Remarks by Mayor Bloomberg at a Public Hearing on Local Laws
“The final two bills before me expand the City’s ability to provide incentives to encourage Mitchell-Lama developments to remain as a source of affordable housing. Introductory Number 203, sponsored at the request of our Administration by Council Members Dilan, Gonzalez, Martinez, McMahon, Stewart, Seabrook, Lappin, Vacca, Palma, Recchia, Garodnick, White, Gentile, Dickens, Sears and Weprin, allows Mitchell-Lama developments to be eligible for the J-51 tax benefit even if the renovation work necessary to receive the benefit is financed with a grant, loan or subsidy from a federal, state or local entity.
“The J-51 tax benefit program, administered by the Department of Housing Preservation and Development, is a tax incentive program that provides real property tax benefits to owners of multiple dwellings who rehabilitate or replace major building-wide systems such as boilers, roofs and elevators.
“Currently, only a Mitchell-Lama development that receives a privately financed rehabilitation loan can benefit from the J-51 exemption. This bill broadens this restriction by extending the tax exemption to owners that receive low interest governmental rehabilitation loans as well. To be eligible for such a tax benefit, owners must remain in the Mitchell-Lama program for an additional fifteen years. This legislation creates a strong incentive to rehabilitate multiple dwellings while ensuring that the developments remain a source of affordable housing.
“Introductory Number 204, sponsored at the request of our Administration by Council Members Dilan, Gonzalez, Martinez, McMahon, Seabrook, Lappin, Palma, Recchia, Garodnick, White, Gentile, Dickens, Sears and Weprin, rectifies an archaic State legislative reference that banned cooperatives from receiving J-51 benefits if their assessed value exceeded $30,000 per dwelling unit. In 1992, this cap was increased to $40,000. This ban has long been inappropriate since the assessed value of a Mitchell Lama unit does not reflect the value of the apartment. Due to a rise in assessed values, currently over 4,300 units of Mitchell Lama cooperatives are assessed at over $40,000 per unit. This is due to the rising property values of neighborhoods in which Mitchell-Lama cooperatives are located. Despite the higher assessed values, the developments remain a vital affordable housing resource that we need to preserve.
“Introductory Number 204 makes an important correction by allowing thousands of Mitchell-Lama cooperative units to be able to take advantage of the J-51 program for the first time when rehabilitating their properties regardless of the properties assessed value. This bill also requires that the developments remain in the Mitchell-Lama program for fifteen years from the date of the benefit.
“Both Introductory Numbers 203 and 204 will help maintain New York City’s affordable housing stock by spurring much needed rehabilitation at lower interest rates than private sector financing, while keeping more developments from leaving the Mitchell-Lama program.
“I would like to thank the Department of Housing Preservation and Development Commissioner Shaun Donovan and his staff for their work on these bills. I would also like to thank the Council for approving this legislation.”