S T A T E O F N E W Y O R K
________________________________________________________________________
6127
2023-2024 Regular Sessions
I N A S S E M B L Y
April 3, 2023
___________
Introduced by M. of A. HUNTER -- read once and referred to the Committee
on Housing
AN ACT to amend the real property law, in relation to prohibiting corpo-
rate entities, developers, and contractors from converting single-fa-
mily homes into a rental property unit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The real property law is amended by adding a new article 11
to read as follows:
ARTICLE 11
RENTAL OF SINGLE-FAMILY PRIVATE DWELLINGS
SECTION 360. LEGISLATIVE FINDINGS.
361. DEFINITIONS.
362. SINGLE-FAMILY PRIVATE DWELLING RENTAL RESTRICTED.
363. ENFORCEMENT.
364. RULES AND REGULATIONS.
§ 360. LEGISLATIVE FINDINGS. THE LEGISLATURE FINDS THAT IT IS IN THE
INTERESTS OF THE STATE TO ENCOURAGE AND PROTECT HOME OWNERSHIP AND THE
SINGLE-FAMILY HOME AS A BASIC HOUSING OPTION, TO ALLOW FAMILIES
INCREASED ACCESS TO HOUSING THROUGH HOMEOWNERSHIP, FOR FAMILIES TO BUILD
EQUITY AND WEALTH THROUGH THEIR HOUSING, AND TO ENHANCE AND PROMOTE THE
STABILITY AND WELL-BEING OF FAMILIES AND SOCIETY IN NEW YORK.
§ 361. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
1. "AFFORDABLE HOUSING" MEANS AT LEAST TWO-THIRDS OF AN ENTITY'S
RENTAL UNITS ARE RENTED TO AN INDIVIDUAL OR FAMILY WITH AN ANNUAL INCOME
OF UP TO FIFTY PERCENT OF THE AREA MEDIAN INCOME AS DETERMINED BY THE
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, ADJUSTED FOR
FAMILY SIZE, THAT IS PAYING NO MORE THAN THIRTY PERCENT OF ANNUAL INCOME
ON RENT.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10492-01-3
A. 6127 2
2. "COMMISSIONER" SHALL MEAN THE COMMISSIONER OF HOUSING AND COMMUNITY
RENEWAL.
3. "CORPORATE ENTITY" MEANS ANY PARTNERSHIP, CORPORATION, LIMITED
LIABILITY COMPANY, PENSION OR INVESTMENT FUND, OR TRUST BUT DOES NOT
INCLUDE A NONPROFIT CORPORATION, A FAMILY TRUST, OR A FAMILY LIMITED
LIABILITY COMPANY.
4. "FAMILY LIMITED LIABILITY COMPANY" MEANS A LIMITED LIABILITY COMPA-
NY MEETING THE FOLLOWING STANDARDS:
(A) IT HAS NO MORE THAN FIVE MEMBERS;
(B) ALL ITS MEMBERS ARE NATURAL PERSONS OR FAMILY TRUSTS;
(C) ALL OF ITS MEMBERS WHO ARE NATURAL PERSONS OR SPOUSES OF NATURAL
PERSONS ARE RELATED TO EACH OTHER WITHIN THE THIRD DEGREE OF KINDRED
ACCORDING TO THE RULES OF CIVIL LAW; AND
(D) ITS REVENUE FROM RENT OR ANY OTHER MEANS IS PAID DIRECTLY FROM ONE
MEMBER TO ANOTHER.
5."FAMILY TRUST" MEANS:
(A) A TRUST IN WHICH:
(I) A MAJORITY OF THE CURRENT BENEFICIARIES ARE PERSONS OR SPOUSES OF
PERSONS WHO ARE RELATED TO EACH OTHER WITHIN THE THIRD DEGREE OF KINDRED
ACCORDING TO THE RULES OF CIVIL LAW;
(II) ALL OF THE CURRENT BENEFICIARIES ARE NATURAL PERSONS OR NONPROFIT
CORPORATIONS OR TRUSTS DESCRIBED IN INTERNAL REVENUE CODE, SECTION
170(C), AS AMENDED; AND
(III) ONE OF THE CURRENT BENEFICIARIES OR A PERSON RELATED TO A
CURRENT BENEFICIARY WITHIN THE THIRD DEGREE OF KINDRED ACCORDING TO THE
RULES OF CIVIL LAW IS RESIDING AT THE PROPERTY SUBJECT TO THE TRUST; OR
(B) A CHARITABLE REMAINDER TRUST AS DEFINED IN INTERNAL REVENUE CODE,
SECTION 664, AS AMENDED, OR A CHARITABLE LEAD TRUST AS SET FORTH IN
INTERNAL REVENUE CODE, SECTION 170(F).
