Bill Text: NY A01075 | 2023-2024 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Establishes a program to address the legalization of specified basements and cellars and the conversion of other specified basements and cellars in a city with a population of one million or more.
Spectrum: Partisan Bill (Democrat 32-0)
Status: (Introduced) 2024-03-25 - print number 1075b [A01075 Detail]
Download: New_York-2023-A01075-Amended.html
Bill Title: Establishes a program to address the legalization of specified basements and cellars and the conversion of other specified basements and cellars in a city with a population of one million or more.
Spectrum: Partisan Bill (Democrat 32-0)
Status: (Introduced) 2024-03-25 - print number 1075b [A01075 Detail]
Download: New_York-2023-A01075-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 1075--A 2023-2024 Regular Sessions IN ASSEMBLY January 13, 2023 ___________ Introduced by M. of A. EPSTEIN, GONZALEZ-ROJAS, GLICK, MAMDANI, GALLAGH- ER, REYES, JACKSON, CARROLL, BICHOTTE HERMELYN, AUBRY, BENEDETTO, TAPIA, MITAYNES, SIMON, ANDERSON, CRUZ, GIBBS, FORREST, CUNNINGHAM, BURDICK, RAGA, BURGOS, ARDILA, SEPTIMO, BORES, SEAWRIGHT, RAMOS -- read once and referred to the Committee on Local Governments -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the multiple dwelling law and the private housing finance law, in relation to establishing a program to address the legalization of specified basements and cellars and the conversion of other specified basements and cellars in a city with a population of one million or more The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The multiple dwelling law is amended by adding a new arti- 2 cle 7-D to read as follows: 3 ARTICLE 7-D 4 LEGALIZATION AND CONVERSION OF BASEMENTS AND CELLARS 5 Section 288. Definitions. 6 289. Basement and cellar local laws and regulations. 7 290. Tenant protections in inhabited basements and cellars. 8 § 288. Definitions. As used in this article, unless the context or 9 subject matter requires otherwise, the following terms shall have the 10 following meanings: 11 1. The term "inhabited basement or cellar" means a basement or cellar 12 unlawfully occupied as a residence by one or more tenants on or prior to 13 the effective date of this article; 14 2. The term "rented" means leased, let, or hired out, with or without 15 a written agreement; and 16 3. The term "tenant" means an individual to whom an inhabited basement 17 or cellar dwelling unit is rented. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03476-03-3A. 1075--A 2 1 § 289. Basement and cellar local laws and regulations. 1. Notwith- 2 standing any other provision of state or local law to the contrary, in a 3 city with a population of one million or more, the local legislative 4 body may, by local law, establish a program to address, provided that 5 health and safety are protected, (a) the legalization of specified 6 inhabited basements and cellars in existence prior to the effective date 7 of this article through conversion to legal dwelling units, and (b) the 8 conversion of other specified basements and cellars in existence prior 9 to the effective date of this article to legal dwelling units. The local 10 law authorized by this section, and any rules or regulations promulgated 11 thereunder, shall not be subject to environmental review, including, but 12 not limited to, environmental review conducted pursuant to article eight 13 of the environmental conservation law and any state and local regu- 14 lations promulgated thereunder. 15 2. The program established by such local law may provide to an owner 16 who converts a basement or cellar in accordance with a local law author- 17 ized by this article or who otherwise abates the illegal occupancy of a 18 basement or cellar: (a) amnesty from any civil or administrative liabil- 19 ity, citations, fines, penalties or any other enforcement of or prose- 20 cution for civil violations of this chapter, other state law or local 21 law or rules, and the zoning resolution of such city, and (b) relief 22 from any outstanding civil judgments issued in connection with any such 23 violation of such laws, rules or zoning resolution issued before the 24 effective date of this article; provided, however, that such local law 25 shall require that such amnesty or relief shall be available only to an 26 owner that has submitted an application for a conversion by a date 27 certain subsequent to the effective date of such local law and that such 28 date shall not be later than ten years after the effective date of such 29 local law. 30 3. (a) Such local law may supercede any provision of local law or rule 31 to facilitate the conversion of a specified inhabited basement or cellar 32 or other specified basement or cellar in existence prior to the effec- 33 tive date of this article into a lawful dwelling unit. For the purposes 34 of this program, the local law adopted by the legislative body of such 35 municipality shall be no less stringent than the relevant standards or 36 specifications of the uniform fire prevention and building code and 37 state energy conservation construction code applicable to the conversion 38 of basements and cellars to habitable dwelling units in municipalities 39 other than a city with a population of one million or more, unless such 40 legislative body determines that the application of such standards or 41 specifications would present practical difficulties that impede the 42 purposes of this article and includes in such local law an alternative 43 standard or specification that such legislative body determines to be 44 sufficient to protect public safety. 