Affordable New York and 421-a Housing Programs
Herrick is a recognized leader in the affordable housing space. Commercial real estate owners, developers, and lenders rely on our guidance on the Affordable New York Housing Program, (421-a(16)) and its successor program, Affordable Neighborhoods for New York (485-x) and the Affordable Housing from Commercial Conversions Tax Incentive Program (467-m).
Our team is regularly called on to educate financial institutions, brokerage firms, title insurance companies, architecture firms and major industry groups on the nuances of both programs.
Attorneys in our government relations group are a valuable resource to clients facing non-compliance investigations by the New York State Attorney General’s Office and the Office of the New York City Comptroller.
Partnering Throughout the Development Process
- We counsel our clients in the pre-construction phase by leveraging Herrick’s combined experience in New York City zoning and land use, Mandatory and Voluntary Inclusionary Housing, the affordable housing marketplace and New York City real property taxes to project the efficacy of the proposed development and to ensure a conforming design process.
- During construction we work with our clients to determine the maximum affordable rents, wage unit stacking and proportionality of the affordable unit types/sizes relative to the market rate units.
- When construction has concluded, we guide our clients, along with their architect, through the application process to receive a Certificate of Eligibility.
- We offer clients project consulting services for minimum construction wage and Minority and Women Business Entrepreneur (M/WBE) requirements under 485-x.
- Additionally, we offer formal legal opinions including tax projections detailing the project’s eligibility for the Affordable New York, Affordable Neighborhoods for New York and Affordable Housing from Commercial Conversions Tax Incentive programs. These may be presented to perspective purchasers or lenders.
The Affordable New York program requires construction to commence lawfully and in good faith by installing a footing or foundation on or before June 15, 2022. Construction must be complete by June 15, 2026, for developers seeking to utilize 421-a Options C or G. Construction must be complete on or before June 15, 2031, for developers utilizing Options A, B, D, E or F and have filed a declaration of intent with HPD.
The Affordable Neighborhoods for New York Program requires construction to commence lawfully and in good faith by installing a footing or foundation after June 15, 2022but prior to June 15, 2034. Construction must be complete by June 15, 2038.
The Affordable Housing from Commercial Conversions Tax Incentive Program requires construction to commence lawfully by June 30, 2031. Construction must be complete by December 31, 2039.
Before the Current Affordable New York
The Herrick team continues to assist developers with the predecessor program to the current Affordable New York. The "old" 421-a law (421-a(1-15)) remains available for projects which commenced construction on or before June 15, 2015 or for projects which commenced construction between June 16, 2015 and December 31, 2015 and completed construction prior to December 31, 2019.
Under this "older" program, developers are eligible to receive benefits either by being located outside a geographic exclusion area, providing at least 20% of the units as affordable housing or surrendering 421-a negotiable certificates (depending upon property location) to receive 421-a benefits without offering affordable housing.
Industrial Commercial Abatement Program (ICAP)
Herrick counsels clients who are owners or tenants of commercial properties applying for benefits through the Industrial Commercial Abatement Program (ICAP). ICAP is a New York City property tax abatement offered for new construction and renovations of properties located within the five boroughs of New York City.
Much like with 421-a program, our team regularly educates financial institutions, brokerage firms, title insurance companies, architecture firms and major industry groups on the nuances and benefits of the ICAP program.
Herrick attorneys counsel clients on the laws and rules which govern ICAP and the construction compliance requirements. We leverage the experience of the Land Use & Zoning Planning and Development Specialists to work with our clients and ensure the active participation of Minority and Women Business Entrepreneur’s (M/WBE) in the bidding process, while actively monitoring the progress before the Department of Small Business Services.
Partnering Throughout the Development Process
- We counsel our clients in the pre-construction phase by leveraging Herrick’s combined experience in New York City zoning and land use and New York City real property taxes to project the efficacy of the proposed development and to ensure a conforming design process.
- During construction we work with our clients to ensure compliance with ICAP M/WBE contractor bid procurement procedures and construction reporting requirements for contractors, vendors and suppliers.
- We provide monthly status reports to clients detailing M/WBE participation and construction employment submissions.
- When construction has concluded, we guide our clients, along with their architect and accountant, through the application process to receive a Certificate of Eligibility.
- Additionally, we offer formal legal opinions including tax projections which may be presented to perspective purchasers or lenders detailing the project’s eligibility for the ICAP program.
ICAP requires the filing of a preliminary application prior to March 1, 2025 and construction to commence prior to April 1, 2025.