6. "NOT-FOR-PROFIT CORPORATION" MEANS A NOT-FOR-PROFIT CORPORATION
ORGANIZED UNDER STATE NOT-FOR-PROFIT CORPORATION LAW OR QUALIFIED FOR
TAX-EXEMPT STATUS UNDER FEDERAL TAX LAW THAT WAS INCORPORATED FOR THE
PURPOSE OF PROVIDING AFFORDABLE HOUSING.
7. "PENSION OR INVESTMENT FUND" MEANS A PENSION OR EMPLOYEE WELFARE
BENEFIT FUND, HOWEVER ORGANIZED; A MUTUAL FUND; A LIFE INSURANCE COMPANY
SEPARATE ACCOUNT; A COMMON TRUST OF A BANK OR OTHER TRUSTEE ESTABLISHED
FOR THE INVESTMENT AND REINVESTMENT OF MONEY CONTRIBUTED TO IT; A REAL
ESTATE INVESTMENT TRUST; OR AN INVESTMENT COMPANY AS DEFINED IN UNITED
STATES CODE, TITLE 15, SECTION 80A-3.
8. "REAL ESTATE DEVELOPER" MEANS A BUSINESS THAT IS ENGAGED IN REAL
ESTATE DEVELOPMENT OR CONSTRUCTION.
9. "RESIDENTIAL BUILDING CONTRACTOR" MEANS A PERSON IN THE BUSINESS OF
BUILDING RESIDENTIAL REAL ESTATE, OR OF CONTRACTING OR OFFERING TO
CONTRACT WITH AN OWNER TO BUILD RESIDENTIAL REAL ESTATE. A RESIDENTIAL
BUILDING CONTRACTOR MAY ALSO CONTRACT OR OFFER TO CONTRACT WITH AN OWNER
TO IMPROVE EXISTING RESIDENTIAL REAL ESTATE.
10. "SINGLE-FAMILY PRIVATE DWELLING" IS ANY BUILDING OR STRUCTURE
DESIGNED AND OCCUPIED EXCLUSIVELY FOR RESIDENCE PURPOSES BY ONE FAMILY.
§ 362. SINGLE-FAMILY PRIVATE DWELLING RENTAL RESTRICTED. 1. NO CORPO-
RATE ENTITY, REAL ESTATE DEVELOPER, OR RESIDENTIAL BUILDING CONTRACTOR
SHALL:
(A) DIRECTLY OR INDIRECTLY PURCHASE, OWN, BUILD, ACQUIRE, OR OTHERWISE
OBTAIN ANY INTEREST IN ANY SINGLE-FAMILY PRIVATE DWELLING; AND
(B) SUBSEQUENTLY CONVERT SUCH PROPERTY INTO RESIDENTIAL REAL ESTATE
CONTAINING ONE RENTAL UNIT.
A. 6127 3
2. A CORPORATE ENTITY, REAL ESTATE DEVELOPER, OR RESIDENTIAL BUILDING
CONTRACTOR MAY PETITION THE COMMISSIONER FOR AN EXEMPTION FROM SUBDIVI-
SION ONE OF THIS SECTION. THE COMMISSIONER SHALL ISSUE AN EXEMPTION IF
THE ENTITY MEETS THE FOLLOWING CRITERIA:
(A) THE EXEMPTION WOULD NOT CONTRADICT THE PURPOSE OF THIS SECTION;
AND
(B) THE PETITIONING ENTITY WOULD NOT HAVE AN IMPACT UPON THE AVAIL-
ABILITY OF AFFORDABLE HOUSING.
