Senate Bill S5082

                                BILL NUMBER:S5082

TITLE OF BILL:  An act to amend chapter 514 of the laws of 1983,
amending the private housing finance law and the real property tax law
relating to the powers of the New York city housing development
corporation and the New York state housing finance agency to finance
certain multi-family housing; and to amend chapter 396 of the laws of
1984, amending the private housing finance law and the real property
tax law relating to the powers of the New York state housing finance
agency to finance certain multi-family housing, in relation to the
effectiveness of such chapters

SUMMARY OF PROVISIONS:  This proposed legislation would extend the
sunset provision of subdivision 23-c of Section 654 of Article 12 of
the Private Housing Finance Law, which authorizes the New York City
Housing Development Corporation ("HDC") to assist in the financing of
newly-constructed and rehabilitated low- and moderate-income housing.
The sunset provision currently calls for subdivision 23-c to expire on
July 23, 2015. This bill would keep subdivision 23-c in full force and
effect until July 23, 2017, thereby allowing HDC to continue to issue
notes and bonds for the financing of housing developments.

REASONS FOR SUPPORT:  Enactment of this proposal would allow HDC to
continue to assist in the financing of newly constructed and
rehabilitated low- and moderate-income housing in the City of New
York. The bill would continue HDC's authorization to enter into direct
              

loan agreements with developers of low- and moderate-income housing,
as well as joint financing programs with recognized lending
institutions. Pursuant to a joint financing program, HDC lends funds
obtained from the sale of its securities, both tax-exempt and taxable,
to financial institutions, which in turn re-lend the proceeds to
private developments for the construction or rehabilitation of low- or
moderate-income housing. In cases of conduit lending, the
responsibilities of underwriting and servicing the loans are assumed
by the lending institutions, which also bear the risks of default
under the mortgages. HDC does not rely upon the credit (or tax levy)
of either the City or the State of New York to pay bondholders.

Since its creation in 1971, HDC has financed the construction or
preservation of more than 225,000 units of affordable housing in New
York City. More than 165,000 units have been financed since 1984
pursuant to the passage of subdivision 23-c of Section 654. Overall,
HDC's portfolio includes a broad array of housing -from low-income tax
credit developments, to mixed-income developments and aging
developments originally financed in conjunction with direct federal
subsidies. The vast majority of units financed by HDC are income
restricted to be affordable to families and individuals who earn from
40% to 130% of the area median income.

Under Mayor de Blasio's "Housing New York" initiative, HDC is working
to finance a portion of the 200,000 units of affordable housing units
to be created or preserved during a 10-year period ending in 2023.
The housing units for the Mayor's plan are financed under three main
programs: (1) Extremely Low and Low-income Affordability program
("ELLA") which combines tax-exempt bonds and 4% as-of-right low-income
housing tax credits ("LIHTC") to produce housing affordable to people
earning less than 60% of area median income, (2) Mixed-Middle Income


Program or "M2", a program used to finance rental units affordable to
low- and middle-income New Yorkers, and (3) Preservation, including
its Mitchell-Lama restructuring program (described below) as well as
its program for preserving developments previously financed by either
HDC or the City of New York as well as federally assisted developments
originally financed under Sections 8, 202 and 236 of the National
Housing Act.

Since 2004, HDC has provided a voluntary Mitchell Lama restructuring
program and a rehabilitation loan program for all Mitchell Lama
projects in New York City. To date HDC has restructured over 45
Mitchell Lama projects with approximately 32,000 units preserved and
provided rehabilitation loans for several additional projects with
5,000 units. HDC is still actively working with Mitchell Lamas in New
York City and expects to provide funds to preserve even more units
over the next few years.

In 2015, HDC expects to close on financing/refinancing transactions
for over 40 projects involving the construction or preservation of
approximately 8,000 units of housing.

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