As part of her 2024 budget proposal, Governor Hochul has proposed the addition of §467-m to the Real Property Tax Law. Dubbed “Affordable Housing from Commercial Conversions” or “AHCC,” the proposal would incentivize the conversion of non-residential buildings in New York City to mixed-income rental apartments. Specifically, as will be detailed below, owners converting their non-residential buildings to residential rental apartments would receive a property tax exemption in exchange for making at least 20% of the new apartments subject to affordability and rent stabilization requirements (“Affordable Units”). Notably, while the Affordable Units would remain affordable in perpetuity, the remaining units (up to 80%) would be free-market from their inception.
While certain non-residential buildings will also require changes to zoning regulations and the Multiple Dwelling Law to be converted to residential use, the AHCC proposes a property tax incentive to encourage owners to include Affordable Units (instead of just building condominium units or free market rentals). It remains to be seen whether the proposed property tax benefit would be sufficient to incentivize owners to have their non-residential buildings provide the Affordable Units required by AHCC
