Hochul announces highlights of FY 2024 executive budget

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New York Construction News staff writer

In a budget address this week, Gov. Kathy Hochul proposed extending the construction deadline for New York City projects grandfathered under the now-expired 421a program.

Currently, construction must be completed by June 2026 to receive the property tax break, however, in her budget address this week, Hochul proposed a four-year extension in response to pandemic-related delays to construction schedules.

A budget briefing book released on Feb. 1 says the governor is proposing tax incentives for conversion of office properties into apartments, as well as a property tax exemption that localities can adopt for multifamily housing.

Other proposals include lifting the city’s residential floor area ratio cap and allowing New York city to legalize basement apartments.

“Our agenda focuses on affordability, livability, safety, and includes groundbreaking proposals dealing with housing, mental health, childcare, public safety, and even a minimum wage increase during these difficult times,” Hochul said.

The $227 billion budget also includes proposals designed to make it easier to convert older office buildings into residential use with property-tax exemptions for landlords who agree to include affordable housing in office conversion projects.

There are also incentives to help cities and towns meet housing targets.

“They must find ways to meet targets, whether it’s developing old office parks, making changes to their zoning codes, we’ll help them. We’ll partner with them with incentives, and we’ll have a $250 million infrastructure fund because I know from my experience, that’s often the barrier. Well, who’s going to pay for the sewers, the roads, the schools?

“Because we are all in this together, we’ll help them in ways like never before, including $20 million for planning assistance funds.”

According to an earlier statement by Mayor Eric Adams, office conversions could potentially create as many as 20,000 homes in the next decade.

Legislation accompanying the budget also expands the range of buildings eligible for conversion to those built before 1991. Currently, only buildings constructed before Dec. 15, 1961, or Jan. 1, 1977 in lower Manhattan, are eligible.

“This year we have to work together to increase the housing supply, and our goal is for housing stock in communities downstate is to grow by 3 percent, upstate by 1 percent every three years,” Hochul said in her address. “It’s very manageable. Spent a lot of time in local government, it’s very doable, and we’ll work with our local partners.”

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