Expands the powers of the New York state division of housing and community renewal and supervising agencies and modifies the obligations of certain New York state funded housing providers.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8588
SPONSOR: De Los Santos TITLE OF BILL:
An act to amend the private housing finance law, in relation to the
powers of the New York state division of housing and community renewal
and supervising agencies and the obligations of certain New York state
funded housing providers
PURPOSE OF THE BILL:
HCR provides regulatory oversight to almost 70,000 rental and cooper-
ative apartments in the Mitchell-Lama program. These properties provide
an invaluable source of affordable housing for low-, moderate-and
middle-income families and seniors across the state. However, these
Mitchell-Lama properties are becoming increasingly unaffordable to their
residents and the physical conditions of the properties are declining as
a result of increased costs (insurance, utilities, etc.) and age. This
bill would amend the Private Housing Finance Law (PHFL) to secure the
long-term health and affordability of Mitchell-Lama properties for their
residents. To incentivize owners to invest in these properties, the bill
would expand the circumstances in which DHCR is permitted to approve
redevelopment loans and allow for return on equity up to a set amount in
exchange for a longer affordability period.
SUMMARY OF PROVISIONS:
Section 1 of the bill amends Section 22-a of Article 2 of the PHFL to
allow redevelopment loans under this section by current owners, instead
of merely applying the section to new owners, and extends the afforda-
bility period from fifteen years to thirty. The section further perinits
redevelopment loans energy efficiency or greenhouse gas reduction
upgrades and allows for return on equity up to 10% over the cost of the
improvement or redevelopment.
Section 2 of the bill amends Section 82-a of Article 4 of the PHFL to
allow redevelopment loans under this section by current owners, instead
of merely applying the section to new owners, and extends the afforda-
bility period from fifteen years to thirty. The section further permits
redevelopment loans energy efficiency or greenhouse gas reduction
upgrades and allows for return on equity up to 10% over the cost of the
improvement or redevelopment.
Section 3 of the bill provides for an immediate effective date.
JUSTIFICATION:
Mitchell-Lama properties provide an invaluable source of affordable
housing for 70,000 low-, moderate-and middle-income families and seniors
across the state. However, they are becoming increasingly unaffordable
to low-income families and seniors, and their physical condition is
declining. To ensure that these properties can remain both affordable
and in good condition, we must provide incentives to owners to invest in
the properties. By expanding the circumstances in which DHCR can author-
ize redevelopment loans and allowing for return on equity up to 10% over
the cost of the improvement or redevelopment in exchange for a longer
restriction period, this legislation will provide much needed funding to
preserve more Mitchell-Lama buildings. Currently, the laW provides
incentives for new owners to invest in Mitchell-Lama properties, but it
does not afford these incentives to existing owners and the current
incentives are often insufficient to incentivize redevelopment. This
bill will encourage Mitchell-Lama owners and developers to make improve-
ments to their projects, especially with respect to improving the envi-
ronmental footprints of the projects.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS:
N/A
EFFECTIVE DATE:
This act shall take effect innnediately.
STATE OF NEW YORK
________________________________________________________________________
8588
2025-2026 Regular Sessions
IN ASSEMBLY
May 21, 2025
___________
Introduced by M. of A. DE LOS SANTOS -- (at request of the New York
State Homes and Community Renewal) -- read once and referred to the
Committee on Housing
AN ACT to amend the private housing finance law, in relation to the
powers of the New York state division of housing and community renewal
and supervising agencies and the obligations of certain New York state
funded housing providers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 22-a of the private housing finance law, as added
2 by chapter 208 of the laws of 2008, is amended to read as follows:
3 § 22-a. Redevelopment loans. Notwithstanding any provision of this
4 article to the contrary, where a state-aided project undergoes a compre-
5 hensive redevelopment plan, which may include energy efficiency upgrades
6 or technology intended to reduce greenhouse gas emissions, the commis-
7 sioner may approve a loan and encumbrance of such project in an amount
8 in excess of actual project cost within the meaning of section twenty-
9 one of this article, provided that such amount represents the cost of
10 capital improvements, redevelopment or acquisition [by a new owner], any
11 consequent rent increase is not unduly burdensome to the tenants, and
12 the company enters into an agreement to remain subject to the provisions
13 of this article for a period of no less than an additional [fifteen]
14 thirty years from issuance of the loan and encumbrance. Provided
15 further that the commissioner shall not provide for an additional return
16 on equity that exceeds more than ten percent over the cost of the capi-
17 tal improvement or redevelopment of the project.
18 § 2. Section 82-a of the private housing finance law, as added by
19 chapter 208 of the laws of 2008, is amended to read as follows:
20 § 82-a. Redevelopment loans. Notwithstanding any provision of section
21 eighty-one or eighty-two of this article to the contrary, where a hous-
22 ing company undergoes a comprehensive redevelopment plan, which may
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10189-02-5
A. 8588 2
1 include energy efficiency upgrades or technology intended to reduce
2 greenhouse gas emissions, the commissioner may approve a loan and encum-
3 brance of such project in an amount in excess of actual cost of the
4 project, provided that such amount represents the cost of capital
5 improvements, redevelopment or acquisition [by a new owner], any conse-
6 quent rent increase is not unduly burdensome to the tenants, and the
7 housing company enters into an agreement to remain subject to the
8 provisions of this article for a period of no less than [fifteen] thirty
9 years from issuance of the loan and encumbrance. Provided further that
10 the commissioner shall not provide for an additional return on equity
11 that exceeds more than ten percent over the cost of the capital improve-
12 ment or redevelopment of the project.
13 § 3. This act shall take effect immediately.
