FOR IMMEDIATE RELEASE

August 27, 2024

Mayor Noble Signs Legislation for New Housing Choice Incentives

The City of Kingston is First in NYS to Opt Into 421-P

KINGSTON, NY – Mayor Steven T. Noble is pleased to announce that he has signed new legislation, the 421-P package of property tax exemptions, which encourages new housing development. The City of Kingston is the first municipality in New York State to opt into this new law.

The legislation has two components: 421-P*2 Tax Exemption for New Accessory Dwelling Units and 421-P Tax Exemption for New Multifamily housing. In May, Mayor Noble proposed passing 421-P*2 tax exemptions after the New York State budget allowed municipalities to partially exempt new ADUs from taxation for 10 years (100% exempt during the first five years, with the exemption percentage declining over the subsequent five years) and allowed the exemption for newly constructed or converted rental units with at least 10 units that guarantee at least 25% of the units are affordable.

Mayor Noble said, “I want to thank the Common Council for passing this new housing legislation, which I believe will spur the creation of much needed housing units in Kingston, helping us to reach our goal of approving 1,000 units of housing by 2029. We need housing on every level and across the City. This legislation allows for both homeowners to create additional housing on their property as well as developers who want to create or redevelop larger housing projects.”

The 421-P*2 Tax Exemption for New Accessory Dwelling Units allows municipalities to exempt newly constructed accessory dwelling units from taxation for a 10-year period. To qualify for tax exemption, the attached or detached ADU must be a new unit that provides independent living facilities, as defined in the City’s form-based code. ADUs cannot be used as short-term rentals. Construction must take place after the effective date of the local law.

421-P Tax Exemption for New Housing allows municipalities to exempt newly constructed or converted rentals properties with multiple dwelling units from taxation and ad valorem levies. To qualify for tax exemption, the new structure must have 10 or more rental units and have been built on vacant or underutilized land. At least 25% of the units in the structure must be affordable to households between 60-80% AMI, and none of these affordable units may have households with more than 100% AMI. Construction must take place after the effective date of the local law. Qualifying properties receive a full exemption during construction (up to 3-years) and an additional 25-year period of decreasing exemptions for the improvements made (beginning with a 96% exemption in the first year after construction, and then decreasing by 4% year thereafter). Further, at no point does an eligible project pay less in property taxes than it did prior to receiving the exemption.

Director of Housing Initiatives Bartek Starodaj said, “421-P is a no-brainer. It will help to induce new residential and mixed-used development in Kingston in support of the goal to approve 1,000 new housing units by 2029. It will encourage that development on currently vacant, underutilized, and unsafe sites. It will provide new housing options for lower-income families. And it will help us to grow our tax base over time. I thank the Common Council for their swift and unanimous approval of 421-P and look forward to discussions with the County and School District on their consideration of the measure.”

More information on 421-P can be found here (421-P for multifamily dwellings) and here (421-P*2 for ADUs).

These exemptions complement other City initiatives to encourage new housing, including the ADU Plus One Grant program, the ADU design competition, and the City’s new zoning code.

Mayor Noble established the Department of Housing Initiatives in 2020 to support housing planning in the City of Kingston. The Department manages housing-related grants, supports the construction of new market-rate and affordable housing, develops policies to protect existing residents, and addresses the connection between housing and sustainability, health, and mobility. The Department also reviews the disposition of city-owned property suitable for housing development and collaborates with local and regional housing organizations. For more of the City of Kingston’s Housing Initiatives, please visit https://kingston-ny.gov/housing.