3. THE COMMISSIONER SHALL REVIEW ANNUALLY EACH ENTITY, DEVELOPER, OR
CONTRACTOR THAT IS ISSUED AN EXEMPTION UNDER SUBDIVISION TWO OF THIS
SECTION TO ENSURE THAT THE ENTITY CONTINUES TO MEET THE CRITERIA IN SUCH
SUBDIVISION. IF AN ENTITY, DEVELOPER, OR CONTRACTOR FAILS TO MEET SUCH
CRITERIA, THE COMMISSIONER SHALL WITHDRAW THE EXEMPTION AND THE ENTITY
IS SUBJECT TO ENFORCEMENT PROCEEDINGS UNDER SECTION THREE HUNDRED
SIXTY-THREE OF THIS ARTICLE. THE COMMISSIONER SHALL SUBMIT A REPORT WITH
A LIST OF EACH ENTITY THAT IS ISSUED AN EXEMPTION UNDER SUBDIVISION TWO
OF THIS SECTION TO THE CHAIRS OF THE SENATE HOUSING, CONSTRUCTION AND
COMMUNITY DEVELOPMENT COMMITTEE AND THE ASSEMBLY HOUSING COMMITTEE ANNU-
ALLY BY THE FIRST OF OCTOBER.
§ 363. ENFORCEMENT. IF THE ATTORNEY GENERAL HAS REASON TO BELIEVE THAT
A CORPORATE ENTITY, REAL ESTATE DEVELOPER, OR RESIDENTIAL BUILDING
CONTRACTOR IS IN VIOLATION OF THE PROVISIONS OF THIS ARTICLE, THE ATTOR-
NEY GENERAL SHALL COMMENCE AN ACTION IN THE DISTRICT COURT IN WHICH ANY
REAL PROPERTY RELATIVE TO SUCH VIOLATION IS SITUATED. THE ATTORNEY
GENERAL SHALL FILE A NOTICE OF THE PENDENCY OF THE ACTION FOR RECORD
WITH THE COUNTY CLERK OF EACH COUNTY IN WHICH ANY PORTION OF SAID PROP-
ERTY IS LOCATED. IF THE COURT FINDS THAT THE PROPERTY IN QUESTION IS
BEING HELD IN VIOLATION OF THIS ARTICLE, IT SHALL ENTER AN ORDER SO
DECLARING. THE ATTORNEY GENERAL SHALL FILE FOR RECORD ANY SUCH ORDER
WITH THE COUNTY CLERK FOR THE COUNTY IN WHICH THE PROPERTY IS LOCATED.
THEREAFTER, THE CORPORATE ENTITY, REAL ESTATE DEVELOPER, OR RESIDENTIAL
BUILDING CONTRACTOR IN VIOLATION OF THE PROVISIONS OF THIS ARTICLE SHALL
HAVE A PERIOD OF ONE YEAR FROM THE DATE OF SUCH ORDER TO DIVEST ITSELF
OF THE PROPERTY. THE AFOREMENTIONED ONE-YEAR LIMITATION PERIOD SHALL BE
DEEMED A COVENANT RUNNING WITH THE TITLE TO THE PROPERTY AGAINST THE
ENTITY, DEVELOPER, CONTRACTOR, ASSIGNEE, OR SUCCESSOR. ANY PROPERTY NOT
SO DIVESTED WITHIN THE TIME PRESCRIBED SHALL BE SOLD AT PUBLIC SALE IN
THE MANNER PRESCRIBED BY LAW FOR THE FORECLOSURE OF A MORTGAGE BY
ACTION. IN ADDITION, ANY PROSPECTIVE OR THREATENED VIOLATION MAY BE
ENJOINED BY AN ACTION BROUGHT BY THE ATTORNEY GENERAL IN THE MANNER
PROVIDED BY LAW.
§ 364. RULES AND REGULATIONS. THE COMMISSIONER SHALL PROMULGATE ALL
RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS SECTION.
§ 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law. Effective immediately, the addition, amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation of this act on its effective date are authorized to be made and
completed on or before such effective date.