In April 2024, the New York State Legislature introduced the 485x tax incentive program, designed to offer tax benefits for qualifying real estate projects. The foundational laws of the program have been outlined and published by the NYS Senate in April, but we’re still waiting on final guidance and fine-tuning from the NYC Department of Housing Preservation and Development (HPD). This department is responsible for administering the program and will release the final application forms soon.

Yes, and this is very important. While we’re still waiting for the final application forms as mentioned before, you must file a Registration Notice within 6 months of your project’s Commencement Date. For projects that began construction on or before June 15, 2024, the deadline to file the Registration Notice is December 14, 2024. Failure to meet this deadline may result in a penalty fee imposed by HPD and to avoid this, we strongly recommend starting the Registration Notice filing process immediately for projects that already began construction. Our team is here to help, so don’t hesitate to reach out if you need assistance getting started. 

Here’s what you need to know if your project is nearing completion or already has a Certificate Occupancy (CO):
 
Affordable Housing Units: These must remain vacant until the HPD release the workbook template/application forms, and your project receives the initial workbook approval. The good news is that HPD is expected to release the necessary forms and templates soon and you’ll be able to proceed with leasing affordable units as soon as you’re past the approval stage.

Market Rate Units: These units may be marketed and leased immediately without restrictions. However, you must ensure that the overall unit mix of affordable and market rate units aligns with the statutory requirements. Avoid marketing any units that may need to be allocated for affordable housing.

The affordability requirements were published as part of the 485x law released in April. For projects located in Zones A or B with 150 or more units, 25% of the units must be designated affordable at an average of 60% AMI. Projects outside these zones with 100 or more units require 25% affordability at 80% AMI, while smaller projects (6-99 units) require 20% at 80% AMI. You can view the current AMI rent amounts on our website, which are updated annually in April by HUD:

https://www.mretax.com/happening-now-ami-for-2024/

No, Market Rate Units are not subject to rent stabilization or affordability requirements. These units are unrestricted both during the 485x benefit period and afterward.

To be eligible, your project’s Commencement Date — defined as the lawful start of excavation and foundation construction — must have occurred after June 15, 2022. If this applies to your project, you should be in a good position to benefit from the 485x program.