S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5817

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 20, 2009
                               ___________

Introduced  by M. of A. FITZPATRICK, McKEVITT, WALKER -- Multi-Sponsored
  by -- M. of A.  SALADINO -- read once and referred to the Committee on
  Housing

AN ACT to amend the private housing finance law, in relation to the  low
  income housing trust fund program

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 1100 of the private housing finance law, as amended
by chapter 121 of the laws of 1988, is amended to read as follows:
  S 1100. Statement of legislative findings and purpose. The legislature
hereby finds and declares that there is a  serious  shortage  of  decent
affordable housing in the state for persons of low income; that the cost
of providing such housing without public participation and assistance is
prohibitively high; that there exists throughout the state a significant
number  of  dwellings which are deteriorated and are vacant or underuti-
lized; THAT THERE EXISTS THROUGHOUT THE STATE A  SIGNIFICANT  NUMBER  OF
OCCUPIED  DWELLINGS  WHICH ARE ALSO DETERIORATED, UNSAFE OR SUBSTANDARD;
that the existence of such properties creates a serious  threat  to  the
health and safety of persons who live in or near them, limits the avail-
ability  of  decent  affordable  housing  to  others, contributes to the
blight  and  deterioration  of  neighborhoods,  and   drains   municipal
resources  and expenditures; that the rehabilitation of these properties
would stem the deterioration of neighborhoods and promote the  preserva-
tion  and  creation  of  safe  and sanitary low income housing; that the
potential exists to make such housing available to persons of low income
through projects carried out  by  eligible  applicants  to  rehabilitate
these  dwelling  accommodations, bring these accommodations into compli-
ance with all applicable laws and regulations and remove  all  hazardous
and  immediately  hazardous  code  conditions; that the purposes of this
article should also be served by providing for new construction of hous-
ing for persons of low income in areas in which rehabilitation  opportu-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04264-01-9
              

A. 5817                             2

nities  are  limited  or  where  new construction would prove to be more
effective; that the carrying out of such projects serves  a  significant
public  purpose  and  may  appropriately be performed by eligible appli-
cants;  that  payment for such services, tax exemptions and other public
participation in such projects would bring down the cost of such housing
and make it affordable to persons of low income;  and  that  it  is  the
policy  of  the state to preserve and create such housing and to provide
for the aid, care, and support of the needy.  The legislature  therefore
finds  that  a  program  should be established to provide monies for the
rehabilitation and construction of these properties by  eligible  appli-
cants to promote the preservation and creation of affordable housing for
persons of low income.
  It  is intended that any payments, grants or loans provided to munici-
palities through this program not substitute for funds which such  muni-
cipalities would have spent in the absence of this program and that such
payments,  grants  and  loans  will enable such municipalities to expand
their commitment to increase the supply of affordable low income housing
to levels greater than would have been possible without this program.
  S 2. Subdivision 12 of section 1101 of  the  private  housing  finance
law,  as  amended by chapter 121 of the laws of 1988, is amended to read
as follows:
  12. "Project"  shall  mean  a  MODERATE  REHABILITATION,  cooperative,
condominium,  homesteading  or rental project.   In cases where any such
project consists of less than the total number of  units  or  the  total
amount of floor space of a property, any reference in this article, to a
"project",  "MODERATE  REHABILITATION  PROJECT",  "cooperative project",
"condominium project", "rental project" or "homesteading project"  shall
mean that portion of such property which makes up such project.
  S  3.  Section  1101  of the private housing finance law is amended by
adding a new subdivision 14 to read as follows:
  14. "MODERATE REHABILITATION PROJECT" SHALL MEAN ANY OCCUPIED RESIDEN-
TIAL PROPERTY OR ANY PORTION THEREOF WHICH, IF VACANT OR  UNDEROCCUPIED,
WOULD  QUALIFY AS A COOPERATIVE PROJECT, CONDOMINIUM PROJECT, HOMESTEAD-
ING PROJECT OR RENTAL PROJECT.
  S 4. Subdivision 1 of section 1102 of the private housing finance law,
as amended by chapter 445 of the laws of 2004, is  amended  to  read  as
follows:
  1.  Within  the  limit  of  funds  available in the housing trust fund
account, the corporation is hereby authorized to  enter  into  contracts
with  eligible applicants for the furnishing by such applicants of hous-
ing for persons of low income. Each such  contract  shall  provide  that
eligible  applicants  rehabilitate  or construct one or more projects or
convert one  or  more  nonresidential  properties.  Such  contracts  may
provide  for payments, grants or loans by the corporation for the activ-
ities to be carried out by the eligible applicant  under  the  contract.
Such  contracts  shall  provide  that a private developer make an equity
investment of the greater of (i) two and  one-half  percent  of  project
costs  or (ii) five percent of project costs less grants which are to be
applied to such costs. The foregoing shall not preclude a private devel-
oper from making a greater equity investment. Any  payments,  grants  or
loans made by the corporation outstanding at the time of resale shall be
subject  to  repayment in whole or in part upon resale after termination
of the regulatory period and as otherwise provided therein. Such  repay-
ment  provisions  may  survive  the  end  of the regulatory period. Such
contracts may provide that eligible applicants shall either (a)  perform
activities  specified under the contract themselves or (b) act as admin-

