Bill Text: NY S07332 | 2019-2020 | General Assembly | Introduced


Bill Title: Authorizes towns in the Peconic Bay region to establish community housing funds to be funded by a supplemental real estate transfer tax; defines terms; outlines eligible expenses; establishes an advisory board in any town which has established a community housing fund to review and make recommendations regarding the town's community housing plan; makes related provisions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2020-01-17 - REFERRED TO LOCAL GOVERNMENT [S07332 Detail]

Download: New_York-2019-S07332-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

            S. 7332                                                  A. 9082

                SENATE - ASSEMBLY

                                    January 17, 2020
                                       ___________

        IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
          ed, and when printed to be committed to the Committee on Local Govern-
          ment

        IN  ASSEMBLY  -- Introduced by M. of A. THIELE, PALUMBO -- read once and
          referred to the Committee on Local Governments

        AN ACT to amend the town law and the tax law, in relation to authorizing
          towns in the Peconic Bay region to establish community  housing  funds
          to be funded by a supplemental real estate transfer tax

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

     1    Section 1. Legislative findings.   The legislature hereby  finds  that
     2  critical  to  the  future  of  the Peconic Bay region is the need for an
     3  adequate supply of housing opportunities for all segments of the Peconic
     4  Bay community.
     5    The adverse impact resulting from the lack of housing opportunities is
     6  severe. Local employers  are  having  difficulty  hiring  and  retaining
     7  employees  because  of  housing  costs and availability. Local volunteer
     8  emergency services agencies are experiencing difficulty  in  recruitment
     9  and  retention.  Long-time residents are forced to leave the area. Traf-
    10  fic congestion is intensified by the importation  of  labor  from  areas
    11  with lower housing costs.  Finally, the lack of housing opportunities is
    12  resulting  in  residents  being  forced  to live in substandard, illegal
    13  conditions.
    14    The unique demographics and economics in the Peconic Bay region and  a
    15  lack of affordable dwelling units are contributing to this housing shor-
    16  tage.  The combination of the Peconic Bay region's attractiveness, prox-
    17  imity to the dense population of the New York metropolitan region and to
    18  that region's extraordinary wealth, makes the Peconic Bay region a prime
    19  location  for  seasonal  and  luxury  homes.  While  this combination of
    20  extraordinary attractiveness, population density, and wealth has created
    21  a strong local economy for the Peconic Bay region, it has resulted in  a
    22  housing  crisis for local families. In the Peconic Bay region, more than
    23  40% of all housing units are seasonal.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03159-15-0

        S. 7332                             2                            A. 9082

     1    In summary, the demand of land  for  luxury  and  seasonal  homes  and
     2  seasonal  rentals  has  left a short supply of housing opportunities for
     3  moderate income and working class local residents. The implementation of
     4  the new federal tax bill will only exacerbate this problem by making  it
     5  more  difficult  for  first time homebuyers by imposing a $10,000 cap on
     6  the deductibility of state and local taxes and by reducing the  mortgage
     7  interest  deduction  on new mortgages. The Peconic Bay region requires a
     8  balanced housing policy where there exists a variety  of  housing  types
     9  and opportunities across the region's economic spectrum.
    10    It  is the public purpose of this legislation to give the towns of the
    11  Peconic Bay region the authority and resources  needed  to  establish  a
    12  dedicated  fund  to  provide needed housing opportunities. Specifically,
    13  this legislation would permit each town to establish a community housing
    14  fund to increase housing opportunities in the region.  Further,  a  town
    15  housing plan adhering to smart growth principles would be required to be
    16  approved  and implemented to insure that these new housing opportunities
    17  are enacted in the context of a comprehensive plan. The  fund  shall  be
    18  enacted by local law subject to a mandatory referendum.
    19    Said fund would be financed by a combination of state and local funds,
    20  including  a  0.5% supplemental real estate transfer tax, which would be
    21  in addition to the existing 2% real estate transfer tax for the  Peconic
    22  Bay region community preservation fund.
    23    In addition, the exemption amounts from the total real estate transfer
    24  tax  would  be  increased  to $400,000 in the towns of Southampton, East
    25  Hampton and Shelter Island and to $280,000 in the towns of Riverhead and
    26  Southold. This will insure that in the towns of East Hampton,  Southamp-
    27  ton,  and  Shelter  Island, the real estate transfer tax will be reduced
    28  from current law for  property  transfers  with  a  consideration  under
    29  $1,000,000.   The real estate transfer tax would be reduced from current
    30  law in the towns of Southold and Riverhead for property transfers with a
    31  consideration under $800,000. Finally, the purchase price limit for  the
    32  exemption for first time homebuyers in the towns of East Hampton, South-
    33  ampton  and  Shelter  Island would be increased from 120% to 150% of the
    34  purchase price limit defined by the state of New York  mortgage  agency.
    35  These  amendments  to the exemptions will reduce any adverse impact from
    36  the transfer tax on the provision of community housing.
    37    § 2. This act shall be known and may be  cited  as  the  "Peconic  Bay
    38  region community housing act".
    39    §  3.  The town law is amended by adding a new section 64-k to read as
    40  follows:
    41    § 64-k. Peconic Bay region community housing fund.  1. Definitions. As
    42  used in this section, the following  words  and  terms  shall  have  the
    43  following meanings:
    44    (a)  "Peconic  Bay region" means the towns of East Hampton, Riverhead,
    45  Shelter Island, Southampton, and Southold.
    46    (b) "Community housing" means a primary residential  property  for  an
    47  eligible  individual  that  does not exceed one hundred fifty percent of
    48  the purchase price limits established by the state of New York  mortgage
    49  agency  low  interest  rate  loan  program  in non-target categories for
    50  Suffolk county in effect on the contract date for the sale of such prop-
    51  erty.
    52    (c) "Board" means the advisory board created pursuant  to  subdivision
    53  six of this section.
    54    (d)  "Fund"  means  the  community housing fund authorized pursuant to
    55  subdivision two of this section.

