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Meet the NYC Tax Break That Could Save You From Eviction Or A Big Rent Hike

A property tax benefit known as J-51 can mean the difference between a rent freeze and a sharp increase. Here is how to find out if your building qualifies.

Thousands of landlords in New York City are being told to give tenants new, rent-regulated leases because of a tax break they received. That means their apartments will be subject to city-set rent limits, and some tenants might be able to recover past overcharges. Rent limits would apply even to apartments that lease for more than $2,700 a month – the usual cutoff for the regulation known as “rent stabilization.”

Here’s what you need to know.

Q: Why is this happening?

It’s all because of a program known as J-51, a longstanding tax benefit that New York City property owners can collect if they fix up old apartment buildings by, for example, installing a new boiler or replacing the roof. They get an annual property tax reduction or exemption that can last as long as 34 years, but in return they are supposed to give tenants rent-stabilized leases until the benefit expires.

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Due to an error by state officials, rent limits on tens of thousands of New York City apartments were improperly removed. Now, 20 years later, the state is relying on landlords to fix that problem. Read the story.

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Q: Can this affect my rent?

Possibly. In January, a tenant on the Upper West Side prevailed in a lawsuit against his landlord, who charged him $4,040 per month versus the court-ordered proper rent of $784.38 per month. With triple damages and interest, his award for rent overcharges now totals almost $1 million.

Q: OK, so how do I find out about my building?

To learn whether your building is currently receiving J-51 benefits, go to the Department of Finance’s Property Tax Benefit Information portal on the Internet. This site contains information about tax breaks. Click to search by property address, enter your borough, house number and street name, and the results should tell you about any tax benefits, including J-51. It will also give you a 10-digit identifier known as a BBL. Write it down, because you will need it to find out past benefit information.

To find out about past benefits, go to a different Department of Finance portal, the J-51 Benefit History Request Screen. Enter the 10-digit BBL – the first digit stands for the borough, the next five digits stand for the block, and the final four stand for the lot – and select the tax year of interest. The database tracks J-51 benefits back to 1972. (Tax years begin on July 1 of each year and end the following June 30th.)

Q: Why would past benefits matter?

If you moved into an apartment while your landlord was collecting the J-51 benefits, you should have been offered a rent-stabilized lease and a notice informing you when J-51 benefits will expire, according to the rules governing the benefit program. If not, you may have grounds for an overcharge complaint and may be eligible to renew your lease at city-capped rates for as long as you choose to stay, even though the tax benefits have already expired (see related story).

Q: Who’s enforcing the law?

In January, the state’s Division of Housing and Community Renewal asked owners of nearly 4,200 buildings to provide rent-stabilized leases to tenants whose apartments had been deregulated while the landlord was receiving or is currently receiving J-51 benefits. The state is only notifying landlords and leaving it up to them to inform tenants. It’s up to the tenants to file complaints when or if they learn they are entitled to stabilized rent.

Q: How can I find out which landlords were notified?

You can’t. The state is not releasing the list of owners it notified and denied our public records request for the information.

Q: What made the state act?

Since 1996, landlords have followed state guidance saying J-51 apartments could be taken out of rent regulation once rents crossed a certain threshold, now set at $2,700 per month, and certain other conditions were met.

As a result, owners deregulated tens of thousands of apartments even though they continued to collect J-51 tax benefits on their properties. The benefits for each building were supposed to be reduced proportionally, but the city’s finance and housing departments declined to say whether this actually happened.

In any case, the state guidance turned out to be wrong. In 2007, tenants at the giant Stuyvesant Town apartment complex on Manhattan sued their landlord over the issue and ultimately prevailed. So now, twenty years later, the state is trying to fix its error by instructing landlords to offer rent-stabilized leases to those tenants who were wrongly excluded from rent stabilization.

But, again, the state is relying on landlords to notify the affected tenants.

Q: Can I lodge an overcharge complaint?

Yes. The state’s Division of Housing and Community Renewal told us in a statement that tenants who believe they are being overcharged can file a complaint by calling 718–739–6400. You can also find the complaint form here. But it’s up to tenants to find out if they live in a J-51 apartment and are affected by this issue.

Q: Where can I learn more?

The state has published a FAQ about its J-51 compliance program. Michelle Maratto Itkowitz, a housing attorney, has written a plain-English guide to J-51 issues. And Lane Altschuler, the tenant who won the nearly $1 million overcharge penalty against his landlord, has published a blog about how he discovered and documented problems in his building.

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