Exemption Administration Manual, Part 2: Multiple dwellings and urban renewal—Chart B: Eligibility requirements: Property use requirements: Housing (multiple dwelling) exemptions

Housing Trust Fund Program: Low-income person, certain public or private entities (see exemption profile), or limited-profit private developer.

Affordable Housing Development Program: Low or moderate-income person

Housing Trust Fund Program - low-income housing (occupant income limits specified in statute - see Chart ID) - cooperative, condominium, homestead, or rental building.

Affordable Housing Development Program: low or moderate-income (occupant income limits not specified by law)—Newly constructed cooperative, condominium, or one- to four-family dwelling.

1. Housing Assistance Corporation (PHFL  654-b) - low- or moderate-income housing (tenant income limits not specified by law).

2. Housing New York Corporation (PHFL  654-c) - low- or moderate-income housing (tenant income limits specified in statute - see Chart ID, L. 1986, Ch. 32).

3. Other subsidiary (PHFL  654-a) - low-income housing (tenant income limits not specified by law).

Prior to occupancy by tenants, property must be (a) a vacant property that is converted or rehabilitated to residential rental use, (b) a newly constructed rental project, or (c) a state-aided public housing project where more than 30% of the units are vacant. Buildings rehabilitated or constructed must be small scale and low rise. 

After rehabilitation or construction, property must be occupied by low-income tenants (income limits specified in statute - see Chart ID).

Rent-controlled, rent-regulated, or publicly aided housing for persons or their spouses 62 years of age or older or persons with disabilities (tenant income limits specified in statute. See Chart ID). 

In the case of a dwelling previously subject to a mortgage insured by the federal government under National Housing Act 213, the property must be occupied by the same heads of household that were entitled to possession or the use and occupancy of the property at the time of termination of the mortgage.

1. Property must be used for energy-conservation alterations or improvements.

2. Property must not be a Class A or Class B multiple dwelling used in whole or in part for single-room occupancy, defined by Mult Dw L 4(16) as "the occupancy by one or two persons of a single room, or of two or more rooms which are joined together, separated from all other rooms within an apartment in a multiple dwelling, so that the occupant or occupants thereof reside separately and independently of the other occupant or occupants of the same apartment." This requirement applies regardless of the status or use of the building after the conversion, alteration, or improvement unless such work is carried out with the substantial assistance of grants, loans, or subsidies from any federal, state, or local agency.

3. Property must be used for residential purposes. If the property is used in part for other purposes, the tax exemption and abatement must be adjusted to exclude the portion used for non-residential purposes.

4. Property must be located in an area approved for clearance, replanning, reconstruction, or neighborhood rehabilitation pursuant to Chapter 887 of the Laws of 1945, or in an area designated for studies, tests, demonstrations, and other activities for the prevention and elimination of slums and urban blight pursuant to Chapter 608 of the Laws of 1956, or in an area for which a preliminary or final plan has been approved pursuant to Chapter 688 of the Laws of 1957 or Chapter 924 of the Laws of 1958 or Chapter 971 of the Laws of 1960, or in an area for which an urban renewal plan or tests, studies, or demonstrations have been approved pursuant to Article 15 of the General Municipal Law. In addition, the dwelling must be certified by the project board for the area as a dwelling which is to be or has been improved in conformity with such replanning, reconstruction, neighborhood improvement, studies, tests, demonstrations, or plan.

5. In the case of alterations or improvements to eliminate fire or health hazards, tax exemption and abatement does not apply to any portion of the property that increases the gross cubic content of the building.

1. Project must be a new dwelling located on land that, 36 months prior to start of construction, was vacant, predominantly vacant, underutilized, or improved with a nonconforming use. New dwellings also include projects consisting of new construction and either rehabilitation of an existing multiple dwelling or conversion of non-residential space into residential space (or a combination of such rehabilitation and conversion), provided that at least 51 percent of the floor space in the completed project is new space.

2. If the new dwelling replaces a demolished residential building and contains more than 20 dwelling units, the new dwelling must contain at least 5 dwelling units for each Class A dwelling unit demolished.

3. If the new dwelling contains more than 100 dwelling units, at least 15% of the units must contain 3-1/2 rooms or more and at least 10% of the units must contain 4-1/2 rooms or more, unless this requirement has been waived by the NYC Department of Housing Preservation and Development.