        S. 7332                             3                            A. 9082

     1    (e) "First-time homebuyer" means an eligible individual  who  has  not
     2  owned  a primary residential property and is not married to a person who
     3  has owned a residential property during the three-year period  prior  to
     4  his  or  her  purchase of the primary residential property, and who does
     5  not own a vacation or investment home.
     6    (f)  "Primary residential property" means any one or two family house,
     7  townhouse, or condominium.
     8    (g) "Eligible individual" means a household with an income  that  does
     9  not  exceed  one  hundred percent of the income limits as established by
    10  the state of New York mortgage agency low interest rate loan program  in
    11  non-target  categories for Suffolk county in effect on the contract date
    12  for the sale of such property.
    13    2. Fund authorized. The town board of any  town  in  the  Peconic  Bay
    14  region is authorized to establish by local law a community housing fund,
    15  pursuant  to  the provisions of this section. Deposits into the fund may
    16  include revenues of the local government from whatever source, including
    17  but not limited to: (a) all revenues from the supplemental  real  estate
    18  transfer  tax  authorized by subdivision two of section fourteen hundred
    19  forty-nine-bb of the tax law; (b) all proceeds from any indebtedness  or
    20  obligations issued pursuant to the local finance law for community hous-
    21  ing  opportunity  purposes  as  authorized  in subdivision three of this
    22  section; (c) general  fund  balances  or  surpluses;  (d)  any  proceeds
    23  received  by  the  local government from the sale or rental of community
    24  housing produced from revenues of the fund; (e)  the  repayment  of  any
    25  loans  issued  from  proceeds of the fund; (f) any gifts of interests in
    26  land or funds; (g) any state or federal grants received by the town  for
    27  providing affordable homes.
    28    3. Purposes of the fund. The proceeds of the fund established pursuant
    29  to  subdivision  two of this section shall be utilized for the following
    30  purposes:
    31    (a) the provision of financial assistance to first-time homebuyers who
    32  are residents of the town for the purchase of a first home.  Said finan-
    33  cial assistance may be in the form of grants or loans.
    34    (1) A town may provide financial assistance to a first-time  homebuyer
    35  who  is  a  resident  of the town or who is employed in the town for the
    36  purchase of a first home. A resident of the town shall include a  person
    37  who is currently a resident of the town or a non-resident who has been a
    38  resident within the past five years.
    39    (2)  Said  financial  assistance shall not exceed fifty percent of the
    40  purchase price of the home.
    41    (3) If said financial assistance is in the form of a loan,  said  loan
    42  shall  be  repayable to the town pursuant to the terms agreed to between
    43  the recipient and the town, provided that, at a minimum, any loan  shall
    44  be fully repaid by the recipient upon the resale of the home.
    45    (4)  For the purposes of calculating town tax liability for such prop-
    46  erty, only, the dollar  amount  of  any  financial  assistance  for  the
    47  purchase of a first home made by the town pursuant to this section shall
    48  be subtracted from the full equalized assessed value of such property.
    49    (5)  All  revenues  received  by the town from the repayment of a loan
    50  shall be deposited in the fund.
    51    (6) A town may provide financial assistance for community  housing  in
    52  conjunction  with  a  public/private  partnership  for employer assisted
    53  housing.
    54    (b) the actual production of community housing for  sale  to  eligible
    55  individuals by the town;

