senate Bill S5084A

2013-2014 Legislative Session

Provides that the rental rates for housing accommodations within limited-profit housing company projects in the city of New York which are municipally aided, shall be set by the rent guidelines board; repealer

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 22, 2014 print number 5084a
amend and recommit to housing, construction and community development
Jan 08, 2014 referred to housing, construction and community development
Jun 21, 2013 committed to rules
Jun 10, 2013 advanced to third reading
Jun 05, 2013 2nd report cal.
Jun 04, 2013 1st report cal.1026
May 08, 2013 referred to housing, construction and community development

Bill Amendments

Original
A (Active)
Original
A (Active)

S5084 - Bill Details

Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Private Housing Finance Law
Laws Affected:
Amd §31, rpld sub 5, Priv Hous Fin L

S5084 - Bill Texts

view summary

Provides that the rental rates for housing accommodations within limited-profit housing company projects in the city of New York which are municipally aided, shall be set by the city rent guidelines board; provides for the payment of a rent surcharge by tenants otherwise subject to income decontrol.

view sponsor memo
BILL NUMBER:S5084 REVISED 6/4/13

TITLE OF BILL: An act to amend the private housing finance law, in
relation to rentals and selection of tenants in limited-profit housing
company projects; and to repeal subdivision 5 of section 31 of such
law relating to continued occupancy by certain tenants in such
projects

PURPOSE: This bill would help ensure that Mitchell-Lama developments
remain viable affordable housing alternatives.

SUMMARY OF PROVISIONS: This bill amends sections of Article 2 of the
Private Housing Finance Law to enable Mitchell-Lama developments to
continue to be a resource for affordable housing by allowing the
developments to broaden admissions eligibility criteria, have a
reliable annual maintenance and rental increase system, and increase
the existing surcharge requirements with such funds being placed in a
development's capital replacement reserve.

This bill will raise the income limit for all persons and families
seeking to reside in a Mitchell-Lama development to 12596 of the
income limits determined pursuant to Private Housing Finance Law
Section 31(2)(a) and (b). In municipally-aided projects in cities with
a population of one million or more, any person or family with incomes
above the income limits determined pursuant to Private Housing Finance
Law Section 31(2) shall, with the approval of the supervising agency,
pay a surcharge in accordance with a surcharge schedule to be
promulgated by such supervising agency, capped at no more than 200 of
the existing rent. The bill provides that all surcharges imposed on or
after the effective date of the amendments in such municipally-aided
projects shall be placed in the relevant housing company's capital
repair and contingency reserve unless the supervising agency approves
the application of such surcharges to the relevant housing company's
operating expenses.

This bill would also provide a rent increase procedure for
municipally-aided Mitchell-Lama projects in cities with a population
of one million or more. The rental rates would be increased annually
in an amount equal to the one year renewal lease guideline promulgated
by the New York City Rent Guidelines Board, no further procedures
would be required to effectuate rental rate increases. However, .such
projects could instead notify the supervising agency in accordance
with established procedures that they do not want an increase in their
rental rate or are making an application for a project-specific rental
rate increase. The supervising agency also has authority to determine
that a particular project needs an increase in rental rate other than
the Rent Guidelines Board rental rate increase. In such cases, the
supervising agency can vary such rental rates on no more than an
annual basis so as to secure, together with other income of such
Mitchell-Lama housing company, sufficient income to meet within
reasonable limits all necessary payments to be made or projected to be
made of all expenses including fixed charges, sinking funds, reserves
and dividends on outstanding stock as authorized by the supervising
agency. Letting, subletting or assignment of leases of apartments at
greater rental rates than those established in accordance with these
procedures shall be unlawful. This rent increase procedure would not
apply to projects that have a mortgage loan held or insured by the


federal government, are owned by the federal government, or that have
an interest reduction contract pursuant to Section 236 of the National
Housing Act.

Finally, the bill removes the statutory provisions that mandate, in
certain circumstances, the removal of occupants in all Mitchell-Lama
developments who remain above the income limits.

JUSTIFICATION: The Mitchell-Lama Program was established in 1955 to
provide affordable housing to middle income New Yorkers. There have
been expanded efforts to preserve the physical and financial health
and affordability of Mitchell-Lama developments through various
mortgage refinancing options and interest repair loans from the City
of New York Department of Housing Preservation and Development (HPD)
and the Housing Development Corporation. Approximately 35,000
Mitchell-Lama dwelling units have been preserved under the City of New
York Mayor's New Housing Market Place Plan.

