§ 581-a. Assessment of residential real property. Notwithstanding any
other provision of law, the assessed valuation of real property used for
residential rental purposes where at least twenty percent of the
residential units are subject to an agreement with a municipality, the
state, the federal government, or an instrumentality thereof, which
agreement restricts occupancy of those units to tenants who qualify in
accordance with an income test, shall be determined using the income
approach as applied to the actual net operating income, after deducting
for reserves required by any federal, state or municipal programs. For
the purposes of this section "net operating income" shall mean the
actual or anticipated net income that remains after all operating
expenses are deducted from effective gross income, but before mortgage
debt service and book depreciation are deducted. The assessed valuation
of real property used for such residential rental purposes shall be
determined using the actual net operating income, and shall not include
federal, state or municipal income tax credits, subsidized mortgage
financing, or project grants, where such subsidies are used to offset
the project development cost in order to provide for lower initial rents
as determined by regulations promulgated by the division of housing and
community renewal.