        S. 7332                             4                            A. 9082

     1    (c)  the  actual  production of community housing for sale to eligible
     2  individuals in conjunction with a public/private partnership, where  the
     3  private  partner  agrees to comply with the profit guidelines of the New
     4  York state affordable housing corporation and  the  provisions  of  this
     5  section;
     6    (d)  the  actual  production  and maintenance of community housing for
     7  rental to eligible individuals either by the town or  the  town  housing
     8  authority;  or  in  conjunction with a public/private partnership, where
     9  the private partner agrees to comply with the profit guidelines  of  the
    10  New York state affordable housing corporation and the provisions of this
    11  section;
    12    (e)  the  rehabilitation  of  existing buildings and structures in the
    13  town for the purpose of conversion to  community  housing  for  sale  or
    14  rental to eligible individuals; and
    15    (f)  the  provision  of  housing counseling services by not-for-profit
    16  corporations who are authorized by the United States department of hous-
    17  ing and urban development to provide such services.
    18    4. Fund management. Interest accrued by monies deposited into the fund
    19  shall be credited to the fund. In no event shall monies  deposited  into
    20  the  fund be transferred to any other account. Nothing contained in this
    21  section shall be construed to prevent the financing in whole or in part,
    22  pursuant to the local finance law, of any purpose authorized pursuant to
    23  this section. Monies from the fund may be utilized to repay indebtedness
    24  or obligations incurred pursuant to the  local  finance  law  consistent
    25  with effectuating the purposes of this section.
    26    5.  Eligible  expenses.  For  the  purposes  of this section, eligible
    27  expenses relating to the production of community housing and  the  reha-
    28  bilitation  of  existing  buildings  and structures under the fund shall
    29  include but not be limited to land acquisition,  planning,  engineering,
    30  construction  costs,  and  other hard and soft costs directly related to
    31  the construction, rehabilitation, purchase or rental of housing pursuant
    32  to this section. All revenues received by the  town  from  the  sale  or
    33  rental  of community homes, or the repayment of loans shall be deposited
    34  in the fund.
    35    6. Advisory board established. The town  board  of  any  town  in  the
    36  Peconic Bay region which has established a community housing fund pursu-
    37  ant  to  this  section shall create an advisory board to review and make
    38  recommendations regarding the town's community housing plan required  by
    39  subdivision  seven of this section. Such board shall consist of not less
    40  than seven nor more than fifteen legal residents of the municipality who
    41  shall serve without compensation. No member  of  the  local  legislative
    42  body  shall serve on the board. The board shall include a representative
    43  of: (a) the construction industry; (b) the real estate industry; (c) the
    44  banking industry; and three representatives of local housing advocacy or
    45  human services organizations. Where a village or villages, located with-
    46  in the town, have elected to participate in the  fund,  as  provided  in
    47  subdivision  seven of this section, the board shall include at least one
    48  resident of a participating village or villages. Where an Indian  nation
    49  is  located  within the boundaries of a town, the board shall include at
    50  least one member from such nation. The board shall act  in  an  advisory
    51  capacity to the town board.
    52    7.  Adoption  of  housing plan.   (a) Before a town in the Peconic Bay
    53  region may establish the fund, the town board shall first adopt  a  town
    54  housing  plan which establishes an implementation plan for the provision
    55  of community housing opportunities by  the  fund.  Said  plan  shall  be

