Amendment of Prevailing Wage Requirements for Building Service Workers in Buildings Receiving 421-a Tax Benefits

Proposed Rules: Closed to Comments

Comment By: 
Tuesday, January 23, 2018

Statement of Basis and Purpose

Section 421-a of the Real Property Tax Law (RPTL) provides real property tax exemptions for eligible new multiple dwellings. In New York City, HPD determines eligibility for these exemptions and is responsible for ensuring that applicants for the exemption comply with eligibility requirements, including the requirement that the applicant’s building service employees receive a prevailing wage.

Chapter 20 of the Laws of 2015, which took effect on June 15, 2015, adopted a new extended benefit available to multiple dwellings that commenced construction prior to July 1, 2008, and that had been granted either 25 or 20 years of Section 421-a benefits prior to June 15, 2015, for making at least 20% of their dwelling units affordable to persons or families of low income. This extended benefit, provided in subdivision 17 of RPTL Section 421-a, authorizes a 50% exemption from real property taxation for either an additional 10 or 15 years. Those properties that had been granted 25 years of benefit are eligible for an additional 10 years; those that had been granted 20 years of benefit are eligible for an additional 15 years. To get this additional benefit, all residential tax lots in such multiple dwellings must be operated as rentals. They also must maintain the affordability of the original affordable units at the levels originally required (typically 80% of Area Median Income (“AMI”)), as well as restricting an additional 5% of their dwelling units to be affordable to individuals or families whose household income is at or below 130% of AMI.

The extended benefit starts on the later of either the expiration date for the original Section 421- a real property tax exemption or the date on which a restrictive declaration is recorded against the property. Buildings that receive the extended benefit must pay prevailing wages to building service employees while they are receiving the extended benefit unless (a) they contain less than 30 units, or (b) all of the dwelling units are affordable housing units and at least 50%, upon initial rental and subsequent rentals following a vacancy, are affordable to and restricted to occupancy by individuals or families at or below 125% of AMI.

The fiscal officer, which, in New York City, is the Comptroller, is also the designated enforcement authority over the building service employees’ prevailing wage requirements for buildings receiving Section 421-a (17) extended benefits. HPD’s proposed amendment to chapter 50 will amend the rules to reflect the Comptroller’s enforcement authority under subdivision 17 of the 421-a Statute. HPD’s authority for these rules is found in sections 1043 and 1802 of the New York City Charter and RPTL Section 421-a.

Public Hearing


Public Hearing Date: 
Tuesday, January 23, 2018 - 11:00am

No contact

Room 9-P10
100 Gold Street
New York, NY 10038