Changes in Policy Allow Partial Sales of Mixed-Income Rental Buildings
Mixed-income rental building owners are now the subject of a large policy shift implemented by the Department of Law (DOL) of the State of New York on October 10, 2014. The goal of the change is largely that of preserving (and perhaps adding) affordable housing for NYC tenants and future homeowners.
As it currently stands, building owners who provide mixed-income rentals, are benefiting from government subsidies, such as bond financing, low-income housing tax credit and 421-a exemptions, awarded in exchange for reserving twenty percent (20%) of the units as income-restricted. These benefits protect the units for low-income tenants for a period of at least 30 years from any deregulation. However under the prior regulations of the DOL, these building owners were not allowed to sell their market-rate rental units, if they continued to operate income-restricted units. This prohibitive policy is exactly the issue that the new regulation seeks to remedy.
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