What 485-x Is and What It Replaced

RPTL §485-x governs new residential construction that commenced after June 15, 2022. HPD finalized its implementing rules in December 2024 and began accepting applications in January 2025. Like 421-a before it, 485-x exempts new residential buildings from most of the property tax increase that new construction would otherwise trigger — but it layers on permanent affordability and, for larger projects, construction-worker wage requirements that most of 421-a never had.

Five Benefit Tracks, by Project Size

485-x isn't one program — it's five, each with its own affordability set-aside and benefit length:

  • Very Large Rental (150+ units, in designated Zone A/B areas): 25% affordable at a weighted average of ≤60% AMI. Up to 5 years construction exemption, then 40 years at 100% exemption.
  • Large Rental (100+ units, citywide): 25% affordable at ≤80% AMI weighted average. 3-year construction exemption, then 35 years at 100%.
  • Modest Rental (6–99 units, citywide): 20% affordable at ≤80% AMI weighted average. 3-year construction exemption, then 25 years at 100%, followed by 10 years at the affordability percentage (35 years total).
  • Small Rental (6–10 units, outside Manhattan, generally under 12,500 sq ft lots): no fixed AMI set-aside — 50% of units must be rent-stabilized, or the owner can elect Modest Rental terms instead. 3-year construction exemption, then 10 years at 100%.
  • Homeownership (6+ units, condo/co-op, outside Manhattan): not AMI-based — units must have an assessed value at or below roughly $89/sq ft at first post-completion assessment, with each owner occupying as a primary residence for 5+ years. 20 years at 100% exemption, with no unit cap.

Properties under 6 units don't qualify for 485-x at all. Unlike 421-a, where affordability requirements eventually sunset on many projects, affordability under 485-x is permanent across every track.

Construction Wage Requirements — the Big Change from 421-a

485-x introduced construction-worker minimum wage floors that most of 421-a never required, applying only to larger rental projects (homeownership projects are exempt):

  • 100+ units, citywide: roughly $40/hour base (2024), escalating about 2.5% annually — approaching $42/hour by mid-2026
  • 150+ units in Zone A (broadly, Manhattan south of 96th Street plus select high-cost Brooklyn/Queens areas): the lesser of roughly $72–76/hour (2024–2026) or 65% of the applicable prevailing wage
  • 150+ units in Zone B (other designated outer-borough areas): the lesser of roughly $63–66/hour (2024–2026) or 60% of prevailing wage

Owners of 100+ unit projects must notify the NYC Comptroller three months before construction begins; violations can trigger daily fines and jeopardize the tax benefit itself. This wage structure is a major reason developers have gravitated toward the sub-100-unit Modest Rental track where possible — it avoids the wage floor entirely while still capturing a full 35-year benefit.

Geographic Eligibility

The Large, Very Large, and Modest Rental tracks are available citywide, including Manhattan — a change from 421-a's old Option C, which excluded parts of Manhattan. The Small Rental and Homeownership tracks, however, specifically exclude Manhattan; a Manhattan project of that size must qualify under the Modest Rental tier instead.

Key Deadlines

Construction must commence after June 15, 2022 and on or before June 15, 2034, with a first certificate of occupancy by June 15, 2038. Owners must register with HPD as prospective applicants, and late registration triggers a filing-fee penalty. As with any deadline-driven incentive, earlier commencement generally locks in more favorable terms — confirm current requirements against HPD's rules before underwriting a project timeline.

How 485-x Connects to the Density Increases of 2024

The same April 2024 state budget that created 485-x also eliminated New York's old blanket 12.0 FAR cap on residential buildings. That change didn't grant extra density on its own — it removed a state-law ceiling so the city could raise it locally. City of Yes for Housing Opportunity, adopted by the City Council in December 2024, is what actually uses that headroom: its Universal Affordability Preference lets qualifying buildings gain up to 20% more floor area in exchange for on-site affordable housing, and affordable units built to earn that bonus can also count toward a project's 485-x affordability requirement. The two programs are legally separate — one is state tax law, the other is city zoning — but on the right site, they stack. See our guide to rezoning and density potential for the full picture.

Why This Matters If You're Selling, Not Building

You don't have to be a developer for 485-x to affect your property's value. If you own an underbuilt multifamily or mixed-use site, the price a developer can afford to pay for your land depends heavily on whether their planned project qualifies for 485-x — and at what tier. A site that supports a clean 100+ unit Large Rental project with a 35-year exemption can often support a meaningfully higher land price than one that only supports a small, unincentivized building. Understanding which track your site is likely to support is a core part of any development-site valuation. See our companion piece on multifamily vs. development site value.

Early Program Activity

HPD's first program report, covering the period through May 2025, showed 118 building registrations totaling roughly 2,600 units and about 540 affordable units — concentrated in Brooklyn, the Bronx, and Queens, with early uptake skewed toward the Modest Rental (80% AMI) tier and average building sizes under 25 units. As with any new program, activity and guidance continue to evolve; owners and developers should confirm current figures and rules directly with HPD before underwriting.