision (b).
(iv) The twenty-five year exemption is available to multiple dwellings located in the boroughs of the Bronx, Brooklyn, Queens, Staten Island or Manhattan north of 110th Street only if such multiple dwelling meets the requirements of subparagraph (i) or (ii) of paragraph (1) of this subdivision (b) or the requirements of subparagraph (ii) of paragraph (5) of this subdivision (b).
(Amended City Record 4/27/2016, eff. 5/27/2016; amended City Record 4/14/2017, eff. 5/14/2017; amended City Record 3/30/2018, eff. 4/29/2018)
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