New RPTL 485-x Affordable Housing Tax Benefit Program Enacted

On April 20, 2024, as part of the annual Budget Bill, New York State enacted a new tax break program to incentivize affordable housing development in New York City. The new "485-x" program, which replaces the former 421-a program, is set to expire in 10 years. The 485-x program has some deeper affordability requirements than the 421-a program. The 421-a program had considered units "affordable" if they were affordable at 130 percent of area median income. The 485-x program considers units affordable only if they are affordable to households making less than the area median income. For large rental building projects containing 100 units or more, at least 25 percent of the units will need to be affordable at three different bands, averaging out to 80 percent of the area median income.  Very large projects containing 150 apartments or more will need to have deeper affordability, at an average of 60 percent of the area median income.  The benefit period varies at 10 years for small rental projects to 40 years for very large rental projects.

Affordable Neighborhoods for New Yorkers Tax Incentive Law, NY State Bills S.8306C, A. 8806C, Part U (4/20/24), adding RPTL Section 485-x [13 page document]