A. 5817                             3

istrators of  a  program  under  which  projects  are  rehabilitated  or
constructed or nonresidential properties are converted by other eligible
applicants  or (c) perform both such functions. In the case of a munici-
pality  acting  as an administrator, funds provided to such municipality
hereunder shall not be deemed to be municipal funds.    The  corporation
shall  refer  any  request for payments, grants or loans from persons of
low income to eligible applicants in the  area  in  which  such  persons
reside. Loans may be in the form of participation in loans including but
not  limited to participation in loans originated or financed by lending
institutions as defined in section forty-two of this chapter, the  state
of  New  York  mortgage  agency,  the  New York city housing development
corporation, the New York state housing finance  agency  or  private  or
public  employee  pension  funds. Notwithstanding any other provision of
law, payments, grants and loans may  be  deposited  by  the  corporation
directly  with  a  lending  institution at or before the time of initial
loan closing pursuant to an escrow agreement satisfactory to the  corpo-
ration. Payments, grants and loans shall be on such terms and conditions
as  the  corporation, or the eligible applicant with the approval of the
corporation, as the case may be, shall determine. Payments,  grants  and
loans shall be used to pay for the actual and necessary cost of acquisi-
tion,  construction, rehabilitation or conversion, provided that, EXCEPT
FOR MODERATE REHABILITATION PROJECTS, not more than twenty-five  percent
of  such  payments,  grants  and  loans received for the rehabilitation,
construction or conversion of a project may be used for the cost of  the
project's  acquisition  and,  provided further, that payments, grants or
loans shall not be used for (i) the administrative costs of an  eligible
applicant  except  as  otherwise authorized by law, (ii) the cost of the
acquisition, construction, conversion or rehabilitation  of  residential
units which, subsequent to such acquisition, construction, conversion or
rehabilitation,  are to be occupied by persons other than persons of low
income, and (iii) the cost of the acquisition, construction,  conversion
or  rehabilitation  of  units  which,  subsequent  to  such acquisition,
construction, conversion or rehabilitation, are occupied or to be  occu-
pied  for  other  than residential purposes. No such payments, grants or
loans shall exceed a total of seventy-five thousand dollars per dwelling
unit provided, however, that the corporation shall have  the  discretion
to provide payments, grants and loans in excess of seventy-five thousand
dollars provided that such additional funds shall not exceed twenty-five
thousand  dollars  per dwelling unit. Among the criteria the corporation
shall consider in determining whether to provide additional  funds  are:
average  cost  of  construction in the area, location of the project and
the impact of the additional funding on the affordability of the project
for the occupants of such project. The length of any loan provided under
this article shall not exceed thirty years. No more than  fifty  percent
of  the total amount originally appropriated pursuant to this article in
any fiscal year shall be allocated to projects located within any single
municipality. Of the amount originally appropriated to  the  corporation
in  any  fiscal  year,  no  more than thirty-three and one-third percent
shall be allocated to private developers for projects within a city with
a population of one million or more. Of the amount originally  appropri-
ated  to  the  corporation in any fiscal year, no more than thirty-three
and one-third percent shall  be  allocated  to  private  developers  for
projects  in the area outside cities with a population of one million or
more.