45 (b) Such local law may supersede the following provisions of this 46 chapter: sections twenty-six, twenty-eight, thirty, thirty-one, thirty- 47 two, thirty-three, thirty-four, thirty-five, thirty-six, thirty-seven, 48 fifty, fifty-a, fifty-one, fifty-two, fifty-four, fifty-six, sixty-one, 49 sixty-two, sixty-three, sixty-four, sixty-five, sixty-eight, and seven- 50 ty-six, and articles four, five and six. 51 (c) Any amendment of the zoning resolution necessary to enact such 52 program shall be subject to a public hearing at the planning commission 53 of such locality, and approval by such commission and the legislative 54 body of such local government, provided, however, that it shall not 55 require environmental review, including, not limited to, environmental 56 review conducted pursuant to article eight of the environmental conser-A. 1075--A 3 1 vation law and any state and local regulations promulgated thereunder, 2 or any additional land use review. 3 § 290. Tenant protections in inhabited basements and cellars. 1. The 4 program authorized by this article shall require an application to make 5 alterations to legalize an inhabited basement or cellar be accompanied 6 by a certification indicating whether such unit was rented to a tenant 7 on the effective date of this article, notwithstanding whether the occu- 8 pancy of such unit was authorized by law. An agency or office of a city 9 where the program has been established may not use such certification as 10 the basis for an enforcement action for illegal occupancy of such unit, 11 provided that nothing contained in this article shall be construed to 12 limit any agency or office from issuing a vacate order for hazardous 13 conditions. 14 2. The local law authorized by this article shall provide that a 15 tenant in occupancy at the time of the effective date of this article 16 who is evicted or otherwise removed from such unit as a result of an 17 alteration necessary to bring an inhabited basement or cellar into 18 compliance with the standards established by the local law authorized by 19 this article, shall have a right of first refusal to return to such unit 20 as a tenant upon its first lawful occupancy as a legal dwelling unit, 21 notwithstanding whether the occupancy at the time of the effective date 22 of this article was authorized by law. Such local law shall specify how 23 to determine priority when multiple tenants may claim such right. 24 3. A tenant unlawfully denied a right of first refusal to return to a 25 legal dwelling unit, as provided pursuant to the local law authorized by 26 this article, shall have a cause of action against the owner of such 27 dwelling unit in any court of competent jurisdiction for compensatory 28 damages or declaratory and injunctive relief as the court deems neces- 29 sary in the interests of justice, provided that such compensatory relief 30 shall not exceed the annual rental charges for such legal dwelling unit. 31 4. Notwithstanding the local emergency housing rent control act of 32 1962 as amended, the local law authorized by this article shall include 33 protections against eviction and limitations on rent increases for base- 34 ment or cellar dwelling units that undergo legalization, including limi- 35 tations on rent increases for tenants returning to such units pursuant 36 to the provisions of subdivision two of this section. 37 § 2. The private housing finance law is amended by adding a new arti- 38 cle 8-C to read as follows: 39 ARTICLE VIII-C 40 LOANS TO OWNERS OF ONE TO FOUR UNIT PRIVATE AND MULTIPLE DWELLINGS 41 Section 480. Policy and purposes of article. 42 481. Definitions. 43 482. Loans to owners. 44 483. Conditions precedent to making loans to owners. 45 484. Servicing of loans by banking institutions and loan servic- 46 ing companies. 47 485. Interest reduction subsidies. 48 486. Mortgage recording tax exemption. 49 487. Rules and regulations. 50 488. Source of funds. 51 § 480. Policy and purposes of article. It is hereby declared and found 52 that there exists in cities with a population of one million or more a 53 seriously inadequate supply of safe and sanitary dwelling units, partic- 54 ularly for persons of low and moderate income. It further is found that 55 there exists in such cities many basements and cellars in one to four 56 unit dwellings, some of which are inhabited unlawfully, that could beA. 1075--A 4 1 converted into safe and sanitary lawful dwelling units. It further is 2 found that such conversion and any associated rehabilitation or improve- 3 ment of such dwellings cannot be readily accomplished without public aid 4 in the form of low interest loans or grants to owners of such dwellings. 