467-m: Affordable Housing from Commercial Conversions

Housing Preservation & Development


Tax Credits and Incentives

467-m: Affordable Housing from Commercial Conversions


467-m

New York State Real Property Tax Law (“RPTL”) § 467-m (“Act”) adopted the Affordable Housing from Commercial Conversions Tax Incentive Benefits (“AHCC Program Benefits”) program in order to provide real property tax exemptions for the conversions of non-residential buildings, except a hotel or other class B multiple dwelling, to Eligible Multiple Dwellings. These AHCC Program Benefits are available to Eligible Multiple Dwellings that contain six or more dwelling units, where the Eligible Conversions commenced after December 31, 2022, and on or before June 30, 2031, and where the Eligible Conversions are completed on or before December 31, 2039. Eligible Multiple Dwellings must be operated as rental housing.

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467-m Tax Incentive

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General

Real Property Tax Law Section 467-m establishes the Affordable Housing from Commercial Conversions Tax Incentive Benefits program (or “AHCC Program Benefits”). It provides a partial tax exemption for new multiple dwellings in which all of the dwelling units are operated as rental housing where such multiple dwellings are created from the conversion of non-residential buildings and also contain the requisite affordable housing.

Capitalized terms not specifically defined herein are defined in New York State Real Property Tax Law Section 467-m and Chapter 64 of Title 28 of the Rules of the City of New York, available here and here, respectively.

Eligible Projects

Eligible Multiple Dwellings created by an Eligible Conversion of a Non-Residential Building, except for hotels or other class B Multiple Dwellings.

The Commencement Date of the Eligible Multiple Dwelling must be after December 31st, 2022, and on or before June 30th, 2031.

The Completion Date of the Eligible Multiple Dwelling must be on or before December 31st, 2039.

Geography

Eligible Multiple Dwellings may be created citywide.

Eligible Multiple Dwellings are subject to varying benefit schedules as further described below.

Benefits

AHCC Program Benefits schedules are determined by an Eligible Multiple Dwelling’s:

Geographic location; and

Commencement Date as denoted in the table below.

Affordability Requirements

At least 25% of the dwelling units in the Eligible Multiple Dwelling are rental Affordable Housing Units of which:

At least 5% are Affordable Housing Forty Percent Units; and

The weighted average Area Median Income (“AMI”) of all Income Bands for all of the Affordable Housing Units does not exceed 80% of AMI; and

There are no more than three Income Bands for all Affordable Housing Units and;

No Income Band exceeds 100% of AMI.

HPD can establish by rule marketing bands for the Affordable Housing Units.

Affordable Housing Units are permanently subject to Rent Stabilization.

Affordable Housing Units shall share the same common entrances and common areas as rental Market Units in an Eligible Multiple Dwelling and shall not be isolated to a specific floor or area.

Affordable Housing Units must either:

Have a unit mix proportional to that of the rental Market Units; or

At least 50% of the Affordable Housing Units have two (2) or more bedrooms and no more than 25% of the Affordable Housing Units have less than one (1) bedroom.

Where HPD denies an Application for AHCC Program Benefits, Affordable Housing Units occupied by HPD-approved households remain subject to Rent Stabilization until vacancy by such household.

Rent Stabilization registrations required to be filed for the Affordable Housing Units shall specifically denote “AHCC program affordable housing units”.

HPD may promulgate by rule requirements to ensure ongoing compliance with the Affordability Requirements.

Rental Market Units are not subject to Rent Stabilization unless, in the absence of AHCC Program Benefits, such units would be subject to Rent Stabilization.

Building Service Employees Requirements

Building Service Employees employed by Covered Building Service Employers in Eligible Multiple Dwellings shall receive the applicable prevailing wage for the duration of the AHCC Program Benefits period. Exempt Eligible Multiple Dwellings include:

Eligible Multiple Dwellings containing less than thirty dwelling units; or

Eligible Multiple Dwellings whose Eligible Conversion is carried out with the substantial assistance of grants, loans or subsidies provided by a federal, state or local government agency or instrumentality pursuant to a program for the development of affordable housing.

The New York City Comptroller enforces the Building Service Employees prevailing wage requirements and may refer instances of non-compliance to HPD for AHCC Program Benefits revocation.

Procedural Requirements

Eligible Multiple Dwellings must commence construction prior to applying for AHCC Program Benefits.

Applicants must submit a Workbook, available below, to HPD in the prescribed timeframe set forth in Chapter 64 of Title 28 of the Rules of the City of New York.

One Application must be filed for each Eligible Multiple Dwelling and AHCC Program Benefits will be retroactively applied.

Applications for AHCC Program Benefits shall not be submitted to HPD earlier than the Completion Date of the Eligible Multiple Dwelling and must be submitted no later than one year after the Completion Date of the Eligible Multiple Dwelling.

Applicants for AHCC Program Benefits must certify their compliance with Building Service Employee prevailing wage provisions unless they are exempt.

Applicants for AHCC Program Benefits must record a specified legal instrument against the Eligible Multiple Dwelling through which the affordability, Rent Stabilization, permitted rent and other requirements associated with AHCC Program Benefits will be enforced.

Applicants must pay a filing fee with the submission of the Application, a portion of which is required to be paid at an earlier stage for the Workbook process.

How to Apply

Projects seeking AHCC Program Benefits must submit the Affordable Housing from Commercial Conversions – 467-m Units Workbook within the prescribed timeframe set forth by HPD rules.

All projects must, after receiving an approved Workbook from HPD, submit the Notice of Intent to begin marketing to HPD Marketing.

After such submission to HPD Marketing such projects must also send an executed Marketing Monitoring Contract with a Marketing Monitor.

All projects are required to submit a completed, draft restrictive declaration with the Application.

Affordable Housing from Commercial Conversions – 467-m Units Workbook (updated 12/23/2024)

Affordable Housing from Commercial Conversions – Application (added 12/23/2024)

Template for 467m Marketing Monitoring Contract (added 12/23/2024)

Template for 467m Restrictive Declaration (added 1/10/2025)

Note: The workbook is being provided solely to assist you in determining whether the requisite percentage of the dwelling units in the proposed Eligible Conversion meets the Affordability Requirement as set forth in Real Property Tax Law Section 467-m(1)(b) as well as whether the Affordable Housing Units therein comply with the unit mix and distribution requirements set forth in Real Property Tax Law Section 467-m(6)(a) and (b). This spreadsheet is provided for your convenience only. HPD will review the initial monthly rents, unit sizes and unit locations proposed for the Affordable Housing Units for the proposed Eligible Conversion as part of the RPTL § 467-m Affordable Housing from Commercial Conversion Application and will determine whether the proposed Eligible Conversion meets these requirements in accordance with the provisions set forth in RPTL § 467-m and any rules HPD proposes in accordance with the statute. It is the sole responsibility of the Applicant to complete this Workbook and to demonstrate compliance with any rules promulgated in accordance with RPTL Section 467-m.

Should there be additional questions regarding the Affordable Housing from Commercial Conversions Tax Incentive Benefits program, please write to HPD at 467-m_AHCC@hpd.nyc.gov or at the following address:

Attn: Division of Housing Incentives
New York City Department of Housing Preservation and Development
100 Gold Street, New York, NY, 10038

467-m Requirements FAQ for Prospective Applicants (updated 01/16/2025)

Affordable Housing from Commercial Conversions Interim Commencement Guidance Bulletin

Affordable Housing from Commercial Conversions Interest Form

More information on AHCC Program Benefits will be published by HPD on this webpage.