Currently, the supervising agency sets base rents and increases at
Mitchell-Lama developments according to that development's budgetary
needs. Unlike in other affordable housing, a Mitchell-Lama tenant is
not required to pay 30% of his or her income towards rent, although
there is a surcharge capped at 50% of base rent assessed against
tenants earning more than the maximum allowable income. The current
Mitchell-Lama Program also allows residents with two or more
dependents who earn up to 125% of Housing and Urban Development (HUD)
Area Median Income upon lease up to reside in a Mitchell-Lama unit.

The proposed legislation would impose regular increases in rental
rates based on the same one year renewal lease guideline promulgated
by the New York City Rent Guidelines Board on municipally-aided
projects in cities with a population of one million or more, other
than those that have a mortgage loan held or insured by the federal
government, are owned by the federal government, or have an interest
reduction contract pursuant to Section 236 of the National Housing
Act. Under current law, most rent increases only occur upon an owner's
or cooperative board's request, who are often reluctant to seek such
increases. Accordingly, such rent and maintenance increase requests
are often delayed for many years, preventing a development from
meeting monthly operating expenses. Consequently, each increase tends
to be very large. By imposing regular, automatic increases that mirror
other rent guidelines board increases, this bill seeks to ensure that
occupants will experience more gradual payment increases and
Mitchell-Lama housing companies will continue to meet their expenses.
Furthermore, a development can still make a project-specific rent
increase request, where necessary, or apply to HPD to opt out of an
increase entirely if it can otherwise meet its financial needs.

The New York City Rent Guidelines Board establishes annual guidelines
for rent adjustments subject to the Rent Stabilization Law of 1969 and
to the Emergency Tenant Protection Act of 1974. In fulfilling its
function, the New York City Rent Guidelines Board must consider: (I)
the economic condition of the residential real estate industry in the
affected area, including such factors as the prevailing and projected
real estate taxes, sewer and water rates, gross operating and
maintenance costs (including insurance rates, governmental fees, cost
of fuel and labor costs), costs and availability of financing


(including effective rates of interest), and the overall supply of
housing accommodations and overall vacancy rates; (2) relevant data
from the current and projected cost of living indices for the affected
area; and (3) such other data as may be made available to it.
Mitchell-Lama developments utilize these existing analyses to ensure
that their annual increases will be sufficient to meet their operating
expenses.

Rent Guideline Board increases are applicable to Mitchell-Lama
developments because the two categories of housing are both non-luxury
multiple dwellings, which are physically similar, have the same kind
of management, and the same maintenance and utilities costs. A study
conducted by HPD comparing the average increase in rents for one-year
rent stabilized leases and Mitchell-Lama developments over a ten year
period, demonstrated rent increases in these two housing categories
were approximately the same.

The proposed legislation also restructures the surcharge provisions
for municipally-aided Mitchell-Lama developments in cities with a
population of one million or more. The maximum surcharge for both
rental and cooperative developments would be increased from 50% to
200%. This surcharge income would be dedicated to a restricted capital
replacement reserve used to fund repairs and improvements to the
development.

The proposed legislation also modifies the eligibility criteria for
initial occupancy in all Mitchell-Lama developments by allowing anyone
who earns up to 125% of HUD Area Median Income, whether they have
dependents or not, to move into a Mitchell-Lama apartment. This will
help Mitchell-Lama developments expand from lower income households to
reach the middle income range. This would also enable middle income
singles and couples to move into Mitchell-Lama housing.

Finally, the proposed legislation removes the provisions that require,
in certain circumstances, the removal of occupants in all
Mitchell-Lama developments who exceed the income limits. Allowing
occupants who exceed the income limits to remain in occupancy benefits
the Mitchell-Lama development through cross-subsidization.

Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

LEGISLATIVE HISTORY: S.7723 of 2012

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  5084

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 8, 2013
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community Development

AN  ACT to amend the private housing finance law, in relation to rentals
  and selection of tenants in limited-profit housing  company  projects;
  and  to  repeal  subdivision  5  of section 31 of such law relating to
  continued occupancy by certain tenants in such projects

