HPD approves rule change restricting inclusionary housing projects

TRD NEW YORK /
Sep.September 15, 2017 06:00 PM

Trapping air rights in a cup (Credit: Lexi Pilgrim for The Real Deal)

The city’s Department of Housing Preservation and Development this week approved a rule change that bars developers receiving 421a from generating off-site inclusionary housing.

HPD proposed the rule change in August, asserting that the new 421a “undermines” the propose of the city’s inclusionary housing program. The rule change goes into effect Oct. 13.

Now, developers receiving 421a will need to keep density bonuses generated through the inclusionary housing program onsite. A major reason for the change is that HPD didn’t want condo developers — most of whom are not eligible for 421a — to scoop up these inclusionary air rights. The hope is that condo projects will seek zoning bonuses by creating affordable housing onsite.

In July, HPD approved another rule change involving the tax break. The rule exempts certain 421a-receiving projects constructed on or before Dec. 31, 2015, that already have a preliminary certificate of eligibility from having to submit a final certificate of eligibility. Under the old version of the tax exemption, developers were required to submit the preliminary certificate before construction was completed and then needed to file the final certificate before tenants moved into the building. Last year, city and state officials cracked down on 421a recipients who had failed to apply for their final certificate.

The new 421a, approved in April, does away with the preliminary certificate of eligibility. Developers now apply for the tax break once the project is completed.

It’s a change that simplifies the amount of paperwork required to receive 421a, but that was bemoaned by some in the real estate industry who argued that the change created uncertainty for developers and lenders as to whether or not they’d receive the tax break.


Related Articles

arrow_forward_ios
City Comptroller Scott Stringer (Credit: Getty Images)

City Comptroller Scott Stringer proposes “Tenant Bill of Rights”

Marlene Cintron, the Bronx’s head of economic development (Credit: iStock)

“It didn’t happen:” Bronx leader says Opportunity Zone program failed to deliver

From left: Eric Adams, Shaun Donovan, Scott Stringer and Ruben Diaz Jr. (Credit: Getty Images)

Mayoral race goes from bad to worse for real estate

Scott Stringer (Credit: Getty Images)

Scott Stringer calls for “universal affordable housing,” end to 421a

Senator Todd Kaminsky and RXR Realty's Scott Rechler (Credit: Getty Images)

No backlash for senator who broke ranks on rent vote

From left: Bruce Molser, David Schechtman, Bob Knakal, David Greenbaum, and Judi Pulice

New York’s real estate bigwigs offer predictions for 2020

Mayor Bill de Blasio and subway damage caused by Hurricane Sandy (Credit: Getty Images)

Program to rebuild Sandy-damaged homes needs extra $92M

Donald Trump with Rep. Emanuel Cleaver II, Rep. Ron Kind and Sen. Cory Booker (Credit: Getty Images, iStock)

Trump’s Opportunity Zone program is under investigation

arrow_forward_ios
Loading...