Mixed-Income 421-a Affordability Disclosure Act

Drafting status. This is a complete bill draft with a sponsor’s memorandum, prepared for introduction. It carries no bill number because none has been assigned. Every statutory citation in this document was verified against a primary source on 2026-07-27; the verification appendix at §5 lists each one with its source and finding. No sponsor has agreed to carry this bill, and none is named as though they had.

PART I — SPONSOR’S MEMORANDUM IN SUPPORT

BILL NUMBER: to be assigned

TITLE OF BILL: An act to amend the general business law and the real property law, in relation to requiring disclosure of projected post-abatement carrying costs in offering plans for buildings receiving tax exemption under section 421-a of the real property tax law, and providing a right of rescission for material non-disclosure.

PURPOSE OR GENERAL IDEA OF BILL:

To require that a purchaser of a unit in a building receiving a section 421-a tax exemption be told, before contract, what the unit will cost to carry after that exemption ends.

SUMMARY OF PROVISIONS:

Section 1 sets out legislative findings.

Section 2 amends the general business law by adding a new section 352-e-1, requiring every offering plan for a 421-a building filed with the department of law to contain a Post-Abatement Carrying Cost Projection, defining the terms of that projection, requiring an Affordability Cliff Notice where a projected burden exceeds forty percent of tier-median income, and directing the attorney general to prescribe the table’s form.

Section 3 amends the real property law by adding a new section 339-ii-1, giving a purchaser a right of rescission where the required projection or notice was omitted from the plan.

Section 4 requires an annual re-disclosure to unit owners and a re-disclosure at every resale.

Section 5 sets a severability clause.

Section 6 sets effective dates.

JUSTIFICATION:

Section 421-a of the real property tax law — the Affordable New York Housing Program — delivers affordability through a time-limited tax exemption rather than through the purchase price. Verified against the statute on 2026-07-27, the section conditions the exemption on affordability requirements, including provisions requiring that not less than twenty percent of units meet specified income thresholds, and requires compliance throughout the exemption period.

What the statute does not do is require anyone to tell the buyer what happens when the exemption period ends.

When it ends, the building’s tax liability reverts to unabated treatment. Under section 581 of the real property tax law — verified 2026-07-27 — a cooperative or condominium parcel is assessed at no more than what it would be assessed if it were not held in that form, which in the city of New York means the building is valued as though it were a rental property. The unabated carrying cost that results is a knowable number on the day the unit is sold. It is projected in the building’s own tax filings. It is simply not disclosed to the person who will pay it.

New York already requires extensive pre-contract disclosure in these transactions. General business law section 352-e — verified 2026-07-27 — prohibits a public offering of cooperative or condominium interests unless an offering statement is first filed with the department of law containing detailed property, financial, and management information, and the section expressly reaches amendments at subdivisions 6(a) and 7(a). The disclosure architecture exists. This bill adds one table to it.

The omission falls hardest on the buyers the exemption was designed to help. A household that qualified for an income-restricted unit was, by definition, income-constrained at purchase. Its income does not rise on the schedule the exemption falls. The result is a household that met every affordability test at sale and is cost-burdened by operation of a tax schedule nobody explained to it.

This bill does not extend any exemption, does not set any price, and does not restrict any sale. It requires a table.

PRIOR LEGISLATIVE HISTORY:

New. No prior version has been introduced.

Related enacted measures relied on as architectural precedent: Local Law 86 of 2025 of the city of New York (Council Int. 1037 of 2024), the Rent Transparency Act, which requires posted notice in buildings containing rent-stabilized units and takes effect January 26, 2026 — verified 2026-07-27.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

Minimal. The department of law prescribes a table form and reviews it as part of existing offering-plan review under general business law section 352-e. No new appropriation, no new office, and no change to any tax rate or exemption. Costs of preparing the projection fall on the offeror as part of plan preparation.

EFFECTIVE DATE:

This act takes effect on the one hundred eightieth day after it shall have become a law, and applies to any offering plan submitted for filing on or after that date and to any amendment submitted on or after that date.

