The New York State law that authorizes the J-51 tax incentive program expired on December 31, 2011. This ended the authority of New York Citys Department of Housing Preservation and Development (HPD) to issue new benefits, and it has thus taken no J-51 applications since then.
In the past renewal of J-51 has been virtually automatic. However, the current attempt at renewal has been delayed due to questions relating to the cost of the program, outdated benefit schedules, concerns about processing inefficiency, and rent stabilization issues.
As of last week, HPD has put forward a proposal to address the renewal and its related problems. The Citys proposal makes substantial changes in the program, among the most sweeping in years. It proposes to:
- reduce the cost of the program by removing condominium and cooperative housing from eligibility;
- improve the benefit schedule by increasing the benefit allowance for many items;
- and improve processing efficiency by eliminating benefit items that are not system-wide and by mandating electronic applications.
In this Inside Edge, we discuss how HPDs proposed solutions address these problems and what alternatives there might be.
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