The deadline to file for an extension of time to complete construction under the 421-a program is next Thursday, September 12th.
What is the 421-a completion of construction deadline?
The 421-a program originally required that a project complete construction by June 15, 2026. Completion of construction is defined as receipt of a Permanent Certificate of Occupancy or a Temporary Certificate of Occupancy covering all residential areas.
Recent legislative changes to the 421-a program permit an extension of time to complete construction to June 15, 2031, if a project submits a Letter of Intent to HPD no later than September 12, 2024.
What is the 421-a Letter of Intent?
The 421-a Letter of Intent is form promulgated by HPD. The Letter of Intent includes general details about the project and its commencement of construction.
What are the other requirements to receive an extension of time to complete?
In addition to submitting a Letter of Intent, owners of projects utilizing the extension of time may not select 421-a Affordability Options C or G, which allowed all affordable units in the project to be affordable at 130% of Area Median Income.
What 421-a Affordability Options are available with the extension?
Rental projects may still utilize Affordability Options A, B, E or F. Homeownership projects may utilize Affordability Option D.
Option A requires 10% of the units to be affordable at 40% of AMI; an additional 10% at 60% of AMI; and an additional 5% at 130% of AMI.
Option B requires 10% of the units to be affordable at 70% of AMI; and an additional 20% at 130% of AMI.
Option D is the only homeownership option.
Option E requires 10% of the units to be affordable at 40% of AMI; an additional 10% at 60% of AMI; and an additional 5% at 120% of AMI.
Option F requires 10% of the units to be affordable at 70% of AMI; and an additional 20% at 130% of AMI.
*Options E and F are available only to projects with 300 units or more.
How do I submit the Letter of Intent?
Please contact Jason Hershkowitz, head of our Tax Incentives Group, at [email protected] or (212) 935-1400 for assistance with your Letter of Intent.
What other real estate tax incentives are available in New York City?
As a reminder, New York State has recently enacted two additional types of residential tax incentives. The 485-x program, which replaces 421-a, is available for new construction, and the 467-m program provides substantial real estate tax savings for non-residential to residential conversions. Seiden & Schein, P.C. is available and ready to assist you with both.
Please contact Jason Hershkowitz for additional information regarding the Letter of Intent Form, or the 421-a, 485-x and 467-m programs.
Seiden & Schein, P.C.
570 Lexington Avenue, 14th Floor
New York, New York 10022
(212) 935-1400
[email protected]
Website:www.seidenschein.com
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