Add another item to the list of things landlords are worried about.
Property owners are calling on the City Council to renew a tax break that expired more than a year ago. Time is of the essence: In June, the state legislature granted the city the authority to renew J-51, a tax abatement and exemption program for residential renovations or conversion work, until January 2022. The renewal would cover work completed before June 30, 2022.
But the City Council has not made any moves to revive the program. A representative for Speaker Corey Johnson’s office declined to comment.
If the City Council does not renew the tax break before the end of this year, property owners will not only need the state legislature to act once again, but they will have to contend with a new City Council and mayor.
Jay Martin, executive director of the Community Housing Improvement Program, framed the issue as an opportunity to help landlords replace boilers damaged during Hurricane Ida and to potentially make their properties more resilient.
“The City Council talks a big game when it comes to environmentalism. Well, it is time for them to put their money where their mouths are,” Martin said in a statement. “This modest tax break will help maintain and modernize hundreds of thousands of homes. It’s a disgrace that the Council has dragged its feet on reauthorizing it.”
Use of J-51 has declined over the years, in part because property owners take issue with the way the city calculates the abatement portion. Eligible properties typically get a 34-year exemption (certain types of work get a 14-year break) from any increase in taxes resulting from renovations, and then an abatement of up 8.3 percent or 12.5 percent on existing taxes. The latter is based on what the city determines to be the “reasonable cost” of the work, which is based on a cost schedule that property owners argue sorely needs updating.
The tax break has also been the subject of multiple lawsuits, alleging that landlords have wrongfully deregulated apartments while receiving the benefit. The Department of Housing Preservation and Development has indicated a desire to reform the program, but has not made any moves to do so.