A tax break for residential renovations that has been dead for more than a year is now one step from being revived.
The City Council Committee on Housing and Buildings on Tuesday approved the renewal of the J-51 abatement and exemption program for the next six months. The program expired last year, prompting calls from the real estate industry to restore it.
In June, the state legislature passed a measure that authorized the city to bring back the tax break, so long as it did so by the end of this year. The City Council is poised to beat the deadline by a little more than two weeks.
The measure would revive the tax break through June 30, 2022, and apply it retroactively to projects that missed out on the program when it lapsed in June 2020. The full City Council will vote on the bill Wednesday, at its final meeting of the year.
Under the program, participants are exempted for 14 or 34 years from taxes on increased valuations resulting from renovation or conversion work. They also receive an abatement for between 50 percent and 150 percent of the “reasonable” cost of work.
Property owners have called for changes to the program, citing that the city’s estimations of “reasonable” costs for certain repair work are outdated. Tenant advocates have also criticized the tax break, saying that the city and state have not adequately enforced requirements that apartments remain rent-stabilized as a condition of the incentive.
Council member Helen Rosenthal, who represents the Upper West Side, cast what she referred to as a “ceremonial” vote against renewing the program.
“This is a no vote to send a message to the next Council and New York state legislature that we really need to amend J-51 so that it can do more to ensure that apartments are built for low-income New Yorkers,” she said.
Council member Barry Grodenchik, one of the bill’s sponsors, noted the importance of the program to co-op owners in his district in Eastern Queens. Co-op groups have argued that J-51 helps pay for necessary repairs, the cost of which would otherwise fall squarely on residents.
Garodenchik noted that he hopes the problems with J-51 are addressed before the program expires again in six months.
The committee also approved a resolution urging the state legislature to pass good cause eviction, which would effectively bar rent increases of 3 percent, or 150 percent of the region’s Consumer Price Index, whichever is higher. Several localities in the state have passed their own versions of the measure, building momentum for tenant advocates’ fight to apply the policy statewide.