New York City Council
Committee on Housing and Buildings
May 30, 2024
·
10:00 AM
2 hr 14 min
Summary
A hearing on the J51 Tax Program and Introduction No. 654, which would reauthorize the J51 tax abatement program to incentivize repairs and upgrades to multifamily buildings. Discussions focused on targeting benefits to low-income housing, enforcement mechanisms, eligibility criteria, compliance monitoring, impact on decarbonization efforts, outreach plans, and program metrics. Features testimony from the Department of Housing Preservation and Development (HPD), affordable housing advocates, and the public.
Meeting chapters
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Council Member Pierina Ana Sanchez opens hearing on the J51 Tax Program
Council Member Pierina Ana Sanchez opens the hearing by detailing New York City's worsening housing crisis, including rising evictions, homelessness, and lack of affordability. - She highlights the mission of …
0:00:38
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4 min
Kim Darga on the J51 Tax Incentive Program
Kim Darga, Deputy Commissioner, Development, Department of Housing Preservation and Development, provides an extensive testimony on the J51 Tax Incentive Program. Darga explains the program’s objectives, historical context, the proposed …
0:05:50
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11 min
How many buildings applied for and were approved or denied for the J-51 tax incentive program, and what were the reasons for denial?
The housing officials explain the number of buildings that applied for and received benefits under the J-51 tax incentive program. - 96,100 buildings applied and were deemed eligible for the …
0:17:38
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118 sec
What are the details regarding the cost and participation in the program being discussed?
The deputy commissioner explains that the program allows property owners to address specific issues separately, such as roof replacement or heating system repairs, rather than all at once. - The …
0:19:36
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58 sec
What are the application fees and process for renovation projects under the proposed policy?
The deputy commissioner explains there is a $1000 application fee each time an owner reapplies for a renovation project. - Owners can reapply an unlimited number of times for different …
0:20:34
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24 sec
What properties lost their J-51 tax benefits over the last 10 years and why?
The council member asks how many buildings or properties lost their J-51 tax abatement or exemption during the benefit period over the last 10 years and the reasons for losing …
0:20:59
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135 sec
What professionals are part of the new compliance team in the Office of Development and what are their responsibilities?
The Deputy Commissioner explains that the new compliance team monitors whether building owners receiving tax benefits like 421a and J51 comply with requirements like rent stabilization. - The team was …
0:23:14
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124 sec
What is the current memorandum of understanding between the Department of Housing Preservation and Development (HPD) and the Division of Housing and Community Renewal (DHCR) regarding sharing rent registration information?
The Department of Housing Preservation and Development (HPD) and the Division of Housing and Community Renewal (DHCR) have a memorandum of understanding allowing them to share rent registration data. - …
0:25:20
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57 sec
What is the cost of the J51 program?
The Deputy Commissioner explains that the average annual cost of the J51 program over the last 15 years has been around $270 million per year. - The cost accumulates over …
0:26:19
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87 sec
What factors contributed to the decline in usage of the J51 program since the early 2000s?
The Deputy Commissioner explains that a few factors contributed to the decline in J51 program usage since the early 2000s. - Macroeconomic issues impacting owners' ability to get low-cost loans …
0:27:47
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92 sec
What is the breakdown of where the previous J51 tax beneficiaries were located by borough?
The deputy commissioner explains that Queens had the highest utilization of the J51 tax exemption program, followed by Brooklyn, the Bronx, Manhattan, and Staten Island. - The program has been …
0:29:21
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88 sec
What information is required from building owners applying for the tax exemption program?
The council member is informed that building owners applying for the tax exemption program do not need to provide financial distress information since it is a reimbursement program, not underwritten …
0:30:51
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109 sec
What are the requirements for building owners to be eligible for the J-51 tax incentive program?
The building owner cannot have any outstanding violations with the Department of Housing Preservation and Development (HPD) or Department of Buildings (DOB), or owe municipal charges to be eligible for …
0:32:41
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165 sec
What are the characteristics of buildings that received J-51 tax incentives?
