Creates a middle income home ownership subsidy program to assist persons with an income below the current median income for the city of New York with the purchase of a residence in an urban area.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10385
SPONSOR: Rules (Burgos) TITLE OF BILL:
An act to amend the public housing law, in relation to creating a middle
income home ownership subsidy program
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to provide financial assistance to middle
income families under certain conditions as to increase home ownership
among communities of color.
SUMMARY OF PROVISIONS:
Section 1 establishes the criteria for eligibility for application to
this program and specifies what qualifies a household to receive assist-
ance. Section 1 also establishes the procedure by which this program
will assist homeowners, and how it will secure funding in order to do
this.
Section 2 defines the effective date of this act.
JUSTIFICATION:
As we continue to identify ways to increase home ownership among commu-
nities of color, especially those in the middle income threshold who we
wish to encourage their returning to and staying in urban communities,
we recognize the importance of such efforts. We have rental subsidies
and concurrently federal tax subsidies for ownership so we should estab-
lish a subsidy for middle income home ownership up to $125,000 to
increase the likelihood of ownership by persons of color in urban commu-
nities.
In a report entitled, Using Tax Policy to Subsidize Homeownership by
Richard K. Green and Andrew Reschovsky, the following is stated: "Since
the 1950s the homeownership rate in the U.S. has exceeded 60 percent. In
2004 it reached a peak of 69 percent, and in the first quarter of 2010
stood at 67.1 percent. Despite the relatively high overall rate of
homeownership in the U.S., there are large disparities among racial and
income groups (U.S. Census Bureau, 2010). The homeownership rates among
African Americans (46.1 percent) and among Hispanics (48.5 percent) are
both less than two-thirds the rate among non-Hispanic whites (74.5
percent). Despite the relative economic gains of minorities over the
past few decades and government efforts to reduce housing market
discrimination, there has been little reduction in the racial dispari-
ties in homeownership. Between 1989 and 2008, the percentage difference
in homeownership rates between black and non-Hispanic white households
remained virtually unchanged. In 2009, however, the gap grew by one
percent. Hispanic homeownership rates showed a modest two percent
increase relative to rates among non-Hispanic whites over this period
(U.S. Census Bureau, 2009)."
Moreover, it indicates the following that there is, "clear evidence that
federal income tax incentives for homeownership do in fact influence
families' housing tenure-choice decisions (Rosen, 1979a; Rosen, 1979b;
Green and Vandell, 1999). This research presupposes that homeownership
is a decision based on a set of characteristics. Such characteristics
include income, household size, marital status, race, and what econo-
mists call the user cost of owning relative to renting: the amount of
money a household must spend if it owns rather than rents an identical
house or apartment...tax policy can be used to reduce the user cost of
owning relative to renting and thus potentially influence households'
decisions to purchase a home. For homeowners the before-tax user cost is
the sum of the mortgage interest, the property tax, the net depreci-
ation, and the overall maintenance (which includes insurance and utility
costs). As demonstrated by Green and Vandell (1999), the.ability of
homeowners to deduct their mortgage interest and property tax payments
from their gross income reduces the user cost of owner-occupied housing
relative to renter-occupied housing by an amount equal to the federal
marginal tax rate times the deductible portion of to tal user cost.
Alternatively, giving taxpayers a fixed tax credit for their payment of
mortgage interest and property tax reduces the user cost of owner-occu-
pied housing relative to renter-occupied housing by the amount of the
credit". There is sufficient data backed rationale to indicate that tax
subsidy support to promote home ownership would increase the likelihood
of persons of color not just renting but owning in urban communities.
The effect of this legislation would further inspire young adults and
middle income residents to live in these communities and further lay a
foundation for positive economic development in these communities.
PRIOR LEGISLATIVE HISTORY:
New Bill in the Assembly
2021-22: Senate bill S3369 (Bailey) - referred to Housing, Construction
and Community Development Committee
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
10385
IN ASSEMBLY
May 21, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Burgos) --
read once and referred to the Committee on Housing
AN ACT to amend the public housing law, in relation to creating a middle
income home ownership subsidy program
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public housing law is amended by adding a new article
2 11-A to read as follows:
3 ARTICLE 11-A
4 MIDDLE INCOME HOME OWNERSHIP SUBSIDY
5 Section 250. Definitions.
6 251. Middle income home ownership subsidy program.
7 252. Applications.
8 253. Amount and procedure for middle income home ownership
9 subsidy payments.
10 254. Rules and regulations.
11 255. Funding for the middle income home ownership subsidy
12 program.
13 § 250. Definitions. For purposes of this article, the following terms
14 shall have the following meanings:
15 1. "Eligible unit" shall mean:
16 a. any (i) home with two or fewer units; (ii) condominium; or (iii)
17 cooperative;
18 b. where the purchase of such home, condominium, or cooperative is
19 provided for, insured, or guaranteed by the state or federal government;
20 c. located in an urban area as defined by the division.
21 2. "Qualified household" shall mean any person or his or her family
22 member who:
23 a. has an annual household income below the current median income for
24 the city of New York, provided, that any subsidy received as a result of
25 a social program shall not be considered when calculating an individ-
26 ual's gross income. The division shall determine income eligibility of
27 home buyers using the income determination methodology utilized by the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04421-01-3
A. 10385 2
1 United States department of housing and urban development in accordance
2 with their section 8 housing program.
3 b. does not currently own a housing unit, including a single family
4 house, condominium unit, cooperative unit, or rental unit that could be
5 owner occupied;
6 c. has not previously received home ownership assistance.
7 § 251. Middle income home ownership subsidy program. There is hereby
8 established a middle income home ownership subsidy program. The purpose
9 of the program is to provide financial assistance to middle income
10 households, with an annual income below the current median income for
11 the city of New York who do not currently own a home, to purchase an
12 eligible unit for purposes of rehabilitation and ownership.
13 § 252. Applications. 1. A qualified household must make an application
14 to the division to receive a home ownership subsidy.
15 2. The division shall approve an individual's application if it finds
16 that:
17 a. such individual is part of a qualified household as defined in
18 subdivision two of section two hundred fifty of this article;
19 b. the home to be purchased by the individual is an eligible unit as
20 defined in subdivision one of section two hundred fifty of this article;
21 c. the home to be purchased has been inspected by a division approved
22 home inspector;
23 d. the home to be purchased has been appraised at a value not exceed-
24 ing the maximum purchase price as set by the division.
25 3. If any qualified household that has been approved and is receiving
26 home ownership assistance payments defaults on its mortgage payment,
27 such home ownership subsidy payments shall automatically cease and be
28 terminated.
29 § 253. Amount and procedure for middle income home ownership subsidy
30 payments. Subsidy amounts under this program shall equal more than one
31 hundred twenty-five thousand dollars in the aggregate.
32 § 254. Rules and regulations. 1. The division is authorized to imple-
33 ment any rule or regulation necessary for the successful implementation
34 of this program.
35 2. The division may create any form and require any applicant to fill
36 out such form before receiving departmental approval for the home owner-
37 ship assistance payments.
38 3. The division may charge an application fee for the processing of a
39 household's home ownership assistance payment application. Such fee
40 shall not exceed one hundred dollars.
41 § 255. Funding for the middle income home ownership subsidy program.
42 Funding shall be obtained by using funds from the community development
43 block grant.
44 § 2. This act shall take effect on the one hundred eightieth day after
45 it shall have become a law. Effective immediately, the addition, amend-
46 ment and/or repeal of any rule or regulation necessary for the implemen-
47 tation of this act on its effective date are authorized to be made and
48 completed on or before such effective date.
