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“As the housing crisis drags on, New York City cannot afford to lose existing affordable housing to neglect or rely solely on costly new construction to close the gap. A reformed J-51 offers a practical, proven, and targeted solution.”
As New York’s state budget negotiations move toward the finish line, much of the public conversation has focused on big-ticket priorities that impact efforts to build new infrastructure statewide: environmental review reform and climate policy adjustments. These are important debates. But adding new supply without also addressing the challenges we’re seeing in our existing housing stock threatens to undermine any progress we make towards addressing the housing crisis. That’s why we need to talk about J-51.
For decades, the J-51 Tax Incentive Program has been one of New York City’s most effective tools for preserving the aging, rent-regulated housing stock that millions of New Yorkers depend on today. Without meaningful reinvestment, affordable homes and the stability they provide are at risk.
Across New York, many rent-stabilized buildings are showing clear signs of financial and physical strain. At the Community Preservation Corporation, a leading nonprofit housing finance company, we service a loan portfolio of approximately 580 rent stabilized loans in New York City. Across this portfolio we’ve seen total per unit expenses rise 28 percent since 2020, while during that timeframe rents have been allowed to grow only 11 percent.
When expense growth outpaces rent growth by more than double, the consequences quickly become visible. Without sufficient revenue to cover building operations, something has to give—and with investment in repairs and maintenance growing by only 1 percent from 2020-2024, we know that routine maintenance is being deferred. Small repairs are postponed. Larger system upgrades such as roofs, boilers, and electrical are delayed indefinitely. Over time, these decisions compound, leading to deteriorating housing conditions that directly affect tenants’ quality of life.
This dynamic is particularly acute in older buildings, which make up a significant share of New York City’s housing stock. More than half of all rental units were built before 1960, and a substantial portion dates back even earlier, leading to a citywide median residential building age of 90 years. These buildings require ongoing capital investment simply to remain safe and habitable, let alone to maintain compliance with new local laws and ordinances. For many owners, especially those operating smaller buildings with limited margins, rising expenses and suppressed revenue growth has almost completely blocked the financial pathway to making those investments.
The historical impact of J-51 provides a case study for successfully preserving housing. First established in 1955, J-51 played a foundational role in incentivizing landlords to rehabilitate substandard “cold-water flats”: removing bathtubs from kitchens and bringing basic plumbing, heat, and structural safety to deteriorating old-law tenements. By 1973, it had aided roughly 250,000 apartments in modernizing, aligning public policy goals with the economic realities of maintaining affordable, quality housing.
Over the following decades, the program expanded significantly, growing to cover elevators, windows, façades, and major building systems, becoming a standard financing tool for capital improvements and broader rehabilitation work. But in its later years, the program lost some of its effectiveness. Outdated cost schedules failed to keep pace with rising construction expenses, and the structure of the benefit no longer reflected market realities. Participation declined, leaving behind a significant gap.
The good news is that policymakers have an opportunity right now to correct course. The proposal to reauthorize and reform J-51 as part of the state budget would bring the program back in a more modern, effective form. By increasing the allowable tax abatement to cover up to 100 percent of approved costs and extending the program’s authorization to 10 years, the reform would provide the predictability and scale needed to support meaningful reinvestment. Just as importantly, the current proposal includes requiring regular updates to cost schedules to ensure the program remains aligned with real-world conditions, avoiding the pitfalls that undermined prior iterations.
These changes are not about recreating the past but adapting a proven model to today’s challenges. While reinstating J-51 will not solve every issue facing New York’s aging housing stock, without a dedicated tool for capital repairs, broader efforts around preservation of existing affordable housing will fall short.
As the housing crisis drags on, New York City cannot afford to lose existing affordable housing to neglect or rely solely on costly new construction to close the gap. A reformed J-51 offers a practical, proven, and targeted solution, and as budget negotiations near their conclusion, lawmakers must take action and include a modernized J-51 program before the window of opportunity closes.
Rafael E. Cestero is the CEO of The Community Preservation Corporation, and co-host of The Housing Problem podcast.