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(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)
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