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

  Section  1. Subdivision 1 of section 31 of the private housing finance
law is amended by adding a new paragraph (a-1) to read as follows:
  (A-1) NOTWITHSTANDING ANY INCONSISTENT PROVISION OF ANY OTHER GENERAL,
SPECIAL OR LOCAL LAW, WITH RESPECT TO MUNICIPALLY-AIDED  PROJECTS  IN  A
CITY  WITH A POPULATION OF ONE MILLION OR MORE, UNLESS THE COMPANY NOTI-
FIES THE SUPERVISING AGENCY IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY
RULE OF SUCH AGENCY THAT IT DOES NOT REQUIRE AN INCREASE IN  ITS  RENTAL
RATE  OR  IS  MAKING  APPLICATION FOR A PROJECT-SPECIFIC INCREASE IN ITS
RENTAL RATE, THE RENTAL RATE FOR THE DWELLINGS IN ANY SUCH PROJECT SHALL
BE INCREASED ANNUALLY ON JULY FIRST IN AN AMOUNT EQUAL TO THE  ONE  YEAR
RENEWAL  LEASE GUIDELINE PROMULGATED BY THE RENT GUIDELINES BOARD OF THE
CITY OF NEW YORK THEN IN EFFECT, AND  NO  FURTHER  PROCEDURES  SHALL  BE
REQUIRED  TO EFFECTUATE SUCH RENTAL RATE INCREASES. WITH RESPECT TO SUCH
MUNICIPALLY-AIDED PROJECTS, WHERE THE COMPANY HAS NOTIFIED THE SUPERVIS-
ING AGENCY IN ACCORDANCE WITH SUCH ESTABLISHED PROCEDURES THAT  IT  DOES
NOT REQUIRE ANY INCREASE IN ITS RENTAL RATE OR IS MAKING APPLICATION FOR
A  PROJECT-SPECIFIC  INCREASE  IN ITS RENTAL RATE, OR IF THE SUPERVISING
AGENCY DETERMINES THAT SUCH PROJECT REQUIRES AN INCREASE IN RENTAL  RATE
OTHER  THAN THE ONE YEAR RENEWAL LEASE GUIDELINE PROMULGATED BY THE RENT
GUIDELINES BOARD OF THE CITY OF NEW YORK,  THE  SUPERVISING  AGENCY  MAY
VARY  SUCH  RENTAL  RATE FOR SUCH PROJECT FROM SUCH GUIDELINE ON NO MORE
THAN AN ANNUAL BASIS PROVIDED THAT  THE  ALTERNATIVE  RENTAL  RATE  WILL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10667-03-3

S. 5084                             2

SECURE,  TOGETHER  WITH  ALL  OTHER  INCOME  OF SUCH COMPANY, SUFFICIENT
INCOME FOR IT TO MEET WITHIN REASONABLE LIMITS ALL  NECESSARY  PAYMENTS,
TO  BE  MADE  OR  PROJECTED  TO BE MADE, OF ALL EXPENSES INCLUDING FIXED
CHARGES,  SINKING  FUNDS, RESERVES AND DIVIDENDS ON OUTSTANDING STOCK AS
AUTHORIZED BY THE SUPERVISING AGENCY, AND NO FURTHER PROCEDURES SHALL BE
REQUIRED TO EFFECTUATE SUCH ALTERNATIVE RENTAL RATE. LETTING, SUBLETTING
OR ASSIGNMENT OF LEASES OF APARTMENTS  AT  GREATER  RENTALS  THAN  THOSE
ESTABLISHED PURSUANT TO THIS PARAGRAPH SHALL BE UNLAWFUL.  NOTWITHSTAND-
ING THE FOREGOING, THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO
ANY PROJECT:
  (I) THAT IS OWNED BY THE FEDERAL GOVERNMENT;
  (II)  FOR WHICH THE MORTGAGE LOAN OF THE COMPANY IS INSURED OR HELD BY
THE FEDERAL GOVERNMENT; OR
  (III) THAT HAS AN INTEREST REDUCTION CONTRACT PURSUANT TO SECTION  TWO
HUNDRED THIRTY-SIX OF THE NATIONAL HOUSING ACT (12 U.S.C. S 1715Z-1).
  S 2. Paragraph (e) of subdivision 2 of section 31 of the private hous-
ing finance law, as added by chapter 729 of the laws of 1974, is amended
to read as follows:
  (e)  Notwithstanding  the  provisions  of this subdivision, PERSONS OR
families [with two or more dependents] whose probable  aggregate  annual
income  does  not  exceed one hundred twenty-five percent of the limita-
tions as to income, as determined pursuant to paragraphs (a) and (b)  of
this  subdivision,  shall also be eligible for admission to the dwelling
or non-housekeeping accommodations without board of  a  project  on  the
understanding  that any PERSON OR family becoming eligible for admission
by reason hereof shall  pay,  from  the  time  of  admission,  a  rental
surcharge as provided for in subdivision three of this section, computed
on  the basis of the income limitations applicable to such family in the
absence of this subdivision. In applying the provisions of SUCH subdivi-
sion three to a PERSON OR family becoming eligible  by  reason  of  this
section, the maximum income prescribed by law for admission or occupancy
shall for all purposes be computed without reference to this paragraph.
  S  3.  Subdivision 3 of section 31 of the private housing finance law,
as amended by chapter 778 of the laws of 1971, is  amended  to  read  as
follows:
  3.  In  the  event  that the income of a person or family in occupancy
should increase and exceed the maximum prescribed by law  for  admission
[or  for continued occupancy, based on the latest existing rent, by more
than twenty-five per centum], such person or family shall be [subject to
removal from the dwelling, non-housekeeping, aged care accommodations or
non-housekeeping accommodations for handicapped persons provided, howev-
er, that such person or family may be] permitted to remain in  occupancy
[until  such  income  exceeds the maximum prescribed by law by more than
fifty per centum, if the company, with the approval of the  commissioner
or  the  supervising  agency,  shall  determine that removal would cause
hardship to such person or family. Any person  or  family  in  occupancy
whose  income  exceeds  the  maximum  prescribed by law] AND shall pay a
rental surcharge in accordance with  a  schedule  of  surcharges  to  be
promulgated  by the company with the approval of the commissioner or the
supervising agency, as the case may be, provided, however,  such  rental
surcharge  shall  in  no  event  exceed fifty per centum of the existing
rent. NOTWITHSTANDING THE PRECEDING SENTENCE, ANY SUCH PERSON OR  FAMILY
IN  OCCUPANCY  WHOSE INCOME EXCEEDS SUCH MAXIMUM IN A MUNICIPALITY-AIDED
PROJECT IN A CITY WITH A POPULATION OF ONE MILLION OR MORE  SHALL,  WITH
THE  APPROVAL  OF  THE  SUPERVISING  AGENCY,  PAY  A RENTAL SURCHARGE IN
ACCORDANCE WITH A SCHEDULE OF SURCHARGES TO BE PROMULGATED BY THE SUPER-

