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
(Credit: iStock)

What’s wrong with J-51? Plenty, landlord reps say

Jay Martin, James Whelan and Joe Strasburg

Rent-pocalypse 2.0: Real estate industry reacts to tenant demands

Alexandria Ocasio-Cortez, Bernie Sanders and Elizabeth Warren

By the numbers: Breaking down national housing agendas from the far left

Nuveen CEO Vijay Advani, Blackstone President & COO Jonathan Gray and one of the Texas properties

Blackstone just sold off a 29M sf national industrial portfolio

The purge continues: WeWork’s head of real estate is leaving

Judith and Rudy Giuliani Rudolph and Judith Giuliani are divorcing after 16 years. (Credit: Getty Images, Trulia, Highrises)

Luxury properties at play in Rudy Giuliani’s ugly divorce

Governor Andrew Cuomo and Senator James Skoufis (Credit: Getty Images, NY Senate)

Owners of some residential properties can’t hide behind
LLCs anymore

Jimmy Van Bramer (Credit: NYC.gov, iStock)

After failing to meet his own deadline, Queens council member returns thousands in real estate donations

arrow_forward_ios