421-g Tax Incentive: Lower Manhattan’s Residential Conversion Program

The 421-g Tax Incentive was an NYC tax incentive program that offered both exemptions and abatements to building owners that converted commercial buildings to residential in downtown Manhattan.

The program applied to the area south of Murray Street, City Hall, and the Brooklyn Bridge. These neighborhoods, prior to the 421-g, were primarily filled with office buildings. The program’s goal was to increase the population outside of business hours.

421-g started in 1995 and was available until 2006.

According to the Furman Center, “the program included a 1-year construction-period exemption, a 12-year exemption from the increase in real estate taxes resulting from the work, and a 14-year abatement of about 80 percent of the real estate taxes paid on the property before conversion. All rental units become subject to rent stabilization for the duration of the tax benefits.”