January 21, 2022
Co-op and Condos Alert
New York Governor proposes new 421-a property tax incentive program with an emphasis on affordable homeownership.
On January 18, 2022, New York State Governor Kathy Hochul announced a proposal, as part of the 2023 New York State Executive Budget, to replace the existing Affordable New York (421-a) property tax incentive program with a new program to be known as the “Affordable Neighborhoods for New Yorkers” or “ANNY.” If passed by the New York State Legislature, ANNY would be introduced into law as Section 485-w of the New York Real Property Law.
In addition to deeper and longer affordability for rentals, Option C under ANNY provides a robust exemption to incentivize the development of affordable homeownership. Key features of the homeownership option of ANNY are as follows:
ANNY provides another much-needed tax incentive to support the development of affordable homeownership, especially at a time when lenders have tightened lending requirements for coop purchases. Therefore, ANNY may serve as the missing tool to increase the development of affordable condominiums, by providing for an as-of-right exemption. To date, developers of affordable homeownership have primarily used Article XI under Section 577 of the New York Private Housing Finance Law, which is available for coops formed as housing development fund corporations.Nixon Peabody will continue to monitor the ANNY proposal as it makes its way through the legislature and continually advise and update developers on the future of the 421-a tax incentive program.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.
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