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"If an affordable unit was financed through a city tax abatement program such as 421-a or the Low Income Housing Tax Credit (both part of the 80/20 program), you should be aware of when that abatement expires, because at that time the rent stabilization will no longer be in place and you may not be entitled to renew your lease. All of this information should be made available at the first lease signing."
In other words, your affordable rent is not forever.
In my friend’s new lease which she just signed, information about the 421a program was spelled out and the exact date was given when her apartment will no longer be covered. I think in my friend’s case, she gets 20 years of affordability.
It depends. My lease says explicitly that even after the rent stabilization technically expires, the rent has to follow the RGB guidelines until I, personally, move out. So if I, personally, live here another 35 years, the rent will still effectively be the stabilized rent. But the next tenant AFTER the last tenant who starts a lease within the rent stabilization period will be market-rate. Depends on the program, I think.
Besides his push for "equality" and "inclusion" in housing; Sam The Eagle also pushed for creating more permanently affordable units. Thus situations vary by building and everyone has to read terms spelled out in their lease carefully.
Of course permanently affordable requires deeper subsidies and also market rate tenants must pay more to make up difference. This is why terms vary between buildings, and also number of units available.
Keeping units "affordable" for ten years is one thing; but twenty, thirty or more is another.
I read somewhere that many landlords abandon their properties when the tax abatement ends as they don’t want to pay the increase in taxes. So I don’t think they have any say if they want to continue the program.
I read somewhere that many landlords abandon their properties when the tax abatement ends as they don’t want to pay the increase in taxes. So I don’t think they have any say if they want to continue the program.
You may have gotten that message confused with condo owners.
Owners of rental properties do not abandon or otherwise leave their buildings once 421-a or whatever tax exemptions end. Everyone knows (or at least think they do) when tax breaks expire and thus costs are baked into cake. Only issues arise when LL's think they are free to leave, and or end rent regulation oversight of apartments, but tenants and politicians believe differently.
On condo side, yes; tons of those who buy early when building has tax abatement look to sell before or shortly after things expire. This is for very good reasons; they were paying dramatically lower taxes for all those years, now things are set to rise, sometimes by quite a bit.
Owning a condo in many ways resembles a private home. You pay property taxes directly and thus any increase or decrease is felt at once. Also as with private homes higher taxes can (and often do) act to decrease prices because potential buyers compute annual RE taxes into cost of ownership.
Many will buy a condo (especially in new development) that has tax abatement with clear intentions of moving house before the thing expires. They keep one eye on calendar, and another on resale prices of comparable units in building and area. As expiration time nears for abatement they will list that apartment in hopes some other poor slob will take it off their hands.
Of course as with private homes some condo owners simply cannot afford substantial RE tax increases. They can qualify for a mortgage/afford to buy and own *now*, but in ten, twenty or so years in future things might be different.
If they're still getting the tax break, I'm not sure what's particularly absurd about expecting them to continue to extend the associated benefits.
This depends upon what sort of building (condo or rental) received tax abatements.
Most tax abatement schemes run 10 to maybe 25 years at max. OTOH NYC and many other areas look to extend rental "affordability" to cover rental apartments for thirty or forty years if not more.
As noted upthread certain NYC "affordable" units will effectively move to RS system for decades after tax abatement treatments expire. That is BdeB's way to ensure at least current and perhaps one or two successive tenants will still have access to "affordable housing".
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