        S. 7332                             5                            A. 9082

     1  adopted  by  local  law.  Such  plan shall adhere to the following smart
     2  growth principles:
     3    (1)  Public  investment. To account for and minimize social, economic,
     4  and environmental costs of  new  development,  including  infrastructure
     5  costs  such  as transportation, sewers, and wastewater treatment, water,
     6  schools, recreation, and loss of open space and agricultural land;
     7    (2) Development. To encourage development in areas  where  transporta-
     8  tion, water, and sewage infrastructure are available or practical;
     9    (3)  Conservation.  To  protect,  preserve,  and  enhance  the state's
    10  resources, including agricultural land, forests, surface waters, ground-
    11  water, recreation and open space, scenic areas, and significant historic
    12  and archeological sites;
    13    (4) Coordination. To promote coordination of state and  local  govern-
    14  ment decisions and cooperation among communities to work toward the most
    15  efficient,  planned  and  cost-effective delivery of government services
    16  by, among other means, facilitating cooperative agreements  among  adja-
    17  cent  communities, and to coordinate planning to ensure compatibility of
    18  one's community development with development of neighboring communities;
    19    (5) Community design. To strengthen  communities  through  development
    20  and  redevelopment strategies that include integration of all income and
    21  age groups, mixed land uses, and compact development, traditional neigh-
    22  borhood development, planned unit  development,  open  space  districts,
    23  downtown  revitalization,  brownfield  redevelopment, enhanced beauty in
    24  public spaces, and diverse and community housing in close  proximity  to
    25  places of employment, recreation, and commercial development;
    26    (6)  Transportation.  To  provide  transportation  choices,  including
    27  increasing public transit and alternative modes  of  transportation,  in
    28  order  to  reduce automobile dependency, traffic congestion, and automo-
    29  bile pollution;
    30    (7) Consistency. To ensure predictability in  building  and  land  use
    31  codes; and
    32    (8)  Community  collaboration.  To  provide  for  and  encourage local
    33  governments to develop, through a collaborative community-based  effort,
    34  smart  growth  plans that include long term land use and permit predict-
    35  ability and coordination, efficient decision making and planning  imple-
    36  mentation.
    37    (b)  Such  plan  may  include  the establishment of a map or maps that
    38  delineate the housing implementation  recommendations  proposed  by  the
    39  town.
    40    (c)  Such  plan  shall be updated at least once every five years. Such
    41  plan and local law shall be adopted  at  least  sixty  days  before  the
    42  mandatory referendum required by subdivision ten of this section.
    43    (d) The town housing plan shall be an element of the town's comprehen-
    44  sive plan.
    45    (e) Such plan shall ensure that all community housing created pursuant
    46  to  this  section  remains  affordable.    Subsequent purchasers of such
    47  community housing shall have at the time of purchase,  pursuant  to  the
    48  definition  "eligible  individual",  an  income that does not exceed one
    49  hundred percent of the income limits as established by the state of  New
    50  York  mortgage agency low interest rate loan program in non-target cate-
    51  gories for Suffolk county.
    52    (f) Such plan shall provide for the equitable distribution of communi-
    53  ty housing opportunities among all the communities of the town. The plan
    54  shall ensure that no community is sited for an  undue  concentration  of
    55  community housing opportunities that would substantially alter the char-
    56  acter  of the community. In determining equitable distribution of commu-

