In the closely watched Stuyvesant Town case, New York’s highest court ruled today that buildings enrolled in the J-51 tax abatement program are not subject to the rent stabilization law’s luxury decontrol provisions. Thousands of buildings throughout New York City are enrolled in the J-51 program, which grants property tax benefits in return for the performance of capital improvements to an existing multiple dwelling or the conversion of a non-residential building to a multiple dwelling.
The ruling upsets a decade-old assumption, supported by a 1996 advisory opinion issued by DHCR, the state agency charged with administering rent stabilization, that enrollment in the J-51 program does not preclude deregulation. There are myriad implications of the decision — which raises as many questions as it answers.
We will be watching this closely and hope to update you soon on the fallout from this significant decision.