485-x: Affordable Neighborhoods for New Yorkers

Housing Preservation & Development


Tax Credits and Incentives

485-x: Affordable Neighborhoods for New Yorkers


New York State Real Property Tax Law (“RPTL”) § 485-x (“Act”) adopted the Affordable Neighborhoods for New Yorkers Tax Incentive program (“ANNY Program Benefits”) in order to provide a real property tax exemption for the construction of new Multiple Dwellings and Eligible Conversions, except for hotels. These ANNY Program Benefits are available to Multiple Dwellings or Homeownership Projects that contain six or more dwelling units, commenced after June 15, 2022, and on or before June 15, 2034, and are completed on or before June 15, 2038.

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

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485-x Tax Incentive

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485-x

Affordable Neighborhoods for New Yorkers, a new tax exemption program also known as 485-x, was created to support the creation of affordable housing in New York City.

“Our City faces the worst housing shortage in half a century so we’re laser focused on creating more affordable apartments, especially at rents that working New Yorkers, seniors and anyone who’s struggled, can afford. This City is for all of us and Affordable Neighborhoods for New Yorkers will let us build housing so that it works for everyone.”

--Housing Preservation and Development Commissioner Adolfo Carrion Jr.

Real Property Tax Law Section 485-x was adopted on April 20, 2024, and creates Affordable Neighborhoods for New Yorkers Tax Incentive Benefits (“ANNY Program Benefits”). On December 16, 2024, HPD adopted Chapter 63 of Title 28 of the Rules of the City of New York to implement the Affordable Neighborhoods for New Yorkers Tax Incentive program. Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the state law and HPD rules. You can read the state law and the HPD rules.

Eligible Projects

ANNY Program Benefits are available to Eligible Multiple Dwellings that commence construction after June 15, 2022, and on or before June 15, 2034, and that complete on or before June 15, 2038.

The requirements for ANNY Program Benefits are determined by building size, location and tenure.

Permanent Affordability

All Affordable Housing Units will be permanently affordable and all Restricted Units, which includes Affordable Housing Units and dwelling units subject to Rent Stabilization in accordance with Option C, will be permanently rent stabilized.

All Restricted Units occupied by tenants whose eligibility was approved by HPD also remain subject to Rent Stabilization until such tenants vacate if such tenants occupied such unit before the Application was denied or such Application was either never filed or withdrawn.

Application Registration

Applicants must submit a registration notice in order to apply for benefits. The registration notice for projects with a Commencement Date on or after April 20, 2024 is available in the links below, and must be filed no later than six months after a project’s Commencement Date if such Commencement Date is on or after April 20, 2024. For projects that commenced before April 20, 2024, the deadline to file such registration notice was December 14, 2024. HPD may impose a penalty not to exceed 100% of the Application filing fee for failure to timely file the registration notice.

Access the 485-x Registration Form for projects with a Commencement Date on or after April 20, 2024. This Registration Notice will be open and accessible through the life of the program and must be completed no later than six months after such Commencement Date.

Eligible Rental Projects

Below is a summary of the eligibility options available for ANNY Program Benefits. The option must be selected in the initial submission of any required Workbook and Application. Please refer to the Real Property Tax Law Section 485-x and Chapter 63 to Title 28 of the Rules of the City of New York for any additional requirements.

Option A: Large Rental Projects and Very Large Rental Projects

Large Rental Projects with 100 or more residential dwelling units that meet the eligibility requirements receive a 35-year benefit and up to three years of Construction Period benefits.

25% of the units must be Affordable Housing Units at an average of 80% Area Median Income (AMI) with no more than 3 AMI income bands allowed with the highest band capped at 100% of AMI

Very Large Rental Projects with 150 or more residential dwelling units located in Zones A and B that meet the eligibility requirements receive a 40-year benefit , up to five years of Construction Period benefits in Zone A and up to three years of Construction Period benefits in Zone B.

25% of the units must be Affordable Housing Units at an average of 60% of AMI with no more than three AMI income bands allowed with the highest band capped at 100% of AMI.

