The NYC Department of Housing Preservation and Development has updated its guidance regarding commencement of construction for the 421-a(16) tax exemption, also known as the Affordable New York Housing Program.  As you are aware, buildings must commence construction on or before June 15, 2022 to remain eligible for this significant property tax exemption.

HPD has now confirmed that such commencement may take place pursuant to any type of permit, including an NB, foundation, Alt-1 or even an Alt-2 permit, provided such Alt-2 is issued “in conjunction with” the NB or Alt-1.  HPD’s full guidance can be found below.

Please be advised, however, that HPD will still require an NB, foundation or Alt-1 permit when determining the project’s statutory “Commencement Date,” which HPD uses to measure a project’s 421-a benefit schedule and 421-a property tax (also known as the “mini-tax”).  This means that if a project commences construction with an Alt-2 permit, the Commencement Date will be the date of issuance of said NB, foundation or Alt-1 permit, and not the previous commencement of construction pursuant to the Alt-2.  This change could impact a project’s property tax assumptions.  Furthermore, if the project includes additional tax incentives, such as an ICAP application, different start dates and benefit amounts may apply.

Please contact Jay Seiden (at [email protected]) or Jason Hershkowitz (at [email protected]) with any questions you have regarding the current program and the requirements needed to secure its benefits.