5 The creation of lawful and habitable dwelling units in basements and 6 cellars of one to four unit dwellings is hereby declared a public 7 purpose and a municipal purpose for which public monies may be loaned or 8 granted. In order to further such purpose, it is hereby declared that 9 additional provisions should be made to provide public monies for inter- 10 est reduction subsidies for private loans made by private investors for 11 such rehabilitation. The necessity in the public interest for the 12 provisions of this article is hereby declared as a matter of legislative 13 determination. 14 § 481. Definitions. 1. "Agency" shall mean the department of housing 15 preservation and development of the city of New York or any successor 16 thereto. 17 2. "Banking organization" shall mean any corporation, association or 18 organization organized under the banking laws of New York state or the 19 United States which is authorized to transact business in this state. 20 3. "Basement" shall have the same meaning as provided in subdivision 21 thirty-eight of section four of the multiple dwelling law. 22 4. "Cellar" shall have the same meaning as provided in subdivision 23 thirty-seven of section four of the multiple dwelling law. 24 5. "City" shall mean a city with a population of one million or more. 25 6. "Climate resiliency improvements" shall mean improvements for the 26 purpose of protecting land or any structures thereon from damage result- 27 ing from or which may result from changes in climate, including, but not 28 limited to, extreme weather events, abnormal temperatures, and sea level 29 rise, or of reducing the impact of the operation of such structures on 30 climate change, including, but not limited to, improvements that reduce 31 energy consumption or promote the efficient use of natural resources. 32 7. "Existing multiple dwelling" shall mean a multiple dwelling as 33 defined in section four of the multiple dwelling law that is in exist- 34 ence on the date upon which an application for a loan pursuant to this 35 article is received by the agency. 36 8. "Existing private dwelling" shall mean a private dwelling as 37 defined in section four of the multiple dwelling law that is in exist- 38 ence on the date upon which an application for a loan pursuant to this 39 article is received by the agency. 40 9. "Federal grant funds" shall mean any grants received from the 41 federal government for community development activities or for the reha- 42 bilitation or conservation of private or multiple dwellings. 43 10. "Loan" shall mean a loan or a grant made by the city pursuant to 44 section four hundred eighty-two of this article, provided, however, that 45 provisions of this article concerning the repayment or forgiveness of, 46 or security for, a loan shall not apply to any grant made pursuant to 47 this article. 48 11. "Owner" shall mean an individual, a partnership, a corporation or 49 other entity, including, but not limited to, a trust, or a joint tenan- 50 cy, tenancy in common or tenancy by the entirety holding record or bene- 51 ficial title in fee simple to an existing private or multiple dwelling 52 and the real property upon which it is situated, or the lessee thereof 53 under a lease having an unexpired term of at least thirty years. "Owner" 54 shall be deemed to also include a cooperative corporation or a condomin- 55 ium association.A. 1075--A 5 1 12. "Private investor" shall mean a banking organization, foundation, 2 public benefit corporation, labor union, credit union, employers' asso- 3 ciation, veterans' organization, college, university, educational insti- 4 tution, child care institution, hospital, medical research institute, 5 insurance company, trustee or fiduciary, trustees of a pension and 6 retirement fund or system, corporation, partnership, individual or other 7 entity or any combination of the foregoing, and shall include the United 8 States of America and any of its agencies and departments. 9 13. "Rehabilitation" shall mean the installation, replacement, or 10 repair of heating, plumbing, electrical and related systems or the elim- 11 ination of conditions dangerous to human life or detrimental to health, 12 including nuisances as defined in local housing or health codes or as 13 defined in section three hundred nine of the multiple dwelling law, or 14 other rehabilitation or general property and energy conservation 15 improvements. 16 14. "State grant funds" shall mean any grant received from the state 17 or any public benefit corporation for community development activities 18 or for the rehabilitation or conservation of private or multiple dwell- 19 ings. 20 § 482. Loans to owners. 