The deputy commissioner explains the typical characteristics of buildings that received J-51 tax incentives. - The buildings tend to be older, with a median year built of 1929 for recipients …
0:35:26
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146 sec
What information was collected about rents and tenant incomes for the previous version of the Affordable Housing NYC program?
The Department of Housing Preservation and Development did not require information about tenant incomes or rents for buildings participating in the previous version of the Affordable Housing NYC program. - …
0:37:53
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29 sec
How is the J51 program being targeted to benefit low-income housing?
The J51 program is now targeting buildings that serve lower-income New Yorkers with the lowest rents. - Under the new program rules, rent data is being collected to determine eligibility …
0:38:22
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47 sec
What percentage of rent-regulated buildings participated in the previous iteration of the J51 program?
The deputy commissioner explains the breakdown of building types in the previous program iteration over the last 15 years. - Around 40% were rental properties. - Around 60% were co-ops …
0:39:27
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28 sec
What is the breakdown of rental assistance properties by rent stabilized vs other regulated units?
The official explains that the rental properties covered were either rent stabilized or otherwise regulated by the agency with rent limits, but doesn't have a breakdown.
0:39:55
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38 sec
What types of repairs were eligible under the previous J51 program, and how common were applications involving lead abatement?
The deputy commissioner explains the most common repairs eligible under the previous J51 program were pointing, lintel replacement, windows, roof replacement, and doors. Applications involving lead abatement work were very …
0:40:33
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82 sec
What eligible expenditures were underutilized in the housing program?
The deputy commissioner explains that certain eligible expenditures like oil tanks, mailboxes, compactors, lead work, and cogeneration were underutilized in the housing program. - Oil tanks, mailboxes, compactors, and lead …
0:41:56
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28 sec
How does HPD verify if landlords keep units rent-stabilized under the program?
HPD focuses on ensuring projects meet eligibility requirements like rent stabilization at the time of application. Going forward, HPD plans to operationalize an enforcement system modeled after the 421a program …
0:42:45
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99 sec
Do they have an agreement with DHCR to share rent stabilized data?
The council member asks if there is a data sharing agreement with the Division of Housing and Community Renewal (DHCR) for rent stabilized data. The deputy commissioner confirms they have …
0:44:23
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14 sec
Is the unit responsible for enforcement and reviews of housing programs a new or existing one, and how many staff will be allocated to this function?
The respondent states the unit is an existing small division within the Office of Development at the Department of Housing Preservation and Development. - It is primarily staffed by attorneys …
0:44:38
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83 sec
What is the process for verifying eligibility for rental units to receive J51 benefits?
The deputy commissioner explains that for property owners to receive J51 benefits for rental buildings, they must demonstrate during the application process that at least 50% of units are rent-stabilized …
0:46:21
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73 sec
What is the general term and duration of the benefit provided by the Department of Housing Preservation and Development?
The Department of Housing Preservation and Development provides a benefit where the owner completes work and is eligible for an abatement of up to 70% of the cost. - The …
0:47:35
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60 sec
Does the Department of Housing Preservation and Development (HPD) have sufficient resources to appropriately enforce its new programs?
Deputy Commissioner Kim Darga states that HPD is currently evaluating if it has adequate resources to oversee and enforce several new programs it is launching, including the 421a extension, the …
0:48:47
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90 sec
How can the J51 program help buildings comply with Local Law 97?
Council Member Lincoln Restler inquires about how the J51 program could assist buildings in meeting the requirements of Local Law 97. - Deputy Commissioner Kim Darga affirms that J51 is …
0:51:03
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47 sec
What are the eligibility criteria for condominium owners to receive the J51 tax benefit?
The council member and HPD officials clarify that condominium units with an assessed value below $45,000 are eligible for the J51 tax benefit program. - This refers to the assessed …
0:51:51
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47 sec
What proportion of cooperative and condominium buildings in New York City have unit assessed values of $45,000 or less?
The council member asks about the percentage of co-op and condo buildings in New York City that have unit assessed values of $45,000 or less, making them potentially eligible for …
0:52:54
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4 min
What evaluation process exists for local law 97 compliance in J51 tax abatement applications?
