SECURING 421-A(16) TAX EXEMPTION ELIGIBILITY by Anna Martynova, City5
As a part of the proposed 2023 FY budget, New York State Governor Kathy Hochul released the details about the new program called Affordable Neighborhoods for New Yorkers (“ANNY”). The program is proposed to replace the existing 421-a(16) Tax Exemption that is approaching a sunset date on June 15, 2022. Although the deadline is only a few months away there is still time for new projects to secure eligibility for the program.
ANNA MARTYNOVA
CONSTRUCTION COMMENCEMENT DEADLINE
PROJECTS APPLYING FOR INCLUSIONARY HOUSING (IH)
Per 421-a(16) Tax Exemption requirements, construction for
Projects opting in to Inclusionary Housing Program do not
eligible multiple dwellings must commence on or before
require approval from the IH unit to receive an SOE and/
June 15, 2022.
or foundation permit. Nonetheless, we strongly encourage
Construction commencement would be considered the date upon which excavation and construction of initial footings and foundations lawfully begins or, for an eligible conversion, the date upon which the actual construction
documenting construction commencement with photos and/or special inspection report to avoid any potential challenges that the Agency could raise in regards to construction commencement date in the future.
of the conversion, alteration, or improvement of the preexisting building or structure lawfully begins.
ELIGIBLE DOB PERMITS
THE NEW PROGRAM AFFORDABLE NEIGHBORHOODS FOR NEW YORKERS (“ANNY”)
A project could meet 421-a(16) construction commencement deadline if it receives one of the following permits and commences work on or before June 15, 2022:
The new program is proposed to be available for the projects
1.
New Building (NB) permit;
that did not receive 421-a(16) Tax Exemption benefits and
2.
Alteration Type 1 (ALT 1) permit;
3.
Alteration Type 2 (ALT 2) permit issued in conjunction with an NB, Foundation permit (FO), or ALT 1 permit (if the permits are issued under the same job number);
4.
commencing construction between June 15, 2022, and June 15, 2027. Please note that the program is subject to further approval by the Senate and Assembly. Although it’s possible the conversions from the old program to the new one would
Foundation permit (FO) issued earlier than either an NB or ALT 1 permit issued under:
be allowed, it is safer to ensure your projects are eligible
• the same job number as NB or ALT 1 permit
offering higher rents for affordable units. It is currently not
• a different job number that indicates the FO permit
for the existing 421-a(16) Tax Exemption program that is clear if ANNY program will be passed as proposed.
is being issued in conjunction with said NB or ALT 1 permit
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