PART II — THE BILL

Drafting convention. In the enacted-text conventions of the New York Legislature, new matter is underscored and matter to be deleted appears in brackets. This draft adds only new sections, so no bracketed deletions appear. Section numbering within the general business law and real property law is proposed and would be assigned in final drafting by the Legislative Bill Drafting Commission.

                           STATE OF NEW YORK
    ____________________________________________________________________

                                                    [NUMBER TO BE ASSIGNED]

                              IN SENATE / IN ASSEMBLY

    Introduced by ____ -- read twice and ordered printed, and when printed
      to be committed to the Committee on Housing, Construction and
      Community Development


    AN ACT to amend the general business law and the real property law, in
      relation to disclosure of projected post-abatement carrying costs in
      offering plans for buildings receiving tax exemption pursuant to
      section 421-a of the real property tax law


    The People of the State of New York, represented in Senate and Assembly,
    do enact as follows:

Section 1. Legislative findings.

The Legislature finds and declares as follows:

1. Section 421-a of the real property tax law, known as the Affordable New York Housing Program, confers a time-limited exemption from real property taxation conditioned upon affordability requirements applicable during the exemption period.

2. The affordability delivered by such exemption is a function of the exemption schedule and not of the purchase price paid by a unit owner. Upon expiration of the exemption, the real property tax attributable to a unit increases to the amount that would be imposed absent the exemption.

3. Section 581 of the real property tax law provides that real property owned or leased by a cooperative corporation or on a condominium basis shall be assessed at a sum not exceeding the assessment that would be placed upon such parcel were the parcel not so owned or leased. In a city having a population of one million or more, the practical effect is that an owner-occupied unit is valued by reference to the value of the building as rental property.

4. An offering plan filed pursuant to section 352-e of the general business law is required to contain information material to a prospective purchaser’s decision. The projected carrying cost of a unit following expiration of a tax exemption is such information.

5. No provision of law presently requires that such projection be disclosed to a prospective purchaser.

6. Purchasers of units subject to affordability restrictions are, by the terms of those restrictions, income-constrained at the time of purchase, and are therefore the purchasers least able to absorb an undisclosed increase in carrying cost.

7. It is the purpose of this act to require that such projection be disclosed, and to provide a remedy where it is not.

§ 2. Amendment to the general business law.

The general business law is amended by adding a new section 352-e-1 to read as follows:

§ 352-e-1. Post-abatement carrying cost disclosure.

1. Definitions. As used in this section, “unit owner” has the meaning ascribed to it by section 339-e of the real property law, and:

  (a) “Covered building” means a building for which an exemption from real property taxation has been granted or applied for pursuant to section four hundred twenty-one-a of the real property tax law, or any successor program, and in which one or more units are offered for sale pursuant to an offering plan required to be filed under section three hundred fifty-two-e of this article.

  (b) “Exemption period” means the period during which the exemption described in paragraph (a) of this subdivision reduces the real property tax otherwise imposed, including any period of phased reduction.

  (c) “Income tier” means each category of units in a covered building distinguished by an income restriction applicable to purchasers, together with a category comprising units subject to no income restriction.

  (d) “Tier-median income” means, for each income tier, the median household income of purchasers permitted to acquire units in that tier as established by the income restriction applicable to that tier, or, where no such restriction applies, the area median income published by the United States department of housing and urban development for the applicable metropolitan area, adjusted for household size, in the year the offering plan is submitted for filing.

  (e) “Projected annual carrying cost” means, for a unit in a given year, the sum of (i) common charges or maintenance attributable to that unit, (ii) real property taxes attributable to that unit, and (iii) the annual amount of any assessment then in effect and scheduled to remain in effect in that year, each projected in accordance with regulations of the attorney general.

  (f) “Carrying cost burden” means projected annual carrying cost for a unit divided by the tier-median income for the income tier in which that unit falls, expressed as a percentage.

2. Required projection. Every offering plan for a covered building submitted for filing with the department of law, and every amendment to such a plan, shall contain, as a separately captioned and separately paginated part of the plan, a Post-Abatement Carrying Cost Projection setting forth, for a representative unit in each income tier:

  (a) the projected annual carrying cost and carrying cost burden for each year of the exemption period;

  (b) the projected annual carrying cost and carrying cost burden for each of the ten years immediately following expiration of the exemption period; and

  (c) a statement of every assumption relied upon in making the projection, including the assumed rate of change in common charges, the assumed assessment methodology, and the assumed tax rate.

