The Real Deal New York

Landlords accused of violating 421a rules would’ve paid $304M in property taxes this year

Officials sent out warning notices to another 3,000 buildings
December 06, 2016 10:10AM

From left: Vicki Been, Bill de Blasio and Jacques Jiha

From left: Vicki Been, Bill de Blasio and NYC Commissioner of Finance Jacques Jiha

The latest batch of landlords accused of violating the terms of 421a would’ve paid $304 million in property taxes this year without the tax break, according to city officials.

Officials warned the owners of 3,103 rental buildings — with 37,141 apartments— that they will lose their 421a benefits if they fail to meet a basic requirement of the tax break. The landlords allegedly failed to file a Final Certificate of Eligibility with the city’s Department of Finance — a form that assures that rental units are registered as rent stabilized, according to a joint announcement by Mayor Bill de Blasio, the city’s Department of Housing Preservation and Development and the Department of Finance on Tuesday. Landlords who don’t submit the form within the next 13 months will have their benefits suspended.

The crackdown closely follows another string of similar warning notices sent out last month. Officials threatened to retroactively revoke 421a benefits from the owners of 178 residential buildings who allegedly failed to register their properties as rent-regulated.
ProPublica reported soon after that officials planned to notify an additional 3,000 building owners that they were noncompliant.

Last month, the Building and Construction Trades Council and the Real Estate Board of New York reached an agreement that will likely pave the way for the tax break’s revival — though a bill has not yet been introduced before the state Legislature. The deal established wage requirements in some areas — south of 96th Street and along the Brooklyn and Queens waterfronts and extended the tax abatement to 35 years in those areas.

In the days following the deal, news of 421a-related enforcement actions and legislation emerged. The City Council introduced two bills that call on the city’s housing agency to step up oversight over the program. One of the bills would require HPD to audit 421a properties annually to make sure that landlords are complying with rent-regulation requirements. — Kathryn Brenzel