S. 5084                             3

VISING AGENCY, PROVIDED, HOWEVER, THAT SUCH RENTAL SURCHARGE SHALL IN NO
EVENT EXCEED TWO HUNDRED PER CENTUM OF THE EXISTING RENT.
  S  4.  Subdivision 4 of section 31 of the private housing finance law,
as amended by chapter 743 of the laws of 1981, is  amended  to  read  as
follows:
  4.  Twenty-five  per  cent  of rental surcharges collected pursuant to
this section on account of rentals payable prior to July first, nineteen
hundred eighty-one shall be paid by  the  company  to  the  municipality
which has granted tax exemption pursuant to section thirty-three of this
article  as  a  credit  against the grant of tax exemption, the value of
such tax exemption and of such credit to be determined on an  individual
dwelling,  non-housekeeping, aged care accommodation or non-housekeeping
accommodations for handicapped persons unit basis.  In  the  event  that
such  tax  exemption  has  not  been granted, or in the event that a sum
equal to the total of all accrued taxes as to individual dwelling,  non-
housekeeping, aged care accommodation or non-housekeeping accommodations
for  handicapped persons units where such tax exemption was granted have
been paid to the municipality, the excess if any, of surcharges and  all
surcharges  imposed  after  June  thirtieth, nineteen hundred eighty-one
shall be applied to the expenses of operation and management as approved
by the commissioner or the  supervising  agency.    NOTWITHSTANDING  ANY
INCONSISTENT PROVISION OF THIS ARTICLE, WITH RESPECT TO MUNICIPALLY-AID-
ED  PROJECTS  IN  A  CITY  WITH A POPULATION OF ONE MILLION OR MORE, ALL
SURCHARGES IMPOSED ON OR AFTER JULY FIRST, TWO THOUSAND  FOURTEEN  SHALL
BE  PLACED IN THE COMPANY'S CAPITAL REPAIR AND CONTINGENCY RESERVE FUND,
AS PROVIDED FOR BY THE RULES OF  THE  SUPERVISING  AGENCY,  UNLESS  SUCH
AGENCY  APPROVES  THE  APPLICATION  OF  SUCH SURCHARGES TO THE COMPANY'S
EXPENSES OF OPERATION AND MANAGEMENT.
  S 5. Subdivision 5 of section 31 of the private housing finance law is
REPEALED.
  S 6. This act shall take effect immediately;  provided  however  that:
(i) sections one and four of this act and the closing sentence of subdi-
vision  3  of section 31 of the private housing finance law, as added by
section three of this act, shall take effect July 1, 2014; and (ii)  any
rule  or  regulation  necessary  for  the  timely  implementation of any
provision of this act that takes effect on July 1, 2014 may  be  promul-
gated,  any procedures, forms, or instructions necessary for such imple-
mentation may be adopted and issued, and any other acts by  any  govern-
mental  agency  necessary  for  such  implementation may be taken, on or
after the date this act shall have become a law.

