QUESTION
What factors contributed to the average cost per unit being around $10,000 for the J51 housing incentive program in 2018-2020?
1:21:27
·
107 sec
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 in recent years.
- Building size impacts cost per unit, with larger buildings having lower costs since major systems like boilers are spread across more units
- The number of buildings receiving J51 benefits each year affects the overall program cost
- Past usage of J51 when benefits lasted 14-34 years still impacts current costs since some buildings from that period continue receiving benefits
- Both the quantity of participating buildings and their characteristics in a given year determine the average cost per unit
Pierina Ana Sanchez
1:21:27
I saw that there were some years where the average cost per unit was closer to 10,000.
1:21:34
Do you know why that would have been.
1:21:36
So in 2018, 2019, 10200, 2020 was 10600 on average.
Kim Darga
1:21:44
Is that so you're looking at the average cost for all properties, or those
Pierina Ana Sanchez
1:21:48
The average cost for the properties?
1:21:50
Yeah.
1:21:50
Regarding the J51?
1:21:52
Sorry.
1:21:53
The the the the cost to the city for the for providing the incentive?
Kim Darga
1:21:57
For all properties in a given year.
Pierina Ana Sanchez
1:21:59
Mhmm.
Kim Darga
1:22:00
Yeah.
1:22:00
So that there's a couple of things that could impact the cost per d u, one building size.
1:22:06
The larger the buildings are, generally the low the cost per unit because this is a program that focuses on major building systems.
1:22:14
So if you have a 10 unit building, putting a boiler in, versus a 30 unit building putting the boiler in, the cost per unit.
1:22:21
The system is the same, but the cost per unit is certainly less for the larger building.
1:22:26
2nd, you know, I think the cost in aggregate for the city is a function of also how many buildings have the benefit in a given year.
1:22:38
Right?
1:22:38
So in the what we saw is in the old program, the benefit was for 14 or 34 years, up to 14 or 34 years.
1:22:47
And so in the mid 2000 I mean, sorry, in the 19 nineties, we were granting benefits or early 2000 where there was huge usage of J51, those buildings were still getting benefits a few years ago.
1:23:03
So it's a little bit of a function of how many benefits were granted in the past, as well as the characteristics of the buildings in a given year.
1:23:11
And so
Pierina Ana Sanchez
1:23:14
That's helpful.