Senate Bill S5179

                                 
BILL NUMBER: S5179

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to establish a two year moratorium on the third party transfer
program run by the department of housing preservation and development in
the city of New York

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this legislation is to prevent the City of New York from
unnecessarily, arbitrarily and mistakenly foreclosing on residential
properties via the third party transfer program run by the department of
housing preservation and development. This will be done by placing a
moratorium on the third party transfer program for two years.

 
SUMMARY OF PROVISIONS:

Section 1. This directs the commissioner of housing preservation and
development to place a two year moratorium on the department's third
party transfer program.
              

Section 2. Establishes the effective date.

 
JUSTIFICATION:

The third party transfer program has seemingly been misused by the city
of New York, threatening the stability of long time homeowners.  The
third party transfer program allows the city of New York to seize
distressed proprieties, typically those with outstanding charges to the
city or poor physical conditions, and transfer ownership to not-for-pro-
fit organizations or other groups working with the department of housing
preservation and development. The city maintains that seizing ownership
of these residential properties allows new management to improve the
condition of the property and establish rent regulations for future
tenants.

Recent press accounts have uncovered multiple instances of the depart-
ment of housing preservation and development seemingly seizing residen-
tial property from longtime homeowners for minor housing violations or
outstanding financial charges at court proceedings without notifying the
homeowners. Said homeowners are overwhelmingly people of color who own
their homes outright, without a mortgage, and have established long ties
to their communities. In some of these instances, the homeowners paid
money to the city for outstanding property tax arrears or other charges,
as verified by records, but this money paid was never credited to home-
owners' accounts. Some of these homeowners have worked to pay off charg-
es against their homes or improve physical conditions while ownership of
the house has already been transferred to not-for-profit or other organ-
izations working with the city. These homeowners are often not notified
about the change in ownership until after it has occurred. The city of
New York alleges it has maintained proper communications with homeowners
over every action it takes, but some property seizures have, occurred
with little to no public notice.  Several homeowners facing home
seizures have described difficulty navigating multiple city agencies
involved to make sure the finances and physical conditions of their
homes are in order, including the department of housing preservation and

development, the department of finance and the department of environ-
mental protection.

Many of the homes that were recently seized under the third party trans-
fer program are located in neighborhoods where the appraised values of
similar residential properties exceeds one million dollars as demand for
the residential real estate market grows. The seizure of these homes
from people of color in such gentrifying neighborhoods seemingly without
due process is a troubling sign. The city of New York has resisted calls
to rethink or temporarily halt the program ahead of further review. To
investigate potential wrongdoing by the city and discuss the future of
the third party transfer program, the legislature moves to act with a
two year moratorium.

 
PRIOR LEGISLATIVE HISTORY:

2024: S2655

2022: S5779

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

There are no fiscal implications associated with the passage of this
legislation.

 
EFFECTIVE DATE:
This act shall take effect immediately.