The council member inquires if there is an evaluation process for local law 97 compliance that is considered when buildings apply for the J51 tax abatement program. The deputy commissioner …
0:57:05
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3 min
What is the relationship between assessed value and market value as seen on platforms like Zillow or Redfin?
The council member asks for clarification on the distinction between the assessed value used by the city and the market value shown on real estate listing platforms like Zillow or …
1:00:48
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86 sec
What was the impact of the new HPD lead laws enacted after 2019 on applications for lead abatement work?
There were close to zero applications for lead abatement work even after the new HPD lead laws went into effect after 2019. - The new lead laws imposed additional requirements …
1:02:36
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112 sec
What enforcement actions has HPD taken against J51 beneficiaries in recent years?
HPD confirms there was at least one enforcement action against a J51 property just before the pandemic, resulting in a revocation of benefits. The property was found ineligible for the …
1:04:28
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69 sec
What data does HPD have on tenant harassment or building condition complaints received in the last 15 years for buildings that received the J51 tax benefit?
HPD does not have data on the number of tenant harassment or building condition complaints received in the last 15 years for buildings that received the J51 tax benefit. - …
1:05:38
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56 sec
Does HPD physically inspect completed rehabilitation work under the J51 program to ensure compliance and quality?
The council member asks if the Department of Housing Preservation and Development (HPD) physically goes to inspect rehabilitation work done under the J51 program to verify it was completed properly. …
1:06:58
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83 sec
What is the list of J51 eligible buildings in Council Member Restler's district?
Council Member Lincoln Restler requests a list of co-ops and condos eligible for the J51 tax exemption program in his district to facilitate outreach and compliance with Local Law 97. …
1:08:40
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96 sec
What programs exist to convert existing buildings into homeownership opportunities?
The Department of Housing Preservation and Development does not have a specific program for converting existing buildings into homeownership opportunities. - However, the agency is open to supporting such projects …
1:10:42
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3 min
What is the typical duration of the rental to ownership conversion process and what requirements must residents meet?
The deputy commissioner explains that the rental to ownership conversion process can take a long time. - For successful conversions, 80% of residents must express interest in converting - 80% …
1:14:17
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71 sec
How many buildings would be eligible for the new housing program in New York City?
The Deputy Commissioner estimates that roughly 700,000 residential units in New York City could be eligible for the new program. - The eligibility is based on a percentage of the …
1:15:29
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59 sec
What are the breakdowns of eligible building types like co-ops, condos, Mitchell-Lama units, and others?
The Deputy Commissioner explains that around 70% represent rental housing and 30% homeownership like co-ops or condos. - There are approximately 90,000 Mitchell-Lama units in New York City. - Mitchell-Lama …
1:16:29
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34 sec
What is the number of units in NYC that have at least 50% rent-stabilized apartments renting below 80% of the area median income?
The Department of Housing Preservation and Development estimates around 700,000 potentially eligible units meet the criteria of having at least 50% rent-stabilized units renting below 80% of area median income. …
1:17:03
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82 sec
What is the number of buildings corresponding to 360,000 rent-stabilized units?
The council member does not receive a direct answer on the number of buildings corresponding to 360,000 rent-stabilized units. - The Department of Housing Preservation and Development does not have …
1:18:25
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46 sec
What does Deputy Commissioner Darga expect regarding the geographic origins of applicants under the new program requirements?
Deputy Commissioner Kim Darga indicates that past usage is likely a good indicator of future applicants' geographic origins. - However, the new requirement that 50% of units be rent-stabilized and …
1:19:13
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51 sec
What are the affordability requirements for residential units?
The Department of Housing Preservation and Development states that 50% of the residential units must be rent stabilized and have rents below 80% of Area Median Income (AMI). - The …
1:20:05
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20 sec
What is the projected annual cost for the program?
The deputy commissioner explains the projected annual cost for the program is difficult to predict precisely. - The reimbursement rates the program is willing to pay will likely be slightly …
1:20:26
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59 sec
What factors contributed to the average cost per unit being around $10,000 for the J51 housing incentive program in 2018-2020?
