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(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)
Except as otherwise specifically provided therein, the amendments to this chapter six that became effective on June 19, 2008, shall only apply to multiple dwellings that commence construction on or after July 1, 2008. For purposes of determining when any such multiple dwelling has commenced construction, the definition of "commence" in such amendments shall apply and, where it is determined that such multiple dwelling commenced construction on or after July 1, 2008, the definition of "commence" in such amendments shall supersede the definition of "commencement of construction" contained in 28 RCNY § 6-01.
Appendix A:
Annual Schedule of Reasonable Costs
Annual Schedule of Reasonable Costs
(a) Construction costs. The construction cost component of the Total Project Cost, excluding land acquisition costs, site preparation costs, and off-site costs, shall be determined by the use of the latest available Calculator Valuation Guide, published by Calculator Inc., or a comparable publication designated by the Office. Applicants whose construction costs include unique and special costs and are therefore at variance with the Calculator Valuation Guide will be required to produce detailed documentation establishing these costs. Except in cases where such unique costs are approved, the Construction Costs Allowance will be limited to the maximum established by the Calculator Valuation Guide, minus the Builder's Fee.
(b) Off-site and other costs. In recognition of the fact that off-site costs, including but not limited to legal, engineering, and architectural fees, insurance, interest and taxes during construction, and title and mortgage fees, may vary greatly with the size of a project, these costs as well as such other amounts as are ordinarily incurred in connection with the construction, conversion or rehabilitation of a multiple dwelling, will be reviewed and analyzed independently with respect to each building.
(c) Operating and maintenance schedule.
(1) Real estate taxes. Projected real estate taxes shall equal the actual assessed value of the property in the tax year prior to the start of construction multiplied by the projected tax rate for the tax year in which completion is expected. The projected tax rate shall be determined by increasing the current tax rate at the time the application is received by 5 percent for each year between such current year and the projected year of completion.
(2) Replacement reserve. The replacement reserve shall equal six-tenths of 1 percent of construction costs approved pursuant to item (a) of the Annual Schedule of Reasonable Costs.
(3) Other operating and maintenance expense maximum allowances. The schedule of maximum allowances listed below shall apply except when the schedule amounts for each commodity shall be increased or decreased on a compounded annual basis for each year between publication of these rules and the year of projected project completion based upon the Price Indices of Operating Costs (PIOC) percentages published annually by the Rent Guidelines Board for each commodity. For the purposes of projecting future allowances in years for which the PIOC is not available, the Office will apply the percentage for the most recent year for which the Index is available for each subsequent year prior to the estimated completion date. The office will allow the lesser of the owner's claimed costs and the maximum allowance listed below for each commodity.
Schedule Maximum Allowances for Other Operating and Maintenance Expenses
Commodity1 | Maximum Per Room Annual Allowance | Maximum Per Room Monthly Allowance |
Labor2 | $273.00 | $22.75 |
Fuel | $105.00 | $8.75 |
Utilities | XXXX | XXXX |
Water and Sewer | $96.00 | $8.00 |
Gas3 | $36.00 | $3.00 |
Electricity4 | $36.00 | $3.00 |
Other | $6.00 | $0.50 |
Contractor Services | $141.00 | $11.75 |
Insurance | $60.00 | $5.00 |
Parts and Supplies | $30.00 | $2.50 |
1. Categories are defined as specified by the Price Index of Operating Costs published by the Rent Guidelines Board.
2. To qualify for a Labor allowance, applicants must submit a list of all personnel to be employed in the maintenance and operation of each building along with corresponding projected wage and salary data. Projects with five units or less are not eligible for the Labor allowance.
3. Available only when the owner pays apartment gas bills.
4. Does not include electricity within apartments.
(d) Vacancy reserve and management and administration fee. The vacancy reserve allowance and the management and administration fee shall together be equal to 9 percent of the sum of the expenses determined pursuant to 28 RCNY §§ 6-04(a)(1)(i), (iii), and (iv) less the amount determined pursuant to 28 RCNY § 6-04(a)(1)(v).
(e) Room calculation. For purposes of this Appendix A's schedule of maximum allowances, the number of rooms shall be calculated in accordance with the definition of "room count" contained in subdivision (c) of 28 RCNY § 6-01.