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A10385 Summary:

BILL NOA10385
 
SAME ASSAME AS S01280
 
SPONSORRules (Burgos)
 
COSPNSR
 
MLTSPNSR
 
Add Art 11-A §§250 - 255, Pub Hous L
 
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.
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A10385 Actions:

BILL NOA10385
 
05/21/2024referred to housing
07/22/2024enacting clause stricken
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A10385 Memo:

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.
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A10385 Text:



 
                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.
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