BILL NUMBER: S6200

SPONSOR: PERSAUD
 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to revise the requirements relating to the
Division of Housing and Community Renewal (DHCR)'s annual report for the
Mitchell-Lama program.

 
SUMMARY OF SPECIFIC PROVISIONS:

This bill would require the Division of Housing and Community Renewal
(DHCR) to include in its annual report relating to the Mitchell-Lama
program information regarding any limited-profit housing company that
has voluntarily dissolved in the preceding calendar year, as well as any
limited-profit housing company that has, in the current calendar year,
filed, with the commissioner and the supervising agency, a notice of its
intent to dissolve. Such information would include, but not be limited
to:

*The name and address of the development;

              

*The number of units in the development;

*A range of amounts of rent offered in the development;

*The number of tenants in the development;

*The current vacancy rate in the development;

*Income levels served by the development;

*How long the limited-profit housing company has participated in the
program; and

*Any sales or transfers that have occurred since the limited-profit
housing company was created.

This bill would also require DHCR to submit the annual report to the
State Comptroller and the Attorney General. Currently, DHCR only submits
its annual Mitchell-Lama program report to the Legislature.

 
JUSTIFICATION:

Limited-profit housing companies (LPCs) are eligible to voluntarily
dissolve and withdraw from the Mitchell-Lama program upon prepayment of
the mortgage after 20 years from initial occupancy; or after 35 years
from initial occupancy, in the case of developments aided by loans prior
to May 1, 1959. This process is often referred to as dissolution or
"buying out" of the program. When developments buy-out, they are no
longer subject to the Division of Housing and Community Renewal (DHCR)
regulations, or in the case of City-supervised developments, the New
York City Department of Housing Preservation and Development (HPD).
Units which were once affordable under the Mitchell-Lama program may
then return to market rate prices. To date, 93 Mitchell-Lama LPCs,
representing approximately 31,700 units, have voluntarily dissolved.

In order to better understand the landscape of the current Mitchell-Lama
program and the rate at which LPCs are buying out of the program, it is
essential to have relevant information collected and included in DHCR's
annual Mitchell-Lama program report. Considering the devastating effects
that buy-outs can have on tenants and communities, with the conversion
of affordable units to out-of-reach units at market rate prices, the
collection of such information would aid in potential examinations of
and modifications to the Mitchell-Lama program.

The State Comptroller and the Attorney General are involved in the over-
sight and effectiveness of the Mitchell-Lama program. For this reason,
DHCR submit its annual report relating to the program to the State Comp-
troller and the Attorney General. Under current law, DHCR is only
required to submit such report to the Legislature.

 
PRIOR LEGISLATIVE HISTORY:

2017-18 A 4775 Passed Assembly /S 625 Referred to Rules
2015-16 A 7973 Passed Assembly /S 8150 Referred to Rules

 
FISCAL IMPLICATIONS:

Small administrative cost to the State.