4. Property must not include land mapped as a public park (exceptions apply. See exemption profile).

5. Property must not include land used for 10 or more consecutive years prior to October 1, 1971 as a "private park," defined as a privately owned zoning lot in a densely developed area having a minimum size of 4,000 sq. ft., free of developments and containing only trees, grass, benches, walkways, and passive recreational facilities, which has been used and maintained during such period for such passive recreational activity by the general public without charge and with the consent and participation of the owner.

6. If a local law exists providing for the stabilization of rents in multiple dwellings, the rents of the dwelling exempt under RPTL  421-a are subject to control under that local law, unless they are exempt from such control by reason of cooperative or condominium status, for the entire period during which the property is receiving  421-a benefits or for the period during which the local law is in effect, whichever is shorter. This period may be extended if rent-control provisions other than those contained in RPTL  421-a become applicable.

7. Property must not be used as a hotel.

The above requirements apply to all four exemptions authorized by RPTL  421-a. Certain additional requirements apply only to the 18-, 23-, and 28- year exemptions. In the case of the 18- and 23-year exemptions and property located in Manhattan south of or adjacent to 110th Street and in the case of the 28-year exemption and property located in certain areas, (a) construction of the project must be carried out with the substantial assistance of grants, loans, or subsidies from a federal, state, or local agency or (b) 20% of the dwelling units must be affordable to families of low or moderate income.

In the case of the 28-year exemption on property wholly located within the Greenpoint-Williamsburg exclusion area, generally no less than 20% of the dwelling units must be affordable to persons or families of low or moderate income. We suggest that you contact the New York City Department of Housing Preservation and Development for further details concerning project eligibility.

Use requirements vary in new exclusion zones enacted in 2007. Such information is available on the NYC Department of Finance website.

1. Property must be a new dwelling.

2. Construction must take place on land that is vacant, predominantly vacant, underutilized, or improved with a nonconforming use.

3. Initial regulated rents charged upon initial occupancy must be at least 15% less than the rents prevailing for comparable newly constructed residential units in the same area or any comparable area.

4. Rents are subject to control under the Emergency Tenant Protection Act for a period of 10 years or for the period during which the act is in effect, whichever is shorter. This period may be extended if rent-regulation provisions other than those contained in RPTL  421-c become applicable.

1. Exemption and abatement are allowed only for the following eligible improvements: replacement of a boiler or burner or installation of an entire new heating system; replacement or upgrading of elevators; installation or replacement or upgrading of the plumbing system, including water main and risers; replacement or installation of walls, ceilings, floors, or trim where necessary; replacement or upgrading of doors; installation of security devices and systems; installation, replacement, or upgrading of smoke detectors, fire alarms, fire escapes, or sprinkler systems; replacement or repair of roof, leaders, and gutters; replacement or installation of wall and pipe insulation; replacement or upgrading of street connections for water or sewer services; replacement or installation of windows or installation of window grates or guards; installation or replacement of boiler smoke stack; pointing, waterproofing, and cleaning of entire building exterior surface; improvements designed to conserve the use of fuel, electricity, or other energy sources; improvements unique to congregate living facilities, as defined by rules and regulations promulgated by the local housing agency; work necessary to effect compliance with all applicable laws including but not limited to the Mult Dw L, the NYC City Housing Maintenance Code, and the NYC Building Code.

2. Class A dwellings must be used for single-room occupancy, defined by Mult Dw L  4(16) as "the occupancy by one or two persons of a single room, or of two or more rooms which are joined together, separated from all other rooms within an apartment in a multiple dwelling, so that the occupant or occupants thereof reside separately and independently of the other occupant or occupants of the same apartment." Prior to improvement, Class A dwellings used for single-room occupancy must contain no more than 25% Class A dwelling units having lawful sanitary and kitchen facilities. The dwelling must not be a college or school dormitory, clubhouse, or residence whose occupancy is restricted to an institutional use such as housing intended for use primarily or exclusively by the employees of a single company or institution.