1. Notwithstanding the provisions of any 21 general, special or local law, the city, acting through the agency, is 22 authorized: 23 (a) to make, or contract to make, loans to owners of one to four unit 24 existing private or multiple dwellings, subject to the limitation of 25 subdivisions two through seven of this section, in such amounts as shall 26 be required for the conversion of a basement or cellar in a one to four 27 unit private or multiple dwelling to a safe and sanitary lawful dwelling 28 unit and other rehabilitation of or improvements to such private or 29 multiple dwelling, including, but not limited to, climate resiliency 30 improvements, that the agency may determine are needed in such dwelling; 31 (b) to make temporary loans or advances to owners of one to four unit 32 existing private or multiple dwellings in anticipation of permanent 33 loans to such owners for the purposes described in paragraph (a) of this 34 subdivision; and 35 (c) to make or contract to make grants to any owner described in para- 36 graph (a) of this subdivision, on the same terms as permitted under such 37 paragraph for a loan. 38 2. Each loan shall be evidenced by a note executed by the owner of the 39 existing dwelling. Repayment of each such note shall be within a period 40 of forty years, provided that such period may be extended as the agency 41 may determine necessary to ensure the continued affordability or econom- 42 ic viability of the existing dwelling. The repayment shall be made in 43 such manner as may be provided in such note and contract, if any, in 44 connection with such loan, and may authorize such owner, with the 45 consent of the agency, to prepay the principal of the loan subject to 46 such terms and conditions as therein provided. In order to make any such 47 loan affordable to the owner, the agency may provide in such note and 48 contract that all of the outstanding principal of said loan may be self- 49 liquidated over a period of not less than fifteen years of continuous 50 compliance by the owner with a regulatory agreement or restrictive 51 covenant with or approved by the agency and upon the satisfaction of any 52 additional conditions specified therein. Such note and contract may 53 contain such other terms and provisions not inconsistent with the 54 provisions of this article as the agency may deem necessary or desirable 55 to secure repayment of the loan, the interest thereon, if any, and other 56 charges in connection therewith, and to carry out the purposes andA. 1075--A 6 1 provisions of this article, including, but not limited to, providing 2 that the lien created by the note and mortgage, and, if applicable, any 3 regulatory agreement executed by such owner and agency or restrictive 4 covenant approved by such agency, may be recorded in an equal or subor- 5 dinate position, or subsequently made equal or subordinate, to a lien 6 recorded by any private investor against such existing dwelling. 7 3. The agency in its discretion may require that the owner execute, 8 acknowledge and deliver a uniform commercial code financing statement 9 for the real property improvement to be in such form as the agency shall 10 specify and in accordance with the requirements of section 9--502 of the 11 uniform commercial code of the state of New York. Said financing state- 12 ment shall be filed or recorded without charge in accordance with the 13 provisions of paragraph one of subsection (a) of section 9--501 of the 14 uniform commercial code, and from the date of such filing the city shall 15 have a lien against said real property improvement for the amount 16 advanced or so much thereof as remains unpaid together with the interest 17 thereon. Upon payment of all sums advanced by the city and interest 18 thereon, and upon demand of the then record owner of the real property, 19 the agency shall deliver a copy of the financing statement with an 20 endorsement thereon that the lien is satisfied. Upon filing of such copy 21 in the office where the financing statement was filed and upon payment 22 of the proper fee therefor, the lien of such financing statement shall 23 be discharged. 24 4. The agency may require the owner to execute a mortgage as security 25 for a loan in lieu of or in addition to a financing statement as 26 provided in subdivision three of this section. Such mortgage shall 27 contain such terms and provisions not inconsistent with the provisions 28 of this article as the agency shall deem necessary or desirable to 29 secure repayment of the loan. 30 5. Loans may be made with respect to a one to four unit private or 31 multiple dwelling encumbered by mortgages, provided no mortgage is in 32 default, except if such default shall be remedied by the proposed reha- 33 bilitation or improvement. 34 6. The agency may require the payment of charges by an owner of such 35 existing private or multiple dwelling in consideration for the financ- 36 ing, regulation, supervision and audit of such loan. Such charges shall 37 be paid into the treasury of the city requiring the charges and shall be 38 paid and deposited in the general fund of such city. 39 7. In making a loan under this article, the agency shall have the 40 power to participate in a loan made by any private investor. The agency 41 may enter into an agreement with a private investor to deposit funds 42 with such private investor to cover the agency's participation in loans 43 to owners of one to four unit existing private and multiple dwellings 44 with such funds advanced by such private investor to owners of such 45 existing dwellings. The portion of the loan funded by the agency may be 46 equal to or subordinate in lien to the portion of the loan funded by the 47 private investor and the note and contract may contain such terms with 48 respect to interest rate, if any, and time of payment of principal and 49 interest as determined by the agency. The agency may make provision, 