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From a property developer's perspective, how does it work when it comes time to determine the AMI ranges? I read an article that said there are different incentive options for 421a:
Quote:
the developers have to choose between Affordability Options A, B, or C. When no other incentives are at play (i.e. Inclusionary Housing, Low-Income Housing Tax Credits, HPD financing, etc.), developers tend to select the Affordability Option C with its very generous 130% AMI income limitation.
Edit: I also found this report about 421a that explains the different affordability options on page 5. I've only had a chance to skim the report, as it's quite long, but the gist seems to be that the most recent version of 421a, called Affordable New York, has encouraged higher AMIs. I couldn't find a specific explanation of why, though. Are developers just not given sufficient incentives to include lower AMIs? Are there reforms being proposed?
Last edited by grandstreet; 05-06-2022 at 11:50 AM..
I looked at the report you posted. If I'm understanding it, it seems that with a couple caveats, developers get the same 100% tax exemption for 25 years whether they choose option A (10% of units at 40% AMI, 10% of units at 60% AMI, and 5% at 130% AMI) or option C / option G (30% of units at 130% AMI).
Given that, it seems like a no-brainer that any developer would go with option C or G. Who designed this policy??
On another note, I also noticed that none of the listed options contain 165% AMI, yet we keep seeing buildings that offer 165% AMI units. Are those part of a different program?
The policy is under the 421-a tax exemption which was created by the state. This year it expires and they are working on replacing it with a better tax exemption. Governor Hochul has drafted a replacement. I spoke about it in this thread :https://www.city-data.com/forum/new-...placement.html
"The 2022 proposal retains the structure of the current option A for rental developments with 30 units or more, lowering the income restriction for 5% of the units from 130% of AMI to 80%. For rental developments with less than 30 units, the 2022 proposal envisions that 20% of the units are available for incomes up to 90% of AMI. Finally, the proposal includes a homeownership component that limits initial and subsequent resales for the first 40 years to buyers with incomes at 130% of AMI. In the case of rental buildings, tax exemptions are full for 25 years and equal to the share of income-restricted units for 10 additional years. Homeownership developments would receive 40 years of full tax exemption. Table 4 below summarizes the main provisions."
They essentially want to get rid of the 130AMI option. As for the ones that are higher than 130, I had the same question and someone answered me in this thread: https://www.city-data.com/forum/new-...han-130-a.html
Thanks again, super helpful. The comptroller's report was especially enlightening. Hochul's proposal seems like a step in the right direction to me, but the report makes a pretty convincing case that even bigger changes are needed.
Thanks again, super helpful. The comptroller's report was especially enlightening. Hochul's proposal seems like a step in the right direction to me, but the report makes a pretty convincing case that even bigger changes are needed.
Anytime! Interested to see how it’s all pans out. The current tax exemption expired next month and they have until December to replace it. Since they already have draft of a new one I’m hoping it doesn’t take until December. The sooner we have a better tax exemption the better.
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