3. Immediately prior to, and during, the construction of the eligible improvements, 50% or more of the dwelling units in the building must be occupied by permanent residents (persons who have resided in the building for six months or more, who have leases with terms of six or more months, or who have requested leases pursuant to the provisions of the rent stabilization code for housing accommodations located in hotels), unless the building is (1) a vacant, government-owned or privately owned multiple dwelling that had been vacant for two years or more prior to the commencement of construction of eligible improvements or (2) a vacant multiple dwelling where the eligible improvements are carried out with substantial assistance of grants, loans, or subsidies from any federal, state, or local agency or any not-for-profit philanthropic organization one of whose primary purposes is providing low- or moderate-income housing.

4. Except in the case of (1) property which is receiving or has received assistance under a government rent-subsidy program for the construction of eligible improvements, or (2) property which is owned by a not-for-profit corporation or its wholly owned subsidiary and which is receiving or has received assistance pursuant to a government loan subsidy program, the initial rent, after completion of eligible improvements, for 90% of the total number of dwelling units occupied by permanent residents in a Class A or Class B multiple dwelling other than apartments must not exceed the greater of either (1) the amount of any governmental rental assistance received by an occupant or (2) 75% of the rent permitted to be charged on July 1, 1986 for zero-bedroom (studio) units on the moderate rehabilitation fair market rent schedule as determined by the U.S. Department of Housing and Urban Development for the Housing Assistance Payments Program under Section 8 of the National Housing Act, plus an amount equal to the aggregate annual rent adjustments authorized subsequent to January 1, 1987 by the rent guidelines board for hotel stabilized units.

5. During the period of tax exemption or abatement, a minimum of 75% of the dwelling units must be rental units occupied by permanent residents. However, the local housing agency may exempt from this requirement those buildings improved with the aid of a rehabilitation loan from any government agency or operated pursuant to a contract with a government agency.

6. During the period of tax exemption or abatement, all dwelling units, except owner-occupied units, must be subject to the Emergency Housing Rent Control Law, the local Emergency Housing Control Act, the Emergency Tenant Protection Act of 1974, or any local laws enacted pursuant to these laws, or the Rent Stabilization Law of 1969. However, the New York City Department of Housing Preservation and Development may exempt from this requirement dwelling units that are not occupied by permanent residents in those buildings which are owned by a not-for-profit corporation or its wholly owned subsidiary and which are improved with the aid of a rehabilitation loan from any government agency or operated pursuant to a contract with a government agency.

1. The property must not be used as a hotel.

2. The property must be a Class A multiple dwelling created from conversion of a non-residential building within the stated eligible area, and provided that the aggregate floor area (the sum of the gross areas of the several floors of a building) of commercial, community facility, and accessory use space within such multiple dwelling does not exceed 25% of the aggregate floor area of such multiple dwelling.

3. The non-residential building, or portion of, that is a subject of conversion to use as a multiple dwelling must have a certificate of occupancy for commercial, manufacturing or other non-residential use of not less than 90% of the aggregate floor area of such building, or portion of, that is subject of the conversion to use as a multiple dwelling.

4. If a local law exists providing for the stabilization of rents in multiple dwellings, the rents of the dwelling exempt under this program are subject to control under that local law, unless they are exempt from such control by reason of cooperative or condominium status, for the entire period during which the eligible multiple dwelling receives benefits under this program. This period may be extended if rent-control provisions other than those contained in this program become applicable.

1. Benefits under this exemption are reserved exclusively for: (a) residential construction work, other than dwelling units in a hotel, or (b) a combination of residential construction work and commercial construction work described in approved plans which, after completion of the construction work, will qualify as mixed-use property. Projects that involve construction work exclusively for commercial purposes are not eligible for this exemption.

2. Following the completion of the construction work on a mixed-use property, more than 25% of the aggregate floor area of the building or structure (sum of the gross areas of the floors of the building or structure) must be used or held out for use as commercial (including hotel services), community facility or accessory use space.

3. No new buildings or structures are eligible for this exemption.

4. The building or structure cannot be used in whole or in part for those entertainment activities that the department of finance has determined not to be in the public interest.

5. Construction work on any condominium unit is ineligible unless such unit is in a building or structure which, if viewed as a whole and as if it were under single ownership, would qualify as a mixed-use property.

6. If a local law exists providing for the stabilization of rents in multiple dwellings, the rents of the dwelling exempt under this program are subject to control under that local law for the entire period during which the eligible multiple dwelling receives benefits under this program unless they are exempt from such control by reason of cooperative or condominium status. This period may be extended if rent-control provisions other than those contained in this program become applicable.