The property tax break J-51 expires this year.
The abatement could be revived as part of the state budget: Gov. Kathy Hochul included an amended version of the program in her executive budget. Sen. Brian Kavanagh, who chairs the Senate’s housing committee, has also proposed a revamp of the program.
The property tax break is available to certain multifamily properties, condos and co-ops that undergo renovations. Both the governor’s and the senator’s proposals would revive the program for 10 years, rather than the typical four-year window provided in previous years.
While we’re on the subject of similarities between the proposals: The value of the tax break under both would be increased to as much as 100 percent of what the city considers a “reasonable” price for various repairs (the city releases a cost schedule for renovation work that has previously been a source of controversy). The current program caps the value at 70 percent. The value of the annual abatement can not exceed 8.33 percent of renovation costs over the course of the up to 20-year break.
But Kavanagh’s bill, which he first introduced last year, differs from the governor’s in a few key ways. For one, it widens eligibility to include buildings where at least 90 percent of the units are rent-regulated. That seems to be a nod to criticism that the current program’s parameters close out buildings in need.
As the program stands, the abatement is limited to buildings that are 50 percent affordable, owned by limited-profit housing companies or that receive “substantial government assistance.” The governor’s proposal leaves those parameters intact.
The bill also seeks to change eligibility for condos and co-ops. Under the current program, such buildings are eligible if units have an average assessed value of $45,000. Hochul’s executive budget legislation raises that threshold to $60,000, while Kavanagh’s increases it to $75,000, allowing for annual increases based on inflation.
It remains to be seen to what extent J-51 will be reformed as part of the state budget and to what extent lawmakers will prioritize changes this year. Negotiations are expected to heat up this week with the release of the Democratic majorities’ respective one-house budget resolutions.
What we’re thinking about: What is something real estate-related that has been proposed as part of the state budget (or that should have been) that you think deserves more attention? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Assembly member Emily Gallagher hopes the state budget includes funding for a social housing pilot program in Kingston, N.Y. Gallagher introduced a Social Housing Authority bill in 2024, and thinks that a pilot will help inform what tweaks need to be made “before we have a universal program, which is inevitable.”
Elsewhere in New York…
— The CityStore briefly sold coffee mugs with the New York City seal declaring Zohran Mamdani as the 111th mayor before a historian discovered that the official count failed to include a 17th Century mayor’s second, nonconsecutive term. Gothamist reports that the store now sells mugs describing Mamdani as the 112th mayor and has about 275 mugs with the incorrect 111th label in storage.
— During an interview on Monday, Sen. Brian Kavanagh said lawmakers are conferring with the Office of Court Administration to figure out the potential cost of an eviction diversionary program promoted by the New York Housing Conference. The housing group has called on the state to include $17 million
— The Alexander brothers were found guilty of all counts in their federal sex trafficking trial. Be sure to check out my colleagues’ exhaustive coverage of the verdict and what led up to it.
Closing Time
Residential: The top residential deal recorded Monday was $19.4 million for a penthouse at 812 Park Avenue. The Lenox Hill co-op unit is 5,400 square feet. Serhant’s Ryan Serhant and Donna Strugatz have the listing.
Commercial: The top commercial deal recorded was $101.1 million for 42-02 Northern Boulevard. The Long Island City retail building was a Food Bazaar Supermarket, and the building is about 75,000 square feet.
New to the Market: The highest price for a residential property hitting the market was $46 million for 117 East 70th Street. The Lenox Hill mansion is 12,300 square feet. Brown Harris Stevens Paula and Richard Del Nunzio have the listing.
— Joseph Jungermann