The deputy commissioner from the Department of Housing Preservation and Development explains the reasons behind the average cost per unit being around $10,000 for properties receiving the J51 tax exemption …
1:21:27
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107 sec
What is the average benefit to a housing unit over the lifespan of a particular housing program?
The deputy commissioner indicates uncertainty about having specific data on the average benefit per unit over the program's duration, but provides general cost approximations. Small buildings have an average cost …
1:23:15
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89 sec
What are the citywide estimates of building reserve situations?
The Department of Housing Preservation and Development does not have a way to reliably obtain citywide estimates of building reserve situations at a building level. - The New York City …
1:25:48
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64 sec
What additional outreach or special resources does HPD plan for reaching smaller properties?
The council member asks if HPD plans any additional outreach or special resources to target smaller properties given the higher per-unit repair costs. The deputy commissioner explains that HPD conducts …
1:27:04
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68 sec
What is the minimum number of units for a property to be eligible?
The deputy commissioner explains that multifamily buildings with 3 or more units qualify as eligible properties. - Properties with less than 3 units are not targeted by Local Law 97 …
1:28:12
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31 sec
What outreach efforts are planned in connection with the passage of J51?
The deputy commissioner confirms that outreach is planned once the council authorizes the passage of J51. - Outreach efforts are necessary to spread awareness about J51 due to the elapsed …
1:29:10
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32 sec
What metrics will be used to measure the success of the J51 program?
The council member asks what metrics HPD (Housing Preservation and Development) will use to evaluate the success of the J51 program. The deputy commissioner responds that an increase in usage …
1:29:42
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33 sec
What is the typical duration for litigating and fully resolving a 7A proceeding?
The council member asks about the typical timeframe for litigating and fully resolving a general 7A proceeding from start to finish. The deputy commissioner overseeing financing programs at the Housing …
1:30:52
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78 sec
What is the confidence level of HPD regarding the new J51 structure as an incentive for property owners to undertake rehabilitation?
The Department of Housing Preservation and Development (HPD) expresses confidence in the new J51 abatement structure as an incentive for property owners to rehabilitate their properties. - The abatement covers …
1:32:18
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120 sec
What new categories of work beyond Local Law 97 will be eligible for the J51 tax exemption program?
The major building system work that owners have traditionally used the J51 program for will remain eligible. - Replacement systems must meet efficiency requirements, like prohibiting single pane windows - …
1:34:19
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48 sec
What are the details of the monitoring and data sharing process for the 421A compliance program?
The council member asks about how the Department of Housing Preservation and Development (HPD) monitors compliance with the 421A program's rent stabilization requirements and collects data from building owners. - …
1:35:17
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96 sec
What mechanisms does HPD have to identify J51 tenants lacking rent regulation coverage?
HPD primarily relies on complaint-driven enforcement to identify cases where J51 tenants lack rent regulation coverage. - Council Member Pierina Ana Sanchez asks if tenants report such issues through 311 …
1:36:53
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4 min
What measures are in place to prevent property owners from simultaneously receiving Major Capital Improvement (MCI) increases and J51 tax benefits for the same renovations?
The council member asks about the system in place to ensure property owners cannot receive both MCI rent increases and J51 tax benefits for the same capital improvement work. HPD …
1:41:54
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4 min
What are the new enforcement mechanisms for the J51 program?
The Deputy Commissioner explains that the new J51 program iteration has much more expansive enforcement options compared to the previous version. - HPD can revoke benefits if owners fail to …
1:46:52
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87 sec
What assistance or help will HPD provide for residents who want to pursue a private right of action?
HPD has not previously considered providing assistance for tenants pursuing a private right of action. - HPD has other teams that help tenants organize and advocate - Other agencies also …
1:48:24
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60 sec
What kinds of complaints can tenants bring to courts under a private right of action when relying on J51 requirements?
Tenants could use a private right of action to challenge the rent being requested if it does not comply with J51 (tax exemption program) requirements, especially in cases involving litigation …
1:49:25
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55 sec
How are tenants informed about their rights under the J-51 tax exemption program?