S5084A (ACTIVE) - Bill Details

Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Private Housing Finance Law
Laws Affected:
Amd §31, rpld sub 5, Priv Hous Fin L

S5084A (ACTIVE) - Bill Texts

view summary

Provides that the rental rates for housing accommodations within limited-profit housing company projects in the city of New York which are municipally aided, shall be set by the city rent guidelines board; provides for the payment of a rent surcharge by tenants otherwise subject to income decontrol.

view sponsor memo
BILL NUMBER:S5084A

TITLE OF BILL: An act to amend the private housing finance law, in
relation to rentals and selection of tenants in limited-profit housing
company projects; and to repeal subdivision 5 of section 31 of such
law relating to continued occupancy by certain tenants in such
projects

PURPOSE:

This bill would help ensure that Mitchell-Lama developments remain
viable affordable housing alternatives.

SUMMARY OF PROVISIONS:

This bill amends sections of Article 2 of the Private Housing Finance
Law to enable Mitchell-Lama developments to continue to be a resource
for affordable housing by allowing the developments to broaden
admissions eligibility criteria, have a reliable annual maintenance
and rental increase system, and increase the existing surcharge
requirements with such funds being placed in a development's capital
replacement reserve.

This bill will raise the income limit for all Persons and families
seeking to reside in a Mitchell-Lama development to 125% of the income
limits determined pursuant to Private Housing Finance Law Section
31(2)(a) and (b). In municipally-aided projects in cities with a
population of one million or more, any person or family with incomes
above the income limits determined pursuant to Private Housing Finance
Law Section 31(2) shall, with the approval of the supervising agency,
pay a surcharge in accordance with a surcharge schedule to be
promulgated by such supervising agency, capped at no more than 200% of
the existing rent. The bill provides that all surcharges imposed on or
after the effective date of the amendments in such municipally-aided
projects shall be placed in the relevant housing company's capital
repair and contingency reserve unless the supervising agency approves
the application of such surcharges to the relevant housing company's
operating expenses.

This bill would also provide a rent increase procedure for
municipally-aided Mitchell-Lama projects in cities with a population
of one million or more. The rental rates would be increased annually
in an amount equal to the one year renewal lease guideline promulgated
by the New York City Rent Guidelines Board, no further procedures
would be required to effectuate rental rate increases. However, such
projects could instead notify the supervising agency in accordance
with established procedures that they do not want an increase in their
rental rate or are making an application for a project-specific rental
rate increase. The supervising agency also has authority to determine
that a particular project needs an increase in rental rate other than
the Rent Guidelines Board rental rate increase. In such cases, the
supervising agency can vary such rental. rates on no more than an
annual basis so as to secure, together with other income of such
Mitchell-Lama housing company, sufficient income to meet within
reasonable limits all necessary payments to be made or projected to be
made of all expenses including fixed charges, sinking funds, reserves
and dividends on outstanding stock as authorized by the supervising


agency. Letting, subletting or assignment of leases of apartments at
greater rental rates than those established in accordance with these
procedures shall be unlawful. This rent increase procedure would not
apply to projects that have a mortgage loan held or insured by the
federal government, are owned by the federal government, or that have
an interest reduction contract pursuant to Section 236 of the National
Housing Act.

Finally, the bill removes the statutory provisions that mandate, in
certain circumstances, the removal of occupants in all Mitchell-Lama
developments who remain above the income limits.

JUSTIFICATION:

The Mitchell-Lama Program was established in 1955 to provide
affordable housing to middle income New Yorkers. There have been
expanded efforts to preserve the physical and financial health and
affordability of Mitchell-Lama developments through various mortgage
refinancing options and interest repair loans from the City of New
York Department of Housing Preservation and Development (HPD) and the
Housing Development Corporation. Approximately 35,000 Mitchell-Lana
dwelling units have been preserved under the City of New York Mayor's
New Housing Market Place Plan.

Currently, the supervising agency sets base rents and increases at
Mitchell-Lama developments according to that development's budgetary
needs. Unlike in other affordable housing, a Mitchell-Lama tenant is
not required to pay 30% of his or her income towards rent, although
there is a surcharge capped at 50% of base rent assessed against
tenants earning more than the maximum allowable income. The current
Mitchell-Lama Program also allows residents with two or more
dependents who earn up to 125% of Housing and Urban Development (HUD)
Area Median Income upon lease up to reside in a Mitchell-Lama unit.