50 either in the mortgage or mortgages or by separate agreement, for the 51 performance by the private investor of such services as are generally 52 performed by a banking institution which itself holds a mortgage, 53 including, without limitation, construction loan advances, construction 54 supervision, initiation of foreclosure proceedings, procurement of 55 insurance, and all other matters in connection with the financing, 56 supervision, regulation and audit of any such loan. In order to make theA. 1075--A 7 1 loan affordable to the owner, the agency may provide an interest 2 reduction subsidy pursuant to section four hundred eighty-five of this 3 article, or may provide that all or part of the agency's portion of the 4 outstanding principal of any such participation loan may be self-liqui- 5 dated over a period of not less than fifteen years of continuous compli- 6 ance by the owner with a regulatory agreement or restrictive covenant 7 with or approved by the agency and upon the satisfaction of any addi- 8 tional conditions specified therein. 9 § 483. Conditions precedent to making loans to owners. 1. No such loan 10 shall be made to an owner of an existing private or multiple dwelling 11 unless such owner shall covenant in writing that so long as any part of 12 such loan shall remain unpaid or any requirement imposed as a condition 13 for making such loan that survives the repayment of such loan, includ- 14 ing, but not limited to, in a regulatory agreement executed pursuant to 15 subdivision two of this section or a restrictive covenant approved by 16 such agency, remains in effect: (a) the owner or managing agent or oper- 17 ator of such dwelling shall permit the duly authorized officers, employ- 18 ees, agents or inspectors of the agency to enter in or upon and inspect 19 such dwelling at all reasonable hours; (b) the agency by such duly 20 authorized representatives as aforesaid shall have full power to inves- 21 tigate into and order the owner of such dwelling to furnish such reports 22 and information as it may require concerning the conversion of the base- 23 ment or cellar in such dwelling and all other rehabilitation or improve- 24 ments funded with such loan and shall have full power to audit the books 25 of said owner with respect to such matters; and (c) if the basement or 26 cellar to be converted is in a multiple dwelling, the owner will submit 27 to the agency annually a statement of income and expenses of such dwell- 28 ing, in such form as shall be approved by the agency. 29 2. No such loan shall be made to an owner of an existing private or 30 multiple dwelling unless the agency and such owner shall have executed a 31 regulatory agreement that includes protections against eviction and 32 limitations on rent increases applicable to each basement or cellar 33 dwelling unit for which the loan is to be made. 34 3. The agency shall have the power to impose additional terms and 35 conditions precedent to make such loans. 36 § 484. Servicing of loans by banking institutions and loan servicing 37 companies. 1. The agency may make provision in the note and loan agree- 38 ment or by separate agreement for the performance by one or more banking 39 institutions of such services as are generally performed by any such 40 bank itself owning and holding such a loan and as may be approved by the 41 superintendent of financial services for which services a bank may make 42 and collect such service charges as the superintendent shall prescribe 43 or approve. 44 2. The agency may make provision in the note and loan agreement or by 45 separate agreement for the servicing of such loans by a loan servicing 46 company or other qualified entity, as determined by the agency, and such 47 services may include, but not be limited to, the collection of the debt 48 services on such loans and the establishment, administration, and 49 distribution of an escrow account for the payment of the owner's real 50 estate taxes, sewer and water rents and fire insurance. 51 § 485. Interest reduction subsidies. Notwithstanding the provisions of 52 any general, special or local law, the city, acting through the agency, 53 is authorized to provide, or contract to provide, interest reduction 54 subsidies for loans made by private investors to owners of one to four 55 unit existing private or multiple dwellings pursuant to paragraph (a) of 56 subdivision one of section four hundred eighty-two of this article, ifA. 1075--A 8 1 such owners would have been eligible under the provisions of this arti- 2 cle for a loan made by the city pursuant to this article. 3 § 486. Mortgage recording tax exemption. Notwithstanding any incon- 4 sistent provision of law, mortgages to secure a loan made pursuant to 5 the provisions of this article shall be exempt from the mortgage record- 6 ing taxes imposed by article eleven of the tax law. 7 § 487. Rules and regulations. The agency may promulgate rules and 8 regulations to carry out the provisions of this article. 9 § 488. Source of funds. The city may utilize federal grant funds, 10 state grant funds or any municipal funds to make loans and to provide 11 interest reduction subsidies pursuant to this article. 12 § 3. This act shall take effect immediately.
