Senate Bill S1863B

                                 BILL NUMBER:  S1863

 TITLE OF BILL :
An act to amend the private housing finance law, in relation to
limited profit housing companies in a city with a population of one
million or more


 SUMMARY OF PROVISIONS :
This bill would amend the Private Housing Finance Law by adding a new
section 35-a thereto. Section 35-a. This would provide that in cities
with a population of one million or more, rents for housing
accommodations in rental developments leaving the Mitchell-Lama
program that are governed post-dissolution by the rent stabilization
laws will be the last rent authorized for the affected dwelling unit
before the dissolution date and shall not at any time be subject to
adjustment pursuant to subdivision (a) of section 26-513 of the New
York City Administrative Code (the provision allowing the adjustment
of initial legal regulated rent under "unique and peculiar
circumstances").

 JUSTIFICATION :
Under Private Housing Finance Law § 35, Mitchell-Lama housing
companies may voluntarily dissolve (or "buyout") after 20 years. Many
housing companies are opting to buyout in order to increase the return
on their investments beyond the current Mitchell-Lama statutory
              

limits.

This bill is intended to protect tenants of Mitchell-Lama developments
in New York City that were operated as rentals before exiting the
program and that will be subject to rent stabilization laws after the
dissolution, by protecting the tenants from potentially large rent
increases as a result of Administrative Code § 26-5l3(a), which allows
increases of initial legal regulated rents when there are "unique and
peculiar circumstances" resulting in a rent that is substantially
different than the rents prevailing in substantially similar housing
accommodations in the same area. By providing that these tenants'
initial legal regulated rents on or after the dissolution date shall
be the last rents authorized for their respective dwelling units
before the dissolution date of the Mitchell-Lama development, and by
expressly prohibiting any upward adjustments under the "unique and
peculiar circumstances" provision, this bill would maintain continued
affordability for tenants residing in their units. In essence,
affected tenants' initial rents would be comparable to what they are
paying now, and the owner would be able to get the normal Rent
Guidelines Board increases on future leases. This bill would thereby
avoid the potential displacement of many tenants who might otherwise
not be able to afford their rents.

 LEGISLATIVE HISTORY :
2008 - A.352 - Passed the Assembly

 FISCAL IMPLICATIONS :
To be determined.

 EFFECTIVE DATE :
Immediately.

                                 BILL NUMBER:  S1863A

 TITLE OF BILL :
An act to amend the private housing finance law, in relation to
limited profit housing companies


 PURPOSE OR GENERAL IDEA OF BILL :
The purpose of this bill is to protect tenants in Mitchell-Lama
developments which become subject to Rent Stabilization or the
Emergency Tenant Protection Act by prohibiting an owner from applying
for a rent increase based on unique and peculiar circumstances when a
project withdraws from this program.

 SUMMARY OF SPECIFIC PROVISIONS :
This bill would add a new section 35-a to the Private Housing Finance
Law. The legislation provides that the initial legal regulated rent
after the dissolution date for a limited profit housing development
subject to the rent stabilization law of 1969 or the emergency tenant
protection act of 1974 shall be the last rent authorized for the
affected dwelling unit. The bill further states that the legal
regulated rent shall not be subject to adjustment pursuant to Section
26-513 of the New York City administrative code ("unique and peculiar"
clause).

 JUSTIFICATION :