The proposed legislation would impose regular increases in rental
rates based on the same one year renewal lease guideline promulgated
by the New York City Rent Guidelines Board on municipally-aided
projects in cities with a population of one million or more, other
than those that have a mortgage loan held or insured by the federal
government, are owned by the federal government, or have an interest
reduction contract pursuant to Section 236 of the National Housing
Act. Under current law, most rent increases only occur upon an owner's
or cooperative board's request, who are often reluctant to seek such
increases. Accordingly, such rent and maintenance increase requests
are often delayed for many years, preventing a development from
meeting monthly operating expenses. Consequently, each increase tends
to be very large. By imposing regular, automatic increases that mirror
other rent guidelines board increases, this bill seeks to ensure that
occupants will experience more gradual payment increases and
Mitchell-Lama housing companies will continue to meet their expenses.
Furthermore, a development can still make a project-specific rent
increase request, where necessary, or apply to HPD to opt out of an
increase entirely if it can otherwise meet its financial needs.

The New York City Rent Guidelines Board establishes annual guidelines
for rent adjustments subject to the Rent Stabilization Law of 1969 and
to the Emergency Tenant Protection Act of 1974. In fulfilling its


func- tion, the New York City Rent Guidelines Board must consider: (I)
the economic condition of the residential real estate industry in the
affected area, including such factors as the prevailing and projected
real estate taxes, sewer and water rates, gross operating and mainte-
nance costs (including insurance rates, governmental fees, cost of
fuel and labor costs), costs and availability of financing (including
effec- tive rates of interest), and the overall supply of housing
accommodations and overall vacancy rates; (2) relevant data from the
current and projected cost of living indices for the affected area;
and (3) such other data as may be made available to it. Mitchell-Lama
developments utilize these existing analyses to ensure that their
annual increases will be sufficient to meet their operating expenses.

Rent Guideline Board increases are applicable to Mitchell-Lama
developments because the two categories of housing are both non-luxury
multiple dwellings, which axe physically similar, have the same kind
of management, and the same maintenance and utilities costs. A study
conducted by HPD comparing the average increase in rents for one-year
rent stabilized leases and Mitchell-Lama developments over a ten year
period, demonstrated rent increases in these two housing categories
were approximately the same.

The proposed legislation also restructures the surcharge provisions
for municipally-aided Mitchell-Lama developments in cities with a
population of one million or more. The maximum surcharge for both
rental and cooperative developments would be increased from 50% to
200%. This surcharge income would be dedicated to a restricted capital
replacement reserve used to fund repairs and improvements to the
development.

The proposed legislation also modifies the eligibility criteria for
initial occupancy in all Mitchell-Lama developments by allowing anyone
who earns up to 125% of HUD Area Median Income, whether they have
dependents or not, to move into a Mitchell-Lama apartment. This will
help Mitchell-Lama developments expand from lower income households to
reach the middle income range. This would also enable middle income
singles and couples to move into Mitchell-Lama housing.

Finally, the proposed legislation removes the provisions that require,
in certain circumstances, the removal of occupants in all
Mitchell-Lama developments who exceed the income limits. Allowing
occupants who exceed the income limits to remain in occupancy benefits
the Mitchell-Lama development through cross-subsidization.
Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

LEGISLATIVE HISTORY:

2013:S.5094 Advanced to third reading
2012:S.7723 Advanced to third reading

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:


This act shall take effect immediately.

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

                                 5084--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 8, 2013
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community  Development  --  recommitted  to  the Committee on Housing,
  Construction and Community Development in accordance with Senate  Rule
  6,  sec. 8 -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the private housing finance law, in relation to  rentals
  and  selection  of tenants in limited-profit housing company projects;
  and to repeal subdivision 5 of section 31  of  such  law  relating  to
  continued occupancy by certain tenants in such projects

