J-51 Tax Abatement Could Live On — and Help Fight Climate Change

On the eve of the expiration of the J-51 tax abatement, which has helped moderate-income co-ops and condos pay for vital capital projects, state Assembly member Edward Braunstein, a Democrat from northeast Queens, has introduced legislation that would extend the program and, critically, expand eligibility.

The bill, A-10456, was introduced Wednesday, just nine days before the legislative session ends on June 2. It would raise the maximum assessed valuation for qualifying properties from $40,000 to $45,000. (The assessed valuation is part of the formula that determines a property’s tax bill; it is a percentage of the market value. Any property with an assessed value of $45,000 would be considered solidly middle class.)

The bill’s fate in Albany is uncertain. It was filed as the New York City Council and the administration of Mayor Eric Adams work on local legislation to extend the tax abatement beyond its scheduled June expiration.

“If J-51 ceases to exist, that would be a disaster for middle-class co-ops and condos,” says Warren Schreiber, president of Bay Terrace Section 1 Co-op in Queens and co-leader of the Presidents Co-op and Condo Council, which represents more than 100,000 units of housing in the city. “Without that program,” he adds, “a lot of capital improvements wouldn’t happen.”

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The program was instituted in 1955 as an incentive to get rental landlords to improve their properties. Traditionally, it has helped co-op and condo boards and landlords upgrade facades, roofs, boilers and other structural elements, and it has also helped developers convert buildings from commercial to residential use. It did this by freezing the property tax assessment of qualifying buildings at the rate before the improvements began, resulting in a lower property tax bill.

The program has lapsed and been revived numerous times. This time around, there’s a new wrinkle. Proponents of J-51 are pushing city and state legislators to make the tax breaks available to pay for retrofits to reduce building carbon emissions enough to comply with Local Law 97, part of the city’s sweeping Climate Mobilization Act. Buildings that fail to comply will face stiff fines beginning in 2025.

“I’m one of the people who’ve been advocating that J-51 be applied to retrofits to comply with Local Law 97,” Schreiber says. “That would be a game-changer for us and for the city administration, which claims its goal is to reduce carbon emissions, not collect fines.”

Among the City Council members who are on board with the idea is Linda Lee, a Democrat from eastern Queens. "Since the City Council passed Local Law 97, many co-op and condo owners have worried about financing improvements to avoid fines associated with the law,” Lee says. “An expanded J-51 that covers more co-ops and condos — and especially Local Law 97-compliant work — would be an incredibly impactful step towards the sustainability of our city and counteracting climate change. This measure would also give a much-needed lifeline to struggling middle-class co-op and condo owners. I support the work of the Mayor and my colleagues in Albany to finally get this done.”

Lee is optimistic that action is imminent: “We hope to see this important tax credit expanded by the end of the legislative session.”

By June 2, we’ll know if her optimism was warranted.