485-x, formally 'Affordable Neighborhoods for New Yorkers' (ANNY), is a New York State property-tax exemption created in 2024 to replace the expired 421-a. It grants multi-year tax breaks to new rental and homeownership projects that include affordable units, with the length of the exemption tied to project size and location.

Why is June 30, 2026 a deadline?

Projects that commence construction on or before June 30, 2026 qualify for the program's longest benefit terms — generally a 35-year exemption for large rental projects and up to 40 years for the very largest projects in designated zones. That cutoff has pushed developers to break ground before midyear.

What affordability is required?

Modest rental projects (6–99 units) must make at least 20% of units affordable; large and very large projects (100+ units) must make at least 25% affordable, at income tiers set by HPD's program rules. Homeownership projects have their own track.

Are there wage requirements?

Yes, for larger projects. Sites with at least 100 units carry a minimum construction wage of $40 an hour, rising 2.5% annually. Very large projects of 150+ units in designated Zone A face a floor of up to $72.45 an hour (Zone B up to $63), each subject to caps tied to prevailing wages.

Clock Ticks on 485-x: June 30 Deadline for Top Housing Tax Break Tier

A property-tax incentive that has become central to New York’s housing-construction math is approaching one of its most consequential deadlines. Developers who want to lock in the longest tax breaks under the state’s 485-x program must commence construction by June 30, 2026 — a cutoff driving a rush of groundbreakings across the five boroughs as the date nears.

485-x, formally the Affordable Neighborhoods for New Yorkers (ANNY) program, was created in the 2024 state budget to replace the expired 421-a, the decades-old exemption that for years was the engine behind most large rental construction in the city. Administered locally by the Department of Housing Preservation and Development (HPD), 485-x grants multi-year property-tax exemptions to new residential projects that set aside a share of units as permanently affordable.

What’s at stake at the deadline

The program tiers its benefits by project size and location, and the most generous terms flow to projects that break ground promptly. Large rental projects of 100 or more units that meet the rules receive a 35-year exemption, and very large projects of 150-plus units in designated “Zone A” and “Zone B” areas can receive up to a 40-year exemption with multiple years of construction-period benefits.

Crucially for the calendar, projects that commence construction on or before June 30, 2026 secure those top-tier terms. The program window itself runs longer — construction can begin as late as June 15, 2034, and projects must complete by June 15, 2038 — but the deepest benefits are front-loaded to spur immediate building. That structure has turned the first half of 2026 into a sprint, with developers across rezoned neighborhoods such as Gowanus pushing approved projects into the ground to qualify.

Affordability and wage rules

485-x is more demanding than the 421-a it replaced. Modest rental projects of 6 to 99 units must make at least 20% of their apartments affordable, while large and very large projects of 100 or more units must reserve at least 25%, at income bands specified in HPD’s program rules.

The program also carries construction-wage requirements that 421-a largely lacked. Sites with at least 100 units must pay a minimum construction wage of $40 an hour, increasing 2.5% annually. Very large projects of 150 or more units in Zone A face a higher floor — the lesser of $72.45 an hour (rising 2.5% a year) or 65% of the prevailing wage — while Zone B sites face a floor of up to $63 an hour. The wage rules were a hard-fought compromise between the real-estate industry and construction unions during the 2024 budget negotiations in Albany.

Why it matters for housing supply

The stakes are large because New York builds very little rental housing without a tax incentive. The city’s high property-tax burden on rental buildings makes most market-rate-plus-affordable projects infeasible to finance without an exemption, which is why the lapse of 421-a in 2022 coincided with a steep drop in new multifamily permits. Governor Kathy Hochul’s administration has projected that the 2024 housing deal — which paired 485-x with a 421-a extension for stalled projects and the 467-m office-conversion incentive — would help produce tens of thousands of new homes in the city.

Whether 485-x delivers at that scale will depend in part on how many developers beat the June 30 deadline. Each project that commences by midyear locks in decades of tax certainty; those that miss it face shorter benefit terms and tougher financing. For a city in a deep housing shortage, the next few weeks amount to a real test of how much construction the new incentive can actually pull forward.

Verification

485-x (“Affordable Neighborhoods for New Yorkers”) program, HPD administration, benefit tiers (35-year large, 40-year very large) — https://www.nyc.gov/site/hpd/services-and-information/tax-incentives-485-x.page
35-year benefits for projects started by June 30, 2026; program window through June 15, 2034 commencement and June 15, 2038 completion — https://www.citrincooperman.com/In-Focus-Resource-Center/NYC-Real-Estate-Tax-Incentives-421a-485x-and-467m-Housing-Programs
Affordability minimums (20% for 6–99 units; 25% for 100+) and wage floors ($40/hr at 100+ units; $72.45 Zone A / $63 Zone B at 150+) — https://www.rosenbergestis.com/blog/2025/02/critical-tax-incentives-for-nyc-residential-development-in-2025-and-beyond-485-x-467-m-and-421-a/
485-x replaced 421-a, created in 2024 state budget; 421-a extension and 467-m conversion incentive — https://www.crainsnewyork.com/politics-policy/nyc-starts-implementing-485-x-housing-tax-break-421-extension
Hochul administration projection of tens of thousands of new homes from the 2024 housing deal — https://www.governor.ny.gov/news/governor-hochul-announces-71000-new-homes-new-york-city-will-be-built-through-policies-enacted

Frequently Asked Questions

What is 485-x?: 485-x, formally 'Affordable Neighborhoods for New Yorkers' (ANNY), is a New York State property-tax exemption created in 2024 to replace the expired 421-a. It grants multi-year tax breaks to new rental and homeownership projects that include affordable units, with the length of the exemption tied to project size and location.
Why is June 30, 2026 a deadline?: Projects that commence construction on or before June 30, 2026 qualify for the program's longest benefit terms — generally a 35-year exemption for large rental projects and up to 40 years for the very largest projects in designated zones. That cutoff has pushed developers to break ground before midyear.
What affordability is required?: Modest rental projects (6–99 units) must make at least 20% of units affordable; large and very large projects (100+ units) must make at least 25% affordable, at income tiers set by HPD's program rules. Homeownership projects have their own track.
Are there wage requirements?: Yes, for larger projects. Sites with at least 100 units carry a minimum construction wage of $40 an hour, rising 2.5% annually. Very large projects of 150+ units in designated Zone A face a floor of up to $72.45 an hour (Zone B up to $63), each subject to caps tied to prevailing wages.