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

  Section 1. Subdivision 1 of section 31 of the private housing  finance
law is amended by adding a new paragraph (a-1) to read as follows:
  (A-1) NOTWITHSTANDING ANY INCONSISTENT PROVISION OF ANY OTHER GENERAL,
SPECIAL  OR  LOCAL  LAW, WITH RESPECT TO MUNICIPALLY-AIDED PROJECTS IN A
CITY WITH A POPULATION OF ONE MILLION OR MORE, UNLESS THE COMPANY  NOTI-
FIES THE SUPERVISING AGENCY IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY
RULE  OF  SUCH AGENCY THAT IT DOES NOT REQUIRE AN INCREASE IN ITS RENTAL
RATE OR IS MAKING APPLICATION FOR A  PROJECT-SPECIFIC  INCREASE  IN  ITS
RENTAL RATE, THE RENTAL RATE FOR THE DWELLINGS IN ANY SUCH PROJECT SHALL
BE  INCREASED  ANNUALLY ON JULY FIRST IN AN AMOUNT EQUAL TO THE ONE YEAR
RENEWAL LEASE GUIDELINE PROMULGATED BY THE RENT GUIDELINES BOARD OF  THE
CITY  OF  NEW  YORK  THEN  IN EFFECT, AND NO FURTHER PROCEDURES SHALL BE
REQUIRED TO EFFECTUATE SUCH RENTAL RATE INCREASES. WITH RESPECT TO  SUCH
MUNICIPALLY-AIDED PROJECTS, WHERE THE COMPANY HAS NOTIFIED THE SUPERVIS-
ING  AGENCY  IN ACCORDANCE WITH SUCH ESTABLISHED PROCEDURES THAT IT DOES
NOT REQUIRE ANY INCREASE IN ITS RENTAL RATE OR IS MAKING APPLICATION FOR
A PROJECT-SPECIFIC INCREASE IN ITS RENTAL RATE, OR  IF  THE  SUPERVISING
AGENCY  DETERMINES THAT SUCH PROJECT REQUIRES AN INCREASE IN RENTAL RATE
OTHER THAN THE ONE YEAR RENEWAL LEASE GUIDELINE PROMULGATED BY THE  RENT

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10667-04-4

S. 5084--A                          2

GUIDELINES  BOARD  OF  THE  CITY OF NEW YORK, THE SUPERVISING AGENCY MAY
VARY SUCH RENTAL RATE FOR SUCH PROJECT FROM SUCH GUIDELINE  ON  NO  MORE
THAN  AN  ANNUAL  BASIS  PROVIDED  THAT THE ALTERNATIVE RENTAL RATE WILL
SECURE,  TOGETHER  WITH  ALL  OTHER  INCOME  OF SUCH COMPANY, SUFFICIENT
INCOME FOR IT TO MEET WITHIN REASONABLE LIMITS ALL  NECESSARY  PAYMENTS,
TO  BE  MADE  OR  PROJECTED  TO BE MADE, OF ALL EXPENSES INCLUDING FIXED
CHARGES, SINKING FUNDS, RESERVES AND DIVIDENDS ON OUTSTANDING  STOCK  AS
AUTHORIZED BY THE SUPERVISING AGENCY, AND NO FURTHER PROCEDURES SHALL BE
REQUIRED TO EFFECTUATE SUCH ALTERNATIVE RENTAL RATE. LETTING, SUBLETTING
OR  ASSIGNMENT  OF  LEASES  OF  APARTMENTS AT GREATER RENTALS THAN THOSE
ESTABLISHED PURSUANT TO THIS PARAGRAPH SHALL BE UNLAWFUL.  NOTWITHSTAND-
ING THE FOREGOING, THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO
ANY PROJECT:
  (I) THAT IS OWNED BY THE FEDERAL GOVERNMENT;
  (II) FOR WHICH THE MORTGAGE LOAN OF THE COMPANY IS INSURED OR HELD  BY
THE FEDERAL GOVERNMENT; OR
  (III)  THAT HAS AN INTEREST REDUCTION CONTRACT PURSUANT TO SECTION TWO
HUNDRED THIRTY-SIX OF THE NATIONAL HOUSING ACT (12 U.S.C. S 1715Z-1).
  S 2. Paragraph (e) of subdivision 2 of section 31 of the private hous-
ing finance law, as amended by chapter 474  of  the  laws  of  2013,  is
amended to read as follows:
  (e)  Notwithstanding  the  provisions  of this subdivision, PERSONS OR
families whose probable aggregate annual  income  does  not  exceed  one
hundred  twenty-five  percent of the limitations as to income, as deter-
mined pursuant to paragraphs (a) and (b) of this subdivision, shall also
be eligible for admission to the dwelling or  non-housekeeping  accommo-
dations  without board of a project on the understanding that any PERSON
OR family becoming eligible for admission by reason  hereof  shall  pay,
from the time of admission, a rental surcharge as provided for in subdi-
vision  three of this section, computed on the basis of the income limi-
tations applicable to such family in the absence of this subdivision. In
applying the provisions of subdivision three of this section to a PERSON
OR family becoming eligible by  reason  of  this  section,  the  maximum
income  prescribed  by  law  for  admission  or  occupancy shall for all
purposes be computed without reference to this paragraph.
  S 3. Subdivision 3 of section 31 of the private housing  finance  law,
as  amended  by  chapter  778 of the laws of 1971, is amended to read as
follows:
  3. In the event that the income of a person  or  family  in  occupancy
should  increase  and exceed the maximum prescribed by law for admission
[or for continued occupancy, based on the latest existing rent, by  more
than twenty-five per centum], such person or family shall be [subject to
removal from the dwelling, non-housekeeping, aged care accommodations or
non-housekeeping accommodations for handicapped persons provided, howev-
er,  that such person or family may be] permitted to remain in occupancy
[until such income exceeds the maximum prescribed by law  by  more  than
fifty  per centum, if the company, with the approval of the commissioner
or the supervising agency, shall  determine  that  removal  would  cause
hardship  to  such  person  or family. Any person or family in occupancy
whose income exceeds the maximum prescribed by  law]  AND  shall  pay  a
rental  surcharge  in  accordance  with  a  schedule of surcharges to be
promulgated by the company with the approval of the commissioner or  the
supervising  agency,  as the case may be, provided, however, such rental
surcharge shall in no event exceed fifty  per  centum  of  the  existing
rent.  NOTWITHSTANDING THE PRECEDING SENTENCE, ANY SUCH PERSON OR FAMILY
IN OCCUPANCY WHOSE INCOME EXCEEDS SUCH MAXIMUM IN  A  MUNICIPALITY-AIDED

