421-a Benefits Suspended for Failure to Comply

NYC HPD

Property owners face 421-a suspension for failure to submit Final Certificates of Eligibility. On March 9, 2018, Housing Preservation and Development Commissioner Maria Torres-Springer and Department of Finance Commissioner Jacques Jiha announced the suspension of 421-a benefits to more than 1,700 property owners. The decision to suspend benefits is part of the Housing Preservation and Development and Department of Finance’s initiative to ensure that properties comply with the 421-a application rules. Currently, there is a total of 11,022 apartments that are not in compliance with 421-a rules. These owners’ 421-a benefits represent $66 million in tax revenue for 2018.

As part of the initiative, 421-a benefits are suspended to owners who have failed to complete and file their Final Certificate of Eligibility with the Department of Finance. Final Certificates of Eligibility are part of the 421-a application process and are filed by property owners once building construction is complete. However, many owners, especially owners of smaller buildings with less than 100 units, fail to complete the Final Certificates of Eligibility process. The Department of Finance sends letters to owners to notify them of suspension if they do not comply with the 421-a program. The letters provide as notice that the tax exemption will be suspended the Final Certificates of Eligibility is not submitted within 13 months.

On January 31, 2018, the Department of Finance found 1,788 owners did not meet the deadline and therefore their tax-exemptions were suspended. Council Members were informed about the suspended properties in their Districts and how they could help the buildings meet the requirements. If owners file their Final Certificates of Eligibility by May 1, 2018, their tax-exemption benefits will be reinstated. If owners fail to do so by the deadline, they will no longer receive 421-a benefits and will have to repay the tax benefits already received.

In response to the initiatives, Housing and Preservation Development Commissioner Torres-Springer states that the property owners “need to live up to their end of the deal” and is working with City and State agencies to hold such owners accountable. Department of Finance Commissioner Jiha reaffirms that the purpose of the tax benefits is to achieve the goal of more affordable housing in the City.

Click here to read New York City Housing Preservation and Development’s Press Release.

 

By: May Vutrapongvatana (May is a CityLaw Intern and a New York Law School Student, Class of 2019.)

One thought on “421-a Benefits Suspended for Failure to Comply

  1. Why is HPD not requiring repayment of these lost tax $? If you owe $300 in tickets this City will send a tow truck out for your car YET developers who fleece this city for billions of dollars get a free pass? HPD is creating our housing crisis

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