FOR IMMEDIATE RELEASE

September 26, 2025

School Board Joins City in Passing Tax Exemption Encouraging Housing Creation

Exemptions Encourage the Creation of Accessory Dwelling Units and Mixed-Income Multifamily Housing

KINGSTON, NY – Mayor Steven T. Noble and the Kingston City School District Superintendent are pleased to announce that the School Board passed the 421-P and 421-P*2 Tax Exemptions at Wednesday night’s meeting.

The legislation was part of a package of property tax exemptions encouraging new housing development that the Kingston Common Council adopted in August 2024. The City of Kingston was the first municipality in New York State to opt into the new law. With the School Board’s actions, the Kingston School District is the first school district in the state to opt into these exemptions.

Mayor Noble said, “I want to thank the School Board for passing this vital housing legislation, which will spur the creation of much needed housing. We set an ambitious goal of approving units 1,000 units of housing in Kingston by 2029, and we hope this will help us achieve that goal. This two-pronged legislation supports homeowners to create additional housing on their property as well as developers to build or redevelop larger housing projects. We encourage the Ulster County legislature to work together to pass 421-P on the County level.”

Kingston City School District Superintendent Paul Padalino said, “Lack of adequate proper housing has an impact on our entire community, especially our young people. These measures help ensure more families get access to a stable home, offering students a foundation for mental and emotional security, which is essential for academic success.”

The legislation has two components: 421-P Tax Exemption for New Multifamily housing and 421-P*2 Tax Exemption for New Accessory Dwelling Units. In May 2024, Mayor Noble proposed passing these 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.

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.

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.

Director of Housing Initiatives Bartek Starodaj said, “The housing shortage affects many of the families and students served by our School District, and we know that the quality and stability of a child’s housing deeply influence their health and academic success. These exemptions not only expand our tax base but also encourage the development of much-needed new housing. I thank Superintendent Padalino and the Kingston School Board of Education for recognizing the vital role they play in supporting and incentivizing this growth.”

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.