The assistant commissioner explains that tenants are informed about their rights under the J-51 program through the lease notification requirement. - There is a requirement for tenants to be notified …
1:50:22
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26 sec
Do tenants receive notification when their building receives Article 11 tax benefits?
The council member asks if tenants are notified when their building receives Article 11 tax benefits. The associate commissioner from HPD responds that HPD does require notification to tenants. - …
1:50:50
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42 sec
What is the purpose and usage of the checklist for requesting additional information or documentation from applicants?
The council member asks about a checklist used by the Department of Housing Preservation and Development (HPD) to request additional information or documentation from applicants. - The checklist is utilized …
1:51:34
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67 sec
What methodologies will be used to determine reasonable costs for certified alterations?
The assistant commissioner explains that the USRS means system, which estimates construction costs based on market equivalents, will be used to establish the reasonable costs for certified alterations. - USRS …
1:52:41
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26 sec
How often will cost schedules be updated to reflect construction cost changes?
The Department of Housing Preservation and Development intends to update cost schedules more frequently than in the past to reflect changes in construction costs. - Cost schedules will be updated …
1:53:08
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55 sec
What is the recommended process for ensuring ongoing review and attractiveness of incentive programs?
The council member asks about a recommendation for an annual check-in process to discuss and ensure that incentive programs remain attractive and are properly implemented. - There is a suggestion …
1:54:04
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34 sec
What types of evidence does HPD consider satisfactory for proving program eligibility?
The Housing Preservation and Development (HPD) accepts various documents as satisfactory evidence for determining program eligibility costs: - Statements from certified public accountants (CPAs) outlining costs associated with payments made …
1:54:37
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62 sec
When does HPD conduct inspections to verify the completion and cost of claimed work?
The council member asks about the timing for HPD to inspect completed work and verify claimed costs. The assistant commissioner explains that after a project submits an application for work …
1:55:41
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33 sec
What are the affordability requirements for housing units in the program?
The Associate Commissioner explains that 50% of units must have rents affordable for households earning up to 80% of the Area Median Income (AMI), including those at 20% of AMI. …
1:56:16
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50 sec
What is the change in the abatement formula regarding taxes on land versus improvements?
The council member asks if there is a change in the abatement formula from previous versions, where it no longer reduces taxes on the land but only on improvements. The …
1:57:11
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104 sec
Ambur Nicosia, Board President at Penn South, on the Importance of the J51 Program for Preserving Affordable Housing at Penn South Cooperative
Ambur Nicosia, the Board President of Penn South cooperative, emphasizes the significance of the J51 program in maintaining affordability at their housing community, which is the largest affordable limited equity …
2:01:40
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130 sec
Emily Klein, Senior Policy Associate at the Community Preservation Corporation, on the Need to Pass Introduction Number 654 to Support Renovations of New York City's Aging Affordable Housing Stock
Emily Klein testifies in support of Introduction Number 654, an incentive program to fund renovations of New York City's aging affordable housing stock. - The city's housing stock has a …
2:04:00
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125 sec
Sharon Brown, Member of the Public, on Concerns Regarding Housing Requirements, the Treatment of Undercover Public Servants, and Underpayment across Professions
Sharon Brown voices her disgust at the housing situation negatively impacting police, firefighters, and military personnel, including those working undercover who witness the unfair treatment of regular people. - She …
2:06:13
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144 sec
Adam Roberts, Policy Director for the Community Housing Improvement Program (CHIP), on Concerns with the New J51 Tax Abatement Program for Rent-Stabilized Buildings
Adam Roberts from the Community Housing Improvement Program (CHIP) testifies that the proposed new J51 tax abatement program will be ineffective for most rent-stabilized buildings due to restrictive requirements. - …
2:09:01
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166 sec
Edward Yaker, Chair of the Coordinating Council of Cooperatives, on the Critical Need to Reauthorize the J51 Program for Affordable Housing Cooperatives
Edward Yaker, Chair of the Coordinating Council of Cooperatives, testifies on the dire situation facing affordable housing cooperatives due to rising costs. - Affordable housing cooperatives are confronting significant cost …
2:11:59
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82 sec
