NYC Affordability

New York’s FY2025 state budget, enacted April 20, 2024, replaced the long-running 421-a construction tax exemption with 485-x, also called Affordable Neighborhoods for New Yorkers (ANNY). Both programs give new residential buildings a property tax exemption in exchange for setting aside a share of units as income-restricted, but 485-x requires deeper affordability and locks it in for longer: exemptions can run up to 40 years (five more than 421-a’s typical term), and income-restricted units must stay affordable permanently rather than reverting to market rate once the exemption ends. Larger projects generally must set aside 20-25% of units as permanently affordable, weighted toward 60-80% AMI, with the specific split depending on project size and location.

Why it matters for buyers

For a condo buyer, a building’s tax exemption status directly affects monthly carrying cost: an abated building’s property tax line can be a small fraction of an otherwise-comparable non-abated building’s, at least until the exemption phases out or expires. If you’re evaluating a newer condo building, ask whether it carries a 421-a or 485-x exemption, what the current tax bill actually is versus the unabated projected bill, and when the exemption ends. See income needed to buy in NYC for how the property tax line factors into the affordability math, or run a specific building’s numbers on the Condo Affordability Calculator.