S. 5084--A                          3

PROJECT  IN  A CITY WITH A POPULATION OF ONE MILLION OR MORE SHALL, WITH
THE APPROVAL OF THE  SUPERVISING  AGENCY,  PAY  A  RENTAL  SURCHARGE  IN
ACCORDANCE WITH A SCHEDULE OF SURCHARGES TO BE PROMULGATED BY THE SUPER-
VISING AGENCY, PROVIDED, HOWEVER, THAT SUCH RENTAL SURCHARGE SHALL IN NO
EVENT EXCEED TWO HUNDRED PER CENTUM OF THE EXISTING RENT.
  S  4.  Subdivision 4 of section 31 of the private housing finance law,
as amended by chapter 743 of the laws of 1981, is  amended  to  read  as
follows:
  4.  Twenty-five  per  cent  of rental surcharges collected pursuant to
this section on account of rentals payable prior to July first, nineteen
hundred eighty-one shall be paid by  the  company  to  the  municipality
which has granted tax exemption pursuant to section thirty-three of this
article  as  a  credit  against the grant of tax exemption, the value of
such tax exemption and of such credit to be determined on an  individual
dwelling,  non-housekeeping, aged care accommodation or non-housekeeping
accommodations for handicapped persons unit basis.  In  the  event  that
such  tax  exemption  has  not  been granted, or in the event that a sum
equal to the total of all accrued taxes as to individual dwelling,  non-
housekeeping, aged care accommodation or non-housekeeping accommodations
for  handicapped persons units where such tax exemption was granted have
been paid to the municipality, the excess if any, of surcharges and  all
surcharges  imposed  after  June  thirtieth, nineteen hundred eighty-one
shall be applied to the expenses of operation and management as approved
by the commissioner or the  supervising  agency.    NOTWITHSTANDING  ANY
INCONSISTENT PROVISION OF THIS ARTICLE, WITH RESPECT TO MUNICIPALLY-AID-
ED  PROJECTS  IN  A  CITY  WITH A POPULATION OF ONE MILLION OR MORE, ALL
SURCHARGES IMPOSED ON OR AFTER JULY FIRST, TWO THOUSAND FIFTEEN SHALL BE
PLACED IN THE COMPANY'S CAPITAL REPAIR AND CONTINGENCY RESERVE FUND,  AS
PROVIDED  FOR BY THE RULES OF THE SUPERVISING AGENCY, UNLESS SUCH AGENCY
APPROVES THE APPLICATION OF SUCH SURCHARGES TO THE COMPANY'S EXPENSES OF
OPERATION AND MANAGEMENT.
  S 5. Subdivision 5 of section 31 of the private housing finance law is
REPEALED.
  S 6. This act shall take effect immediately;  provided  however  that:
(i) sections one and four of this act and the closing sentence of subdi-
vision  3  of section 31 of the private housing finance law, as added by
section three of this act, shall take effect July 1, 2015; and (ii)  any
rule  or  regulation  necessary  for  the  timely  implementation of any
provision of this act that takes effect on July 1, 2015 may  be  promul-
gated,  any procedures, forms, or instructions necessary for such imple-
mentation may be adopted and issued, and any other acts by  any  govern-
mental  agency  necessary  for  such  implementation may be taken, on or
after the date this act shall have become a law.

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