NYC Developers Face a June 15, 2026 Deadline for 421-a Projects: Here’s What Matters.

For those projects that did not file a Letter of Intent (LOI) with HPD by September 12, 2024, the deadline to complete construction and vest into the 421-a(16) Affordable Housing New York Program is June 15, 2026, now less than three months away.

Background: 421a(16) and How to Meet the Completion Deadline

The 421-a(16) program provides a property tax exemption for up to 35 years from any increases to the prior assessed valuation for qualifying multifamily residential and mixed-use developments. To be vested in the program and be eligible to receive benefits, a project must obtain a Temporary or Final Certificate of Occupancy (“TCO or CO”) that includes all residential dwelling units by June 15, 2026.

The June 15, 2026 deadline was extended by the New York State Legislature to June 15, 2031 for projects that timely submitted a Letter of Intent to HPD by September 12, 2024, and that selected Affordability Options A, B, D, E, or F.  This means that if your project is utilizing Affordability Options C or G, which permit all of the project’s affordable units to be affordable at up to 130% of AMI, it is not eligible for this extension.

If Your Project Did Not File an LOI by September 12, 2024 or Is Utilizing Affordability Options C or G

If your project did not submit a Letter of Intent to HPD by September 12, 2024 or is utilizing Affordability Options C or G, your project is not eligible for the five-year extension. This means that you must have a CO or TCO by June 15, 2026 to vest into the 421-a(16) program and qualify for benefits.

Missing this deadline means the permanent loss of eligibility for the 421-a tax exemption benefits for your development.

What You Should Be Doing Now

With June 15, 2026 approaching, we strongly encourage all clients to take the following steps immediately:

• For projects that are extending past the June 15, 2026 completion deadline, confirm that your LOI was timely filed and that you have a record of it.
• For projects that did not file the LOI, assess your construction timeline. Confirm with your construction team whether your project can obtain a TCO or CO on or before June 15, 2026.
• Contact us immediately if you are unsure or have questions regarding vesting into the 421-a(16) program. We will review the specifics of your project, coordinate with your construction and architectural firms, and provide realistic options tailored to your particular circumstances.

A Note for Clients Who Did File the LOI

If your project submitted a Letter of Intent to HPD by September 12, 2024, and your project is utilizing Affordability Options A, B, D, E, or F, your construction completion deadline has been extended to June 15, 2031. You should retain your HPD confirmation of receipt email. Please contact us if you have any questions about your extended timeline or filing obligations.

Contact Us

Time is of the essence. If you are unsure whether your project filed an LOI, which affordability option your project selected, or whether your construction timeline puts your 421-a(16) benefits at risk, please reach out to our office immediately. We are here to help you assess your specific situation and protect your project’s tax exemption eligibility.

Reach out to your BBG attorney of record or contact us here to discuss how this requirement applies to your property.

Written by: Jason Hershkowitz and Frank D. Baquero, Administrative Law Practice.