The 467m program, officially named the Affordable Housing Commercial Conversion Tax Incentive (AHCC), is a tax relief initiative introduced under New York State’s budget legislation. It is designed to encourage the conversion of non-residential buildings into affordable residential units in New York City. Below is an analysis of the program, highlighting its structure, eligibility requirements, and benefits.
The 467m program aims to transform commercial or other non-residential buildings into affordable housing units by offering property tax exemptions for up to 35 years. This initiative is part of a broader strategy to address the growing demand for affordable housing in New York City. The program is applicable to buildings that begin construction between December 31, 2022, and June 30, 2031, with a deadline for project completion by December 31, 2039.
The 467m program offers several tiers of tax benefits, which are based on the project’s benefit Commencement Date and its location.
Projects located in the Manhattan Prime Development Area (“MPD”) (in Manhattan, south of 96th Street) may receive enhanced tax savings which translates to a 90% tax exemption. Projects located outside the MPD may receive a 65% tax exemption.
Projects with a Commencement Date on or before 6/30/2026 will receive a 35-year benefit. Projects with a Commencement Date between 7/1/2026 and 6/30/2028 will receive a 30-year benefit. Projects with a Commencement Date between 7/1/2028 and 6/30/2031, will receive a 25-year benefit. All projects, regardless of the Commencement Date, must complete construction by 12/31/2039.
The 467m program defines eligible non-residential buildings as structures that were predominantly used (90% or more) for commercial, manufacturing, or other non-residential purposes. This excludes hotels and certain multiple dwelling buildings. The building must have at least one floor, a roof, and a minimum of three walls that enclose the majority of the space.
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The program requires building service employees in developments with over 30 units to be paid the prevailing wage.
The 467m program is a vital component of New York State’s effort to increase affordable housing through the conversion of non-residential buildings. By offering substantial tax exemptions for up to 35 years, the program incentivizes developers to convert commercial spaces into residential units, with a strong emphasis on affordability. Developers and property owners must navigate the program’s requirements carefully to qualify for these benefits, while adhering to income limits, wage requirements, and project timelines.
This initiative aims to reshape the city’s real estate landscape by converting underused commercial buildings into desperately needed affordable housing, especially in areas like Manhattan, where demand is highest. Through these tax incentives, the 467m program seeks to make a significant impact on New York City’s housing market while addressing long-standing issues of affordability.