3. Affordability cliff notice. Where the projection required by subdivision two of this section shows a carrying cost burden exceeding forty percent for any income tier in any of the ten years following expiration of the exemption period, the offering plan shall additionally contain, and the offeror shall separately deliver to each prospective purchaser in that tier not less than three business days before execution of a purchase agreement, a notice captioned “AFFORDABILITY CLIFF NOTICE” stating, in not less than fourteen-point type:

“THE TAX EXEMPTION ON THIS BUILDING ENDS IN [YEAR]. BASED ON THE PROJECTION IN THE OFFERING PLAN, THE ANNUAL COST OF OWNING THIS UNIT IS EXPECTED TO RISE FROM APPROXIMATELY $[AMOUNT] TO APPROXIMATELY $[AMOUNT], WHICH IS APPROXIMATELY [PERCENT] PERCENT OF THE INCOME LIMIT THAT APPLIED WHEN YOU BOUGHT. THIS IS A PROJECTION AND NOT A GUARANTEE. THE FULL PROJECTION IS IN PART [__] OF THE OFFERING PLAN.”

4. Regulations. The attorney general shall prescribe by regulation the form of the Post-Abatement Carrying Cost Projection, the methodology by which projections shall be prepared, and the manner of delivery of the affordability cliff notice. Such regulations shall be promulgated within one hundred eighty days of the effective date of this section.

5. No representation as to accuracy. Nothing in this section shall be construed to make the state, the attorney general, or the department of law a guarantor of any projection prepared under this section.

§ 3. Amendment to the real property law.

The real property law is amended by adding a new section 339-ii-1 to read as follows:

§ 339-ii-1. Rescission for failure to disclose post-abatement carrying cost.

1. A purchaser of a unit in a covered building, as that term is defined in section three hundred fifty-two-e-one of the general business law, may rescind the purchase agreement, and shall be entitled to the return of all deposits with interest, where:

  (a) the offering plan did not contain the Post-Abatement Carrying Cost Projection required by subdivision two of such section; or

  (b) the purchaser was entitled to an affordability cliff notice under subdivision three of such section and did not receive it in the manner and within the time such subdivision requires.

2. The right of rescission conferred by this section shall be exercised by written notice delivered to the offeror not later than thirty days after the purchaser first receives the omitted projection or notice, and in no event later than one year after closing.

3. The right of rescission conferred by this section may not be waived, and any provision of a purchase agreement purporting to waive it shall be void as against public policy.

4. This section shall not be construed to limit any other right or remedy available to a purchaser.

§ 4. Continuing disclosure.

Not later than one hundred twenty days after the close of each fiscal year, the board of managers of a condominium, or the board of directors of a cooperative corporation, governing a covered building shall deliver to each unit owner a statement setting forth the then-current projection required by subdivision two of section three hundred fifty-two-e-one of the general business law, updated to reflect actual common charges and actual real property taxes for the year then ended. Such statement shall be furnished to any prospective purchaser upon request.

§ 5. Severability.

If any provision of this act, or its application to any person or circumstance, is held invalid, the remainder of the act and the application of such provision to other persons or circumstances shall not be affected.

§ 6. Effective date.

This act shall take effect on the one hundred eightieth day after it shall have become a law, and shall apply to any offering plan or amendment submitted for filing on or after such date; provided, however, that section four of this act shall take effect on the first day of the first fiscal year commencing after such date. Effective immediately, the attorney general is authorized to promulgate any regulation necessary for the timely implementation of this act.

PART III — WHAT THIS DRAFT DELIBERATELY DOES NOT DO

The prior version of this proposal contained three mechanisms that have been removed. They are recorded here so the decision is visible rather than silent.

