By Forum Staff
Mayor Eric Adams and Department of Housing Preservation and Development (HPD) Commissioner Adolfo Carrión on Friday announced the implementation of two critically-needed tools to address the city’s housing crisis. The tools will incentivize the construction of multifamily rental construction through a new program called “Affordable Neighborhoods for New Yorkers” (485-x), which replaces the previous 421-a (16) tool, extends the 421-a (16) deadline for projects already underway, and creates a program to incentivize conversion of commercial buildings to affordable homes.
485-x Requirements
Affordable Neighborhoods for New Yorkers (485-x) will be implemented by HPD to incentivize the inclusion of permanently affordable and rent stabilized housing in new, multi-family construction projects. Affordability requirements include:
Rental projects with 150 units or more located in select areas, including Manhattan south of 96th Street, western Queens, and parts of Brooklyn, will require 25 percent of homes to be income restricted at a weighted average of 60 percent of area median income (AMI).
Rental projects citywide with 100 units or more will require 25 percent of homes to be income restricted at a weighted average of 80 percent of AMI.
Rental projects citywide ranging from six to 99 units will require 20 percent of homes to be income restricted at a weighted average of 80 percent AMI.
Rental projects between six and 10 units, outside of Manhattan can opt for a smaller benefit and permanently restrict 50 percent of units.
Homeownership projects outside of Manhattan with an assessed value of $89 or less per square foot and where homeowners agree to reside in the home.
Through the program, construction workers on large projects of 100 units or more will be guaranteed a minimum of $40 per hour. Workers on projects with 150 units or more built in select areas of Manhattan south of 96th Street, western Queens, and parts of Brooklyn will receive between 60 and 65 percent of prevailing wage or between $63.00 and $72.45 per hour, whichever is less, escalating at 2.5 percent per year. Across the city, building service workers in buildings with 30 units or more will receive prevailing wage.
The program also encourages new homeownership development in the outer boroughs with changes from previous iterations of development incentives designed to encourage family-sized homeownership units.
All projects that intend to participate in 485-x must fill out HPD’s registration forms at nyc.gov/site/hpd/services-and-information/tax-incentives-485-x.page?utm_medium=email&utm_name=&utm_source=govdelivery. Potential applicants must register with HPD within six months of construction commencement. For projects that started construction after June 15, 2022 and prior to April 20, 2024, applicants must register within six months from June 14. HPD expects to officially launch applications for this incentive by the end of the year with the first approvals occurring in 2025.
Extension of 421-a
For new construction projects that commenced construction prior to June 15, 2022, the state budget also extended the completion deadline for qualifying projects seeking 421-a (16) tax benefits from June 15, 2022 to June 15, 2031. For projects that participate in this extension, this change also removed the controversial Options C and G, which allowed all affordable units in a project to be restricted at up to 130 percent AMI for projects that participate in the extension.
To participate in the extension, projects must submit a letter of intent form to HPD within 90 days of the form’s availability. HPD released the Letter of Intent form designating September 12, 2024 the last day to submit an intent to participate in the 421-a (16) extension. Applicants that do not submit within 90 days of Friday will not be eligible to apply for the 421-a (16) completion extension.