Bill Text: NY S01685 | 2023-2024 | General Assembly | Amended

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Bill Title: Establishes the small rental housing development initiative to provide funding to eligible applicants to construct small rental housing developments in eligible areas.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2024-01-09 - REPORTED AND COMMITTED TO FINANCE [S01685 Detail]

Download: New_York-2023-S01685-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         1685--A

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 13, 2023
                                       ___________

        Introduced  by  Sen. HINCHEY -- read twice and ordered printed, and when
          printed to be committed to the Committee on Housing, Construction  and
          Community  Development  -- committee discharged, bill amended, ordered
          reprinted as amended and recommitted to said committee

        AN ACT to amend the private housing finance law, in relation  to  estab-
          lishing the small rental housing development initiative

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The private housing finance law is amended by adding a  new
     2  article 17-C to read as follows:
     3                               ARTICLE XVII-C
     4                 SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE
     5  Section 1060. Legislative findings and statement of policy.
     6          1061. Definitions.
     7          1062. Small rental housing development initiative.
     8    §  1060. Legislative findings and statement of policy. The legislature
     9  hereby finds and declares that there exists in many rural areas  of  the
    10  state a substantial need for affordable rental housing of a size that is
    11  suitable  to small communities with limited infrastructure. The findings
    12  set forth in article seventeen of this  chapter,  with  respect  to  the
    13  special  needs  and problems of such areas and the significant potential
    14  role of locally based not-for-profit organizations in  helping  to  meet
    15  such  needs,  are  hereby  reaffirmed. The legislature hereby determines
    16  that, in addition to the program of  state  support  to  help  meet  the
    17  administrative expenses of such organizations under article seventeen of
    18  this  chapter,  a  further  public need exists for state funding for the
    19  development of affordable rental housing of twenty units or less.  It is
    20  the purpose of this article to encourage the construction of  affordable
    21  rental  housing  in the rural areas of the state by establishing a dedi-
    22  cated program of such funding.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05740-03-3
        S. 1685--A                          2

     1    § 1061. Definitions. For the purposes of this article,  the  following
     2  terms shall have the following meanings:
     3    1.  "Small  rental  housing developments" shall mean affordable rental
     4  apartment buildings of twenty units or less for low to  moderate  income
     5  households.
     6    2.  "Eligible  area"  shall  mean  a town or city with a population of
     7  thirty thousand or less.
     8    3. "Eligible applicant" shall mean a non-profit housing agency such as
     9  a rural preservation or neighborhood company or other similar non-profit
    10  entity chartered by the state.
    11    4. "Low to moderate-income household" shall mean a household  with  up
    12  to one hundred twenty percent of area median income.
    13    5.  "Period of affordability" shall mean the required length of time a
    14  project  must  meet  affordability  requirements  pursuant  to  24   CFR
    15  92.252(e) and to be specified in the project note and mortgage.
    16    §  1062.  Small  rental  housing development initiative. 1. Applicants
    17  constructing small rental housing developments in eligible  areas  shall
    18  be  eligible  for  state  funding  in the form of deferred loans at zero
    19  percent interest loans, due on sale. Such zero  interest  loans  may  be
    20  subject  to forgiveness in accordance with the provisions of subdivision
    21  two of this section.
    22    (a) The eligible applicant shall choose a payback period for such loan
    23  of between ten and twenty years.
    24    (b) The maximum per-unit subsidy shall be determined  by  the  commis-
    25  sioner.
    26    (c)  Funds shall be used for the construction of residential units and
    27  may be used for the construction of community rooms or common areas used
    28  for the benefit of residents.
    29    2.  (a) Zero interest loans issued in accordance with subdivision  one
    30  of  this  section  shall be deferred for the period of affordability. If
    31  the eligible applicant, who is the recipient of a  zero  interest  loan,
    32  remains  in compliance with all program requirements for the entirety of
    33  the period of affordability, the zero interest loan may be forgiven  and
    34  the mortgage lien placed against the property may be satisfied.
    35    (b) If the property of an eligible applicant is sold during the period
    36  of  affordability,  the sum of any outstanding mortgage must be re-paid.
    37  The mortgage lien may be assumed by a new purchaser only if approved  by
    38  the  housing  trust  fund  corporation,  subject  to  any  conditions or
    39  requirements set by the housing trust fund corporation.
    40    (c) The rental management requirements of  the  small  rental  housing
    41  initiative  shall  run  with the property throughout the entirety of the
    42  period of affordability, regardless of any change in ownership.
    43    (d) Awards made under this program shall be pursuant to  a  regulatory
    44  agreement,  including rent setting and any and all rent increases during
    45  the affordability period.
    46    3. The division of housing and  community  renewal  shall  notify,  in
    47  writing, all applicants who were not selected for funding of the reasons
    48  why  the  proposal  was  not funded, including the design, underwriting,
    49  legal or program deficiencies, deficiencies of any documents and/or  the
    50  basis  upon  which  the  application was determined to be ineligible for
    51  funding.
    52    4. The division of housing and community renewal shall provide for the
    53  review, at periodic intervals not less than annually, of the performance
    54  of applicants receiving grants or loans pursuant to this  article.  Such
    55  review  shall,  among  other things, be for the purposes of ascertaining
    56  the conformity to agreement provisions, and  adherence  to  regulations.
        S. 1685--A                          3

     1  Agreements  entered  into pursuant to this article may be terminated and
     2  funds may be withheld or recaptured  by  the  division  of  housing  and
     3  community renewal upon a finding of substantial nonperformance or breach
     4  by such applicant under its agreement.
     5    5.  The  division of housing and community renewal shall develop addi-
     6  tional procedures and requirements related to the application and  award
     7  of  funding for projects pursuant to this article as deemed necessary or
     8  appropriate to implement the purposes and provisions of this article.
     9    § 2. This act shall take effect immediately.