421-a & Rent Stabilization Tenant Fact Sheet Provded by NYC HPD ( pdf file)

421-a & Rent Stabilization Tenant Fact Sheet from NYC HPD:

Overview

• 421-a is a New York State tax exemption program that offers property tax benefits to developers who build new residential buildings.

• In return, many of these buildings must provide rent-stabilized units, offering tenants legal protections and rent regulation.

What is 421-a?

• A tax incentive to encourage residential development.

• If your building gets 421-a, your apartment may be subject to rent stabilization.

• The law is periodically renewed and revised. Rules vary based on when your building started construction.

What is Rent Stabilization?

• Provides tenant protections:

  • Lease renewal rights

  • Regulated rent increases (per Rent Guidelines Board)

  • Succession rights for family members

• Managed by NY State Homes and Community Renewal (HCR)

How to Know If Your Apartment is Affected

• Check if your building receives 421-a benefits via the NYC Property Tax Benefit Lookup

• Your lease should include a 421-a rider if stabilized due to the program.

When 421-a Benefits Expire

1. Income-Restricted (Affordable) Units

• Construction before July 1, 2008:

  • Units remain stabilized until first vacancy after benefit expires.

• Construction July 1, 2008–Dec 31, 2015:

  • Units stay stabilized and affordable for 35 years.

• 421-a(16) units in Enhanced Affordability Areas:

  • Must remain stabilized and affordable for 40 years.

2. Market-Rate Units (No Income Limits)

• Can be deregulated after 421-a expires, only if:

  • Lease included required advance notice in 12-point type of eventual deregulation.

• 421-a(16) market-rate units may only remain stabilized if rent is under the vacancy decontrol threshold.

2.2% Surcharge During Phase-Out

• Some buildings can charge a 2.2% rent increase annually during phase-out (e.g., from 100% to 80% exemption).

• Surcharge exemptions:

  • Some affordable units

  • Units under certain regulatory agreements

  • All 421-a(16) units

If Your Lease Isn't Stabilized but Your Building Has 421-a

• Contact: HPD Compliance & Enforcement Unit
   Email: 421_customerservice@hpd.nyc.gov

• File a complaint with NY State HCR Office of Rent Administration if rent stabilization laws are violated:
  https://hcr.ny.gov/tenants

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