467-M AND CITY OF YES

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Development Site Advisors®

Introduction

New York City is at a pivotal moment in its approach to housing and urban redevelopment. As the demand for affordable housing continues to grow, the city is taking decisive action to create new opportunities for residential development while maintaining its economic vitality. The City of Yes for Housing Opportunity initiative and the 467- M tax incentive program represent two powerful tools designed to transform the city housing market.

While 467-M provides tax incentives to convert underutilized commercial properties into residential buildings, the City of Yes modernizes zoning rules to remove outdated barriers to housing production. Together, they unlock development potential, transform vacant and outdated buildings, and help address the city’s shortage of affordable housing supply.

467-M: A Key Tool for Adaptive Reuse

The 467-M program is designed to facilitate the conversion of non-residential buildings—excluding hotels—into eligible multiple dwellings, offering much-needed relief to the city’s constrained housing market. Qualified conversions will receive property tax exemptions under the Affordable

“By leveraging financial incentives and modernizing zoning policies, these initiatives lay the groundwork for citywide development.”

Housing from Commercial Conversion (AHCC) Tax Incentive Program. This program promotes adaptive reuse, expands affordable housing opportunities, and ensures long-term housing stability.

Key Features of 467-M

Expanded Eligibility:

Buildings must have a pre-conversion certificate of occupancy for non-residential use.
Hotels are excluded, while office, manufacturing, and other commercial buildings qualify.
At least 90% of the pre-conversion certificate of occupancy (CO) floor area must have been designated for non-residential use.
Buildings must be converted to include a minimum of six residential units.

Affordability Requirements:

25% of units must be set aside as affordable, with a weighted average not exceeding 80% of the Area Median Income (AMI).
5% of units must be affordable for households earning 40% AMI.
No income band may exceed 100% AMI.
Affordable units must be permanently rent- stabilized.

Incentives and Timelines:

Eligible projects receive a full property tax exemption during the construction period and a partial exemption for up to 35 years, depending on the construction start date.
The commencement date of the Eligible Multiple Dwelling must fall between December 31st, 2022, and June 30th, 2031, and with completion required by December 31st, 2039.

City of Yes: Expanding Housing Opportunity Through Zoning Reform

The City of Yes for Housing Opportunity initiative represents the most significant zoning reform in decades, with the goal of creating housing that is more accessible, equitable, and adaptable to the city’s evolving needs. It removes restrictive regulations, encourages mixed-use development, and increases flexibility for new and converted residential projects.

Expanding the List of Eligible Buildings for Conversion

Historically, zoning laws restricted conversions of non-residential buildings to those built before 1961, or 1977 in certain areas of Lower Manhattan. The City of Yes initiative modernizes this policy by:

Expanding eligibility to include buildings constructed before 1990, opening a significantly larger pool of properties for residential conversion.
Expanding conversions to all zoning districts where residential use is permitted, rather than restricting them to specific areas.
Introducing an Office Conversion Accelerator to streamline approvals and encourage quicker adaptation of outdated office space into housing.

These updates align zoning regulations with modern urban needs, making it easier and faster to repurpose vacant commercial buildings into vibrant residential communities.

Complementary Policies Supporting Housing Growth

In addition to broadening conversion opportunities, City of Yes introduces several key policies that enhance development flexibility:

Transit-Oriented Growth:

Higher density allowances near transit hubs to promote sustainable, walkable communities.
Expanded incentives for mixed-use development along commercial corridors.

Universal Affordability Preference (UAP):

Provides zoning incentives in medium- and high- density districts to increase affordable housing production.
Requires all new zoning bonus floor area to be designated as affordable.

Parking Reforms:

Removes outdated parking mandates that increase development costs and limit housing production, particularly in transit-rich neighborhoods.

These changes work in tandem with 467-M to maximize the city’s housing potential while supporting economic growth and maintaining community balance.

How 467-M and City of Yes Work Together

By modernizing regulation needs and providing financial incentives, these two initiatives create a seamless framework for housing growth and affordability throughout New York City.

Advancing Housing Affordability

Both initiatives prioritize affordability through income-restricted units and permanent rent stabilization.
City of Yes expands affordability incentives in new developments, while 467-M ensures affordability in adaptive reuse projects.

Supporting Sustainable, Mixed-Use Growth

City of Yes promotes mixed-use neighborhoods with commercial and residential spaces, creating vibrant, livable communities.
467-M incentivizes the reuse of existing structures, reducing construction waste and leveraging existing infrastructure.

Streamlining Development and Reducing Costs

467-M reduces tax burdens on conversions, making it financially viable to repurpose office and commercial buildings.
City of Yes eliminates outdated zoning restrictions and parking mandates, reducing regulatory complexity and development costs.

Conclusion

New York City’s future hinges on bold, practical solutions that align policy with housing needs. The 467-M program and the City of Yes for Housing Opportunity initiative establish a dynamic framework to unlock housing potential, foster adaptive reuse, and expand affordability. By leveraging financial incentives and modernizing zoning policies, these initiatives lay the groundwork for citywide development. As New York continues to evolve, embracing these reforms will ensure the city has innovative housing solutions, economic growth, and urban livability.

Contact Development Site Advisors® Today!

Now is the time to take advantage of these unparalleled opportunities. The combination of 467-M incentives and City of Yes zoning reforms creates the perfect environment for transforming underutilized properties into thriving residential developments. However, navigating these policies and incentives requires specialized expertise. Development Site Advisors® specializes in identifying, evaluating, and structuring development opportunities. Our team of zoning-focused architects and market experts guides you every step of the way to unlock your property’s full potential.