A. 5817                             4

  S 5. Subdivision 1 of section 1102 of the private housing finance law,
as amended by section 2 of chapter 199 of the laws of 2008,  is  amended
to read as follows:
  1.  Within  the  limit  of  funds  available in the housing trust fund
account, the corporation is hereby authorized to  enter  into  contracts
with  eligible applicants for the furnishing by such applicants of hous-
ing for persons of low income. Each such  contract  shall  provide  that
eligible  applicants  rehabilitate  or construct one or more projects or
convert one  or  more  nonresidential  properties.  Such  contracts  may
provide  for payments, grants or loans by the corporation for the activ-
ities to be carried out by the eligible applicant  under  the  contract.
Such  contracts  shall  provide  that a private developer make an equity
investment of the greater of (i) two and  one-half  percent  of  project
costs  or (ii) five percent of project costs less grants which are to be
applied to such costs. The foregoing shall not preclude a private devel-
oper from making a greater equity investment. Any  payments,  grants  or
loans made by the corporation outstanding at the time of resale shall be
subject  to  repayment in whole or in part upon resale after termination
of the regulatory period and as otherwise provided therein. Such  repay-
ment  provisions  may  survive  the  end  of the regulatory period. Such
contracts may provide that eligible applicants shall either (a)  perform
activities  specified under the contract themselves or (b) act as admin-
istrators of  a  program  under  which  projects  are  rehabilitated  or
constructed or nonresidential properties are converted by other eligible
applicants  or (c) perform both such functions. In the case of a munici-
pality acting as an administrator, funds provided to  such  municipality
hereunder  shall  not  be deemed to be municipal funds.  The corporation
shall refer any request for payments, grants or loans  from  persons  of
low  income  to  eligible  applicants  in the area in which such persons
reside. Loans may be in the form of participation in loans including but
not limited to participation in loans originated or financed by  lending
institutions  as defined in section forty-two of this chapter, the state
of New York mortgage agency,  the  New  York  city  housing  development
corporation,  the  New  York  state housing finance agency or private or
public employee pension funds. Notwithstanding any  other  provision  of
law,  payments,  grants  and  loans  may be deposited by the corporation
directly with a lending institution at or before  the  time  of  initial
loan  closing pursuant to an escrow agreement satisfactory to the corpo-
ration. Payments, grants and loans shall be on such terms and conditions
as the corporation, or the eligible applicant with the approval  of  the
corporation,  as  the case may be, shall determine. Payments, grants and
loans shall be used to pay for the actual and necessary cost of acquisi-
tion, construction, rehabilitation or conversion, provided that,  EXCEPT
FOR  MODERATE  REHABILITATION  PROJECTS,  not more than fifty percent of
such  payments,  grants  and  loans  received  for  the  rehabilitation,
construction  or conversion of a project may be used for the cost of the
project's acquisition and not more than ten percent  of  such  payments,
grants  and  loans  may  be used for the rehabilitation, construction or
conversion of community service facilities and, provided  further,  that
payments,  grants  or loans shall not be used for (i) the administrative
costs of an eligible applicant except as otherwise  authorized  by  law,
(ii)  the cost of the acquisition, construction, conversion or rehabili-
tation of residential  units  which,  subsequent  to  such  acquisition,
construction,  conversion  or  rehabilitation,  are  to  be  occupied by
persons other than persons of low income, and  (iii)  the  cost  of  the
acquisition,  construction, conversion or rehabilitation of units which,

A. 5817                             5

subsequent to such acquisition, construction,  conversion  or  rehabili-
tation,  are  occupied  or  to  be  occupied  for other than residential
purposes, except for community service facilities as described above. No
such payments, grants or loans shall exceed a total of one hundred twen-
ty-five  thousand  dollars  per  dwelling  unit.  Among the criteria the
corporation shall consider in determining whether to provide  additional
funds  are:  average  cost  of construction in the area, location of the
project and the impact of the additional funding on the affordability of
the project for the occupants of such project. The length  of  any  loan
provided  under this article shall not exceed thirty years. No more than
fifty percent of the total amount originally  appropriated  pursuant  to
this  article  in any fiscal year shall be allocated to projects located
within any single municipality. Of the amount originally appropriated to
the corporation in any fiscal year, no more than thirty-three  and  one-
third  percent  shall  be  allocated  to private developers for projects
within a city with a population of one million or more.  Of  the  amount
originally  appropriated  to the corporation in any fiscal year, no more
than thirty-three and one-third percent shall be  allocated  to  private
developers  for projects in the area outside cities with a population of
one million or more.
  S 6. This act shall take effect immediately, provided that the  amend-
ments  to  subdivision  1 of section 1102 of the private housing finance
law, made by section five of this act, shall not affect  the  expiration
of  such subdivision pursuant to section 5 of chapter 199 of the laws of
2008, as amended, and shall expire therewith, where upon section four of
this act shall take effect.