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Ok folks, it’s time to get down and dirty in an effort to jump into the nitty gritty real property laws that every self proclaimed real estate “know it all” should be well versed in. with that said, let’s introduce Section 235 F 5 and Section 42 of the New York Property Laws as they are two very important sections that relate to affordable housing. These sections provide guidelines and regulations for developers, property owners, and tenants to follow when it comes to the creation, management, and financing of affordable housing units. In this article, we will explore these two sections in more detail and how they affect affordable housing in New York through the lens of your truly humble Brooklyn affordable housing real estate attorney.
Section 235 F 5
Section 235 F 5 is a part of the New York State Real Property Law that provides guidelines for developers who wish to create affordable housing units. According to this section, developers who construct buildings with six or more units must make 20% of the units available to low-income tenants. This is done in exchange for tax abatements and other financial incentives provided by the state and local governments. The eligibility criteria for low-income tenants are defined by the state, and developers must adhere to them when selecting tenants for the affordable units. Developers who fail to comply with the guidelines set forth in Section 235 F 5 may face penalties, including the loss of tax incentives and other financial benefits provided by the state and local governments.
Section 42
Section 42 of the Internal Revenue Code is a federal law that provides tax incentives for developers who build affordable housing units. The law allows developers to receive tax credits in exchange for making their units available to low-income tenants. The tax credits can be used to offset the developer’s federal tax liability, which can result in significant savings. To be eligible for the tax credits, developers must meet certain requirements. For example, they must set aside at least 20% of the units for low-income tenants and ensure that the units remain affordable for a certain period, usually 30 years. Additionally, the rent charged for the units must be at or below a certain limit, which is determined by the state. The tax credits provided by Section 42 can be transferred to other investors, such as banks and insurance companies, who can then use them to offset their own tax liability.
Conclusion
Section 235 F 5 and Section 42 are two important sections of the New York Property Laws that provide guidelines and regulations for the creation, management, and financing of affordable housing units. These sections are essential in ensuring that low-income tenants have access to safe and affordable housing, and they provide incentives for developers to build such housing units. As a New York lawyer, it is essential to understand the nuances of these sections and how they affect the affordable housing market. It is also important to work with developers and property owners to ensure that they are in compliance with the guidelines set forth in these sections. By doing so, we can help ensure that all New Yorkers have access to safe and affordable housing.
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