senate Bill S8675A

2017-2018 Legislative Session

Directs the department of financial services to study and make recommendations concerning lending practices to landlords acquiring property that includes small business and/or rent-regulated tenants

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Senate Committee Banks Committee


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

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Actions

view actions (3)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 12, 2018 print number 8675a
Jun 12, 2018 amend (t) and recommit to banks
May 10, 2018 referred to banks

Co-Sponsors

S8675 - Details

See Assembly Version of this Bill:
A11083
Current Committee:
Senate Banks
Law Section:
Financial Services
Versions Introduced in 2019-2020 Legislative Session:
S1476, A3275

S8675 - Summary

Directs the department of financial services to study, evaluate and make recommendations concerning lending practices by financial institutions to landlords acquiring property that includes small business and/or rent-regulated tenants; requires a report on the department's findings and recommendations for legislative action within eighteen months.

S8675 - Sponsor Memo

S8675 - Bill Text download pdf


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

                                  8675

                            I N  S E N A T E

                              May 10, 2018
                               ___________

Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT directing the department of financial services to study, evaluate
  and make recommendations concerning  lending  practices  by  financial
  institutions  to landlords acquiring property that includes rent-regu-
  lated tenants

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

  Section  1. Legislative findings and intent. The legislature finds and
declares that the practice known as "predatory equity" is furthering the
state's affordable housing crisis. Predatory equity is a model  that  is
known  to  be  exceptionally destructive of existing affordable housing,
and is commonly understood to be defined by one or both of  the  follow-
ing:  (a)  a speculative sale in which the landlord purchases naturally-
occurring affordable rental housing with the explicit or implicit under-
standing that low- and moderate-rent paying tenants will  be  encouraged
or  actively  pushed to move out of the building at a rate that does not
reflect normal tenant turnover, with the goal of the  landlord  to  take
advantage  of  the vacancies in order to use loopholes in the rent regu-
lation laws to dramatically increase the building's  rent  roll;  and/or
(b)  a  financing source used by a landlord to fund the acquisition debt
or the acquisition equity in which the financing source expects  a  rate
of  return  that  is significantly in excess of the profit that would be
generated by a building operating within the rent law's historic  norms,
and  in  which case the landlord is encouraged to resort to tactics that
aggressively undermine the building's affordability in order to meet the
demands of the financing source.
  The legislature further finds that it is necessary to  scrutinize  the
role  of the lenders involved in predatory equity, in order to determine
appropriate accountability  for  the  financial  institutions  involved.
Affordable  housing  is  critically important to the wellbeing of middle
and low-income New Yorkers as well as the state as a whole. It is incum-
bent upon the state to take remedial action to resolve the affordability
crisis and ensure that lenders are acting in the best  interest  of  the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

Co-Sponsors

S8675A (ACTIVE) - Details

See Assembly Version of this Bill:
A11083
Current Committee:
Senate Banks
Law Section:
Financial Services
Versions Introduced in 2019-2020 Legislative Session:
S1476, A3275

S8675A (ACTIVE) - Summary

Directs the department of financial services to study, evaluate and make recommendations concerning lending practices by financial institutions to landlords acquiring property that includes small business and/or rent-regulated tenants; requires a report on the department's findings and recommendations for legislative action within eighteen months.

S8675A (ACTIVE) - Sponsor Memo

S8675A (ACTIVE) - Bill Text download pdf


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

                                 8675--A

                            I N  S E N A T E

                              May 10, 2018
                               ___________

Introduced by Sens. HOYLMAN, HAMILTON, KRUEGER -- read twice and ordered
  printed, and when printed to be committed to the Committee on Banks --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee

AN ACT to direct the department of financial services to study, evaluate
  and make recommendations concerning  lending  practices  by  financial
  institutions to landlords acquiring property that includes small busi-
  ness tenants and/or rent-regulated tenants

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

  Section 1. Legislative findings and intent. The legislature finds  and
declares that the practice known as "predatory equity" is furthering the
state's  affordable  housing crisis. Predatory equity is a model that is
known to be exceptionally destructive of  existing  affordable  housing,
and  is  commonly understood to be defined by one or both of the follow-
ing: (a) a speculative sale in which the landlord  purchases  naturally-
occurring affordable rental housing with the explicit or implicit under-
standing  that  low- and moderate-rent paying tenants will be encouraged
or actively pushed to move out of the building at a rate that  does  not
reflect  normal  tenant  turnover, with the goal of the landlord to take
advantage of the vacancies in order to use loopholes in the  rent  regu-
lation  laws  to  dramatically increase the building's rent roll; and/or
(b) a financing source used by a landlord to fund the  acquisition  debt
or  the  acquisition equity in which the financing source expects a rate
of return that is significantly in excess of the profit  that  would  be
generated  by a building operating within the rent law's historic norms,
and in which case the landlord is encouraged to resort to  tactics  that
aggressively undermine the building's affordability in order to meet the
demands of the financing source.
  Increasingly,  speculative  behavior  is  also  being  linked  to  the
displacement of commercial tenants, mostly  small  businesses,  who  are
being pushed out of mixed-use residential buildings and others in stand-
alone  commercial  buildings.   The legislature further finds that it is
necessary to scrutinize the role of the lenders  involved  in  predatory

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

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