Bill Morris in Legal/Financial on November 26, 2021
In a late push to revive the prized J-51 tax abatements that help defray the cost of capital improvements in co-ops and condos, the New York City Council's Committee on Housing and Buildings will hold a virtual hearing at 1 p.m. on Monday, Nov. 29.
The subject of the hearing will be a bill proposed by a quartet of Democrats: Kalman Yeger and Robert Cornegy of Brooklyn, and Barry Grodenchik and Paul Vallone of Queens. Their bill will bring New York City in line with the state Legislature, which last summer extended the J-51 tax abatements for capital projects completed by June 30, 2022. For buildings that qualify, their property tax assessment is frozen at the rate before the improvements were made, which results in a lower property tax bill.
The bill before the City Council, like the state law, would make the tax breaks available to buildings with an average assessed unit value of $40,000, up from the previous limit of $35,000. (The assessed value is part of the formula that determines a property’s tax bill; it is a percentage of the market value.) In extending the program, the state Legislature also authorized local governments to renew the program in their local jurisdictions. So far, the New York City Council has not done so.
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"There's now real movement to get this bill passed," says Geoffrey Mazel, a partner at the law firm Hankin & Mazel and counsel for the Presidents Co-op and Condo Council, a vocal supporter of the J-51 abatement. "This has been foundering since June of 2021, when the state passed it. It's an established program for working-class homeowners. Hopefully, there won't be much opposition."
In the past, there has been opposition to the tax breaks, mainly from council members who have contended that the tax break is a giveaway for wealthy co-op and condo residents. That argument is belied by the $40,000 limit on assessed value for qualified buildings – an assessment that marks a building as solidly middle class.
Grodenchik, one of the bill's sponsors, is optimistic that such opposition can be overcome. He tells Habitat: "I'm hopeful we'll be able to get an extension before the end of the year."
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