What happens to the income-restricted units after 30 years?
The Land Use Restriction Agreement (LURA) runs for a minimum of 30 years from the date of the certificate of occupancy. After 30 years, the LURA expires unless it is renewed, and renewal is voluntary, not mandatory. A developer or owner who reaches the 30-year mark without renewing the LURA is free to convert the previously income-restricted units to market-rate status. This conversion terminates the property tax exemption for those units. The practical implication for investors evaluating LLA projects: the 30-year LURA is not a permanent restriction on the asset. It is a time-limited obligation that expires and converts the asset to a fully market-rate multifamily building at the 30-year anniversary. This conversion event, from affordable/market-rate blend to 100% market-rate, is itself a potential value crystallization event if market rents at year 30 are substantially above the restricted rents that applied during the LURA term.