Gov. Hochul’s plans to replace 421-a with a “placeholder”

Governor Hochul gave her budget address earlier this week which included her proposal for the 485-x program. This program is meant to replace the 421-a program, or the “Affordable Neighborhoods” program, that expired in 2022. Gov. Hochul described 485-x as a “placeholder” and gave very little detail.

485-x, or the Affordable Neighborhoods for New Yorkers, shares a similar name to the previous program. The goal is to incentivize affordable housing construction in New York City by offering a tax break to developers. What exactly that means or how it will be done, however, is not clearly defined and so the proposed program hails its “placeholder” nickname.

“Gov. Hochul’s new program would create a 35-year tax break benefit period for developers of rental projects that include affordable units, and 40 years for homeownership projects with affordability. But it doesn’t detail the specific levels of affordability and the percentage of affordable units that developers must hit in order to benefit from the tax break.” See Hochul’s ‘placeholder’ housing developer tax break – City & State New York (cityandstateny.com)

Gov. Hochul is leaving details of 485-x to be determined by the New York City Department of Housing Preservation and Development. Like everything else, there are some for and some against proposed 485-x. Let’s see if this “placeholder” pans out.

Thank you Nancy DeBiasi for this week’s Tax Tracker!