Removed: the affordability-extension reserve. The earlier draft would have required market-rate unit owners to fund a reserve covering the projected post-abatement shortfall of affordable-tier owners. It was removed for three reasons. It is a cross-subsidy between private parties imposed by statute, which invites a takings challenge that the disclosure provisions do not. It requires a rate-setting methodology nobody has modelled. And it converts a disclosure bill — which is cheap, defensible, and passable — into a redistribution bill, which is none of those things. If the reserve is wanted, it belongs in a separate bill that can fail without taking the disclosure with it.

Removed: rescission for projection inaccuracy. The earlier draft allowed rescission where actual carrying cost exceeded the projection by more than five percent. A projection made twenty years before the event it projects will deviate by more than five percent as a matter of routine, and a rescission right triggered years after closing is unworkable against a good-faith offeror who has long since departed. Rescission in this draft attaches only to non-disclosure, which is a binary fact the offeror controls.

Removed: retroactive application. The earlier draft applied the reserve requirement to buildings already in existence with a five-year phase-in. This draft is prospective in its entirety. Retroactivity was the single largest litigation exposure in the earlier version and bought little, because the buildings that most need the disclosure are the ones still being sold.

Narrowed: the burden threshold. The earlier draft set the notice trigger at fifty percent. This draft sets it at forty percent, which is the conventional threshold above which a household is described as severely cost-burdened in housing analysis. The change makes the notice trigger more, not less, protective.

PART IV — OPEN DRAFTING QUESTIONS

These are unresolved and must be settled before introduction. They are listed so a sponsor’s counsel sees them immediately rather than discovering them.

1. Section numbering. 352-e-1 and 339-ii-1 are placeholders. The Legislative Bill Drafting Commission assigns actual numbers. Real property law article 9-B runs from §339-d to §339-ll — verified 2026-07-27 — so a new section within that range requires Commission assignment.

2. Conversions. General business law § 352-eeee governs conversions to cooperative or condominium ownership in the city of New York — verified 2026-07-27 — and operates alongside § 352-e. If a covered building is created by conversion rather than new construction, whether the disclosure attaches through § 352-e alone or requires a parallel amendment to § 352-eeee is an open question for Commission review.

3. Rental 421-a. This draft reaches units offered for sale. The 421-a program also produces regulated rental units, whose tenants face an analogous loss of protection at exemption expiry. That is a different mechanism requiring a different bill; it is not addressed here and should not be described as though it were.

4. Tier-median income for unrestricted units. Paragraph 1(d) falls back to HUD area median income for market-rate tiers. Whether a carrying cost burden computed against AMI is meaningful for a market-rate purchaser is debatable. An alternative is to omit the burden calculation for unrestricted tiers and disclose only the dollar projection.

5. Interaction with existing plan amendments. § 352-e reaches amendments at subdivisions 6(a) and 7(a) — verified 2026-07-27. Whether every amendment must carry an updated projection, or only an amendment that materially alters the tax or common-charge assumptions, is a drafting choice with real compliance-cost consequences.

PART V — CITATION APPENDIX

Every external citation in this document, verified 2026-07-27 against the source shown. This appendix is the audit trail; it exists so that any reader can check the bill rather than trust it.

Claims deliberately not made

Corrections made to the prior version

PATH TO PASSAGE

Choke-point analysis: the choke-point analysis. In the 2025 session 16,794 bills were introduced and roughly 800 reached the Governor — about 4.8%. Verified 2026-07-27.

Route: standalone, Housing-led. Long horizon; build the coalition first.

The framing that survives contact. This bill does not extend, shorten, or alter any exemption. It requires that a projection already implicit in the building’s own tax filings be shown to the buyer who will pay it. Every attempt to describe it as 421-a reform invites a fight about 421-a; describing it as a disclosure bill keeps it in the disclosure lane, where New York already has extensive machinery under GBL § 352-e.

What has to happen before it moves. The prior draft’s per-building figures were removed as unverified. The bill is now argued entirely from statute — which is defensible but thin. A worked, verified example from a real building would materially strengthen it, and producing one is a research task, not a drafting one.

Related: LEGISLATIVE_MODEL.md · LEGISLATIVE_MODEL-citation-verification.md · solution S43 in 01_Database/condoscoop.db · public explainer at /421-a/