"Zone A" includes any tax lot now existing or hereafter created which is located entirely south of 96th street in the borough of Manhattan or in any of the following neighborhood tabulation areas as most recently defined by the Department of New York City Planning: Brooklyn 0101, Brooklyn 0102, Brooklyn 0103, Brooklyn 0104, and Queens 0201.

"Zone B" includes any tax lot now existing or hereafter created which is located entirely in any of the following neighborhood tabulation areas as most recently defined by the Department of New York City Planning: Brooklyn 0201, Brooklyn 0202, Brooklyn 0203, Brooklyn 0204, Brooklyn 0601, Brooklyn 0602, Brooklyn 0801, Queens 0105, and Queens 0102.

Option B: Modest Rental Projects

Modest Rental Projects with at least 6 and no more than 99 residential dwelling units that meet the eligibility requirements receive a 35-year benefit and up to three years of Construction Period benefits.

20% of the units must be Affordable Housing Units at an average of 80% AMI with no more than three AMI income bands are allowed with the highest band capped at of 100% AMI.

Option C: Small Rental Projects

Small Rental Projects with at least 6 and no more than 10 residential dwelling units that meet the eligibility requirements receive a 10-year benefit and up to three years of Construction Period benefits

At least half of the units must be rent stabilized.

The project cannot be located in Manhattan.

The project cannot be located on a zoning lot that permits residential floor area exceeding 12,500 sq. ft.

Option D: Homeownership Projects

Homeownership Projects with at least 6 units must have an assessed valuation (AV) per square foot (SF) that does not exceed $89 per SF upon the first assessment after the Completion Date. Homeownership Projects that meet the eligibility requirements receive a 20-year benefit and a Construction Period benefit for up to three years

Each owner of a unit in a Homeownership Project must agree in writing to maintain the unit as their primary residence for at least the first five years of ownership

A Homeownership Project cannot be located in Manhattan

Wage Requirements

Below is a summary of the eligibility options available for ANNY Program Benefits. The option must be selected in the initial submission of any required Workbook and Application. Please refer to the Real Property Tax Law Section 485-x and Chapter 63 to Title 28 of the Rules of the City of New York for any additional requirements.

The Building Service Employees prevailing wage requirements are enforced by the New York City Comptroller and provide that all Building Service Employees employed by the Covered Building Service Employer at an Eligible Site must receive the applicable prevailing wage for the duration of the applicable benefit period even if such benefits are revoked or terminated unless:

the Eligible Multiple Dwelling contains less than thirty dwelling units; or

all of the dwelling units in the Eligible Multiple Dwelling are Affordable Housing Units and not less than 50% of such Affordable Housing units are affordable to and restricted to occupancy by persons or families at or below 90% of AMI.

Construction Work on Eligible Sites with at least 100 units is subject to the requirements of Labor Law Sections 220 and 220-b, but must offer a minimum wage of $40/hr which will increase by 2.5% annually.

Construction Work on Eligible Sites with at least 150 units located in Zone A is subject to the requirements of Labor Law Sections 220 and 220-b, but must offer a minimum wage that is the lesser of either $72.45/hr (increasing 2.5% annually) or 65% of the greatest prevailing rate of wages and supplements within a classification; and

Construction Work on Eligible Sites with at least 150 units located in Zone B is subject to the requirements of Labor Law Sections 220 and 220-b, but must offer a minimum wage that is the lesser of either $63/hr (increasing 2.5% annually) or 60% of the greatest prevailing rate of wages and supplements within a classification.

All Eligible Sites with Project Labor Agreements are exempt from these requirements, and a contractor and owner may be excluded with respect to construction employees performing work on an Eligible Site under a Collective Bargaining Agreement or a Jobsite Agreement that expressly waived these wage provisions.

The New York City Comptroller is the enforcement agency for 485-x Construction Work wage requirements.

Other Provisions

A Market Unit shall not be subject to Rent Stabilization unless, in the absence of ANNY Program Benefits, such Market Unit would be subject to Rent Stabilization.

All rental dwelling units in an Eligible Multiple Dwelling must share the same common entrances and common areas as the market rate units in such Eligible Multiple Dwelling and shall not be isolated to a specific floor or area of an Eligible Multiple Dwelling.

