by: Bria Donohue
On April 20, Governor Hochul and the New York State Legislature passed the Fiscal Year 2025 Budget. The budget adds a number of tools to the toolbox to build more housing in New York City by incentivizing affordable housing development, commercial to residential conversions, and accessory dwelling units, and by eliminating barriers caused by the 12 FAR cap and 421a construction deadline. AIA New York applauds Governor Hochul, Majority Leader Stewart-Cousins, Speaker Heastie, and members of the New York State Legislature for their diligent work in getting a comprehensive housing package passed and providing New York City with the much-needed resources to tackle the ongoing housing crisis. AIANY looks forward to continuing to work with the State to add more pathways to building affordable housing in the future. The details of the budget are as follows:
- FAR Cap: Authorizes NYC to determine FAR and exceed 12 FAR cap with approval under ULURP
- Office to Residential Conversion Tax Incentive: Tax incentive for commercial conversions in NYC tied to 25% of units affordable at 80% AMI weighted average
- 421a Extension: Extends construction deadline from 2026 to 2031 for projects that comply with affordability options A, B, D, E, or F
- 421a Replacement: Creates new 485x program to incentivize affordable housing development with affordability requirements and benefits tied to the size and type of project
- Basement Apartments: Authorizes NYC to establish a pilot program to legalize and convert inhabited basement and cellar apartments in specific community districts
- ADUs: Authorizes NYC to create a tax exemption for accessory dwelling units