Revived Tax Break Boosts Landlords’ Renovations for Emissions Compliance
Hold onto your hats, New Yorkers! The J-51 property tax incentive, once a hot topic of criticism, is making a comeback! Proponents are buzzing with excitement, claiming it will provide landlords the nudge they need to revamp their apartments and meet the city’s ambitious emissions standards under Local Law 97.
Adi Talwar
Step inside a co-op boiler room in Queens! With this revamped J-51 tax break, owners can make energy-efficient upgrades like modernizing heating and cooling systems.
Just last week, the New York City Council took a bold step forward by passing landmark legislation aimed at slashing property taxes for renovations. This game-changing move is designed to incentivize landlords to breathe new life into their apartments while ensuring compliance with the city’s stringent climate regulations outlined in Local Law 97.
“This bill will change the game for my building. We’re looking at a savings of $50,000 a year!” exclaimed Elaine O’Brein, a passionate yoga studio owner and cooperative shareholder in Jackson Heights, Queens.
Eligible properties that commit to upgrades like O’Brien’s will enjoy significant tax reductions, covering up to 70% of renovation costs, with a generous annual discount stretching over 20 years.
However, the previous version of this tax incentive, known as the original “J-51,” faced heavy backlash before it expired in 2022. Critics highlighted how many landlords benefitted financially while hiking rents, despite the program’s intention to impose restrictions on rent increases.
Fast forward to 2023, and Governor Kathy Hochul brought this initiative back to life, requiring local approval for implementation in the Big Apple. With the City Council’s stamp of approval, the freshly revamped J-51 is officially in play!
This new iteration focuses on affordability, targeting residential buildings where at least half of the units are rented to families earning up to 80% of the area’s median income (approximately $111,840 for a family of three). It also supports affordable rental and cooperative housing initiatives, making it inclusive for moderate and middle-income families.
According to the Department of Housing Preservation and Development (HPD), around 700,000 homes across the city fall within these guidelines and will benefit from the tax break—70% of which are rental units, while the remaining 30% are co-ops and condos.
For those eager to take advantage of this windfall, HPD will soon open the application process on its official website, paving the way for landlords seeking to improve their properties.
The LL97 Appeal
Advocates champions of the resurrected J-51 program are optimistic it will tackle two critical challenges: facilitating much-needed renovations in affordable housing and enabling landlords to comply with Local Law 97 (LL97).
LL97, effective this year, mandates that properties larger than 25,000 square feet reduce carbon emissions through energy-efficient upgrades, ensuring that buildings are more sustainable and environmentally friendly. By tackling building emissions—responsible for over 70% of New York’s greenhouse gas output—this law aims to cut pollution by 40% by 2030 and a whopping 80% by 2050.
“Co-ops throughout the city have voiced that the Local Law 97 requirements are burdensome and costly,” stated City Councilmember Pierina Sanchez, the bill’s sponsor and chair of the Committee on Housing and Buildings.
This tax abatement is projected to aid over 200,000 co-op and condo families, according to the Green Co-op Council, an environmental advocacy group.
“Programs like J-51 are essential for supporting owners eager to meet their climate goals while also making housing affordable and livable for all New Yorkers,” Sanchez added passionately.
Notably, the legislation includes provisions for HPD to prioritize LL97-related projects, ensuring that they leapfrog to the front of the line for inspections and approvals.
“With the rising cost of living, many are looking at Local Law 97 and thinking, ‘We want to do this to benefit our building and the environment, but we need help to make it affordable,’” remarked Shay O’Reilly, an organizer with the Green Co-op Council.
Advocates are hopeful that this revamped J-51 program will be a world away from its predecessor, which faced serious scrutiny after revelations of significant misuse, allowing landlords to pocket benefits while imposing steep rent hikes on tenants.
As the conversation around the housing crisis continues, it’s crucial that tenants and landlords alike find a pathway that ensures fair treatment and sustainable living conditions for all New Yorkers.
In a collective effort to make this city better, the revived program promises not only to help property owners upgrade their buildings but also aligns with the city’s climate ambitions, echoing the sentiment that we can create a more sustainable future together!
For further insights and updates, stay tuned!