If the land on which an Eligible Site is located contained ANY dwelling units three years prior to the Commencement Date, such Eligible Site must contain at least one Affordable Housing Unit for each dwelling unit that existed on such date and was thereafter demolished, removed or reconfigured, provided, however that Small Rental Projects would have to contain one Restricted Unit for each dwelling unit that existed on such date and was thereafter demolished, removed or reconfigured,

HPD has promulgated Chapter 63 of Title 28 of the Rules of the City of New York implementing the 485-x requirement that Eligible Sites, over the course of their design and construction, make reasonable efforts to spend at least 25% of total applicable costs on contracts with minority and women owned businesses.

In addition to revocation, HPD impose fines after the expiration of the applicable benefit period and after notice and opportunity to be heard, for violations of the affordability and Rent Stabilization Requirements schedule and method of calculation to be promulgated by HPD in 28 R.C.N.Y § 63 and will be applicable to whomever owns Eligible Site at time of violation; failure to pay may result in lien or other available remedies.

How to Apply

HPD is currently in the process of updating certain application forms for ANNY Program Benefits. If you have additional questions, please contact 485-x_anny@hpd.nyc.gov or call (212) 863-6603.

All projects are required to submit the Application Registration form from when the Commencement Date occurred as described above on this webpage.

After HPD’s Tax Incentives Programs (TIP) unit assigns a docket sequence to a project seeking ANNY Program Benefits, this sequence must always be referenced when contacting HPD about the project.

Projects seeking ANNY Program Benefits under Affordability Option A or Affordability Option B must submit the Affordable Neighborhoods for New Yorkers – 485-x Units Workbook & Affidavits for Workbook Submission within the prescribed timeframe set forth by HPD rules.

Projects seeking ANNY Program Benefits under Affordability Option A or Affordability Option B, after receiving an approved Workbook from HPD, are required to 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 an approved Marketing Monitor.

All projects must submit the Application specific to their project’s Affordability Option to HPD’s TIP unit within the prescribed timeframe set forth by the Act and HPD rules.

All projects are required to submit the MWBE Affidavit with the Application.

All projects are required to submit a completed, draft restrictive declaration specific to the project’s Affordability Option with the Application.

Documents:

Affordability Option A and Option B – 485-x Units Workbook & Affidavits for Workbook Submission(updated 12/20/2024)

Affordable Neighborhoods for New Yorkers – 485-x Option A & B Application(updated 12/30/2024)

Affordability Option A & Option B Restrictive Declaration Template

(updated 1/8/2025)

Affordable Neighborhoods for New Yorkers – 485-x Option C Application (updated 1/8/2025)

Affordability Option C Restrictive Declaration Template (updated 1/8/2025)

Affordable Neighborhoods for New Yorkers – 485-x Option D Application (added 12/30/2024)

Affordability Option D Restrictive Declaration Template (updated 1/8/2025)

Affidavit for 485-x MWBE Participation Goal (added 12/24/2024)

Template for 485-x Marketing Monitoring Contract (added 12/24/2024)

Note: The Applications and MWBE Affidavit contain interactive content that is best optimized by use of PDF services such as Adobe Acrobat and/or Adobe Reader.

Note: The Workbook is being provided solely to assist you in determining whether the requisite percentage of the dwelling units in the proposed Eligible Site meets Affordability Option A or Affordability Option B, as applicable, as set forth in RPTL § 485-x(1) 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 485-x(8)(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 Site as part of the RPTL § 485-x Affordable Neighborhoods for New Yorkers Application and will determine whether the proposed Eligible Site meets these requirements in accordance with the provisions set forth in RPTL § 485-x and Chapter 63 of Title 28 of the Rules of the City of New York. It is the sole responsibility of the Applicant to complete this Workbook and to demonstrate compliance with RPTL § 485-x and Chapter 63 of Title 28 of the Rules of the City of New York.

If you have additional questions, please contact 485-x_anny@hpd.nyc.gov or call (212) 863-6603.