The Kingston School Board has endorsed a plan to provide tax exemptions for new accessory dwelling units and mixed-income multifamily housing. The approval occurred during the board’s meeting on September 24, 2024, marking a significant advancement in the city’s housing strategy. Although the Kingston Common Council initially approved the exemptions in August 2024, the plan still requires the endorsement of the Ulster County Legislature before implementation.
This initiative utilizes the 421-P exemption, which permits municipalities to exempt newly constructed or converted rental properties with multiple dwelling units from taxation based on property value. To qualify, new structures must consist of at least ten units and be developed on vacant or underutilized land. Importantly, a minimum of 25% of the units must be affordable for households earning between 60% and 80% of the Area Median Income (AMI), while none may house families with incomes exceeding 100% AMI.
Properties that meet these criteria will receive a full tax exemption during construction for up to three years. Following this period, there is an additional 25-year phase of decreasing tax exemptions, starting with a 96% exemption in the first post-construction year, decreasing by 4% each subsequent year. Mayor Steve Noble’s office confirmed that no property will incur lower tax payments than prior to receiving the exemption.
Additionally, state legislation provides for the 421-P*2 exemption, allowing municipalities to partially exempt new accessory dwelling units from taxation for ten years. This exemption starts at 100% in the first year and gradually reduces over the following five years. The qualifying accessory dwelling must offer independent living facilities and cannot be used for short-term rental purposes.
Noble emphasized the city’s ambitious target of approving 1,000 housing units in Kingston by 2029. He expressed optimism that this dual approach would support both homeowners in creating additional housing and developers in undertaking larger projects.
Kingston City School District Superintendent Paul Padalino highlighted the broader community benefits of this initiative, stating, “The lack of adequate, proper housing has an impact on our entire community, especially our young people. These measures help ensure more families gain access to stable homes, providing students with a foundation for mental and emotional security, which is essential for academic success.”
For further details on the 421-P exemption for multifamily projects, visit the New York State Senate website. Information about the 421-P*2 exemption for accessory dwelling units can also be found on the same site.