        S. 7332                             6                            A. 9082

     1  nity housing opportunities, existing community housing opportunities  in
     2  a community shall be considered.
     3    8. Village participation.  (a) The participation of any village in the
     4  community  housing  program  authorized  by this section shall be at the
     5  option of the village. In order to participate, a village shall  pass  a
     6  resolution  opting  into the program and shall submit said resolution to
     7  the town board.
     8    (b) Where a village opts to participate pursuant to this  subdivision,
     9  an  intergovernmental  agreement  shall  be executed pursuant to article
    10  five-G of the general municipal law or other applicable legal authority,
    11  in order to establish the rights and responsibilities of each government
    12  regarding community housing opportunities.
    13    9. Intermunicipal agreements. Notwithstanding any provision of law  to
    14  the contrary, towns in the Peconic Bay region may enter into intermunic-
    15  ipal  agreements pursuant to article five-G of the general municipal law
    16  for purposes consistent with this section.
    17    10. Mandatory referendum. The local law or laws adopting  the  housing
    18  plan  and  establishing the community housing fund shall be subject to a
    19  mandatory referendum. Such local law or laws shall only become effective
    20  upon the adoption of said referendum by the electors of the town.
    21    § 4. Section 1449-bb of the tax law, as added by chapter  114  of  the
    22  laws of 1998, is amended to read as follows:
    23    §  1449-bb. Imposition of tax. 1. Notwithstanding any other provisions
    24  of law to the contrary, any town  in  the  Peconic  Bay  region,  acting
    25  through  its  town  board, is hereby authorized and empowered to adopt a
    26  local law imposing in such town a tax on each conveyance of real proper-
    27  ty or interest therein where  the  consideration  exceeds  five  hundred
    28  dollars,  at  the  rate  of  two  percent  of the consideration for such
    29  conveyance.  Provided, however, any such local law  imposing,  repealing
    30  or reimposing such tax shall be subject to a mandatory referendum pursu-
    31  ant  to  section  twenty-three  of the municipal home rule law. Notwith-
    32  standing the foregoing, prior to adoption of such local  law,  the  town
    33  must  establish a community preservation fund pursuant to section sixty-
    34  four-e of the town law. Revenues from such tax  shall  be  deposited  in
    35  such  fund  and  may  be used solely for the purposes of such fund. Such
    36  local law shall apply to any conveyance occurring on or after the  first
    37  day  of  a  month to be designated by such town board, which is not less
    38  than sixty days after the enactment of such local  law,  but  shall  not
    39  apply  to  conveyances  made  on  or after such date pursuant to binding
    40  written contracts entered into prior to such  date,  provided  that  the
    41  date  of execution of such contract is confirmed by independent evidence
    42  such as the recording of the contract, payment of  a  deposit  or  other
    43  facts and circumstances as determined by the treasurer.
    44    2.  Notwithstanding  any  other  provisions of law to the contrary, in
    45  addition to the tax authorized by subdivision one of this  section,  any
    46  town in the Peconic Bay region, acting through its town board, is hereby
    47  authorized  and  empowered  to adopt a local law imposing in such town a
    48  supplemental tax on each conveyance of real property or interest therein
    49  where the consideration exceeds five hundred dollars, at the rate of one
    50  half of one percent of the consideration for such conveyance.  Provided,
    51  however,  any  such  local  law  imposing, repealing or re-imposing such
    52  supplemental tax shall be subject to a mandatory referendum pursuant  to
    53  section twenty-three of the municipal home rule law. Notwithstanding the
    54  foregoing,  prior to adoption of such local law, the town must establish
    55  a community housing fund pursuant to section sixty-four-k  of  the  town
    56  law.    Revenues  from  such supplemental tax shall be deposited in such

        S. 7332                             7                            A. 9082

     1  fund and may be used solely for the purposes of such  fund.  Such  local
     2  law shall apply to any conveyance occurring on or after the first day of
     3  a  month  to  be  designated  by such town board, which is not less than
     4  sixty days after the enactment of such local law, but shall not apply to
     5  conveyances  made  on  or  after  such  date pursuant to binding written
     6  contracts entered into prior to such date, provided  that  the  date  of
     7  execution  of such contract is confirmed by independent evidence such as
     8  the recording of the contract, payment of a deposit or other  facts  and
     9  circumstances  as  determined by the treasurer. Any tax imposed pursuant
    10  to this subdivision shall be administered and collected in a like manner
    11  as the tax imposed by subdivision one of this section.
    12    § 5. Subdivision 3 of section 1449-ee of the  tax  law,  as  added  by
    13  chapter 114 of the laws of 1998, is amended to read as follows:
    14    3.  (a)  In the towns of East Hampton, Shelter Island and Southampton,
    15  an exemption of [two] four hundred [fifty]  thousand  dollars  shall  be
    16  allowed on the consideration of the conveyance of improved real property
    17  or  an interest therein and an exemption of one hundred thousand dollars
    18  shall be allowed on the consideration of the  conveyance  of  unimproved
    19  real property.
    20    (b)  In the towns of Riverhead and Southold, an exemption of [one] two
    21  hundred [fifty] eighty thousand dollars shall be allowed on the  consid-
    22  eration of the conveyance of improved real property or an interest ther-
    23  ein  and  an exemption of seventy-five thousand dollars shall be allowed
    24  on the consideration of the conveyance of unimproved real property.
    25    (c) The provisions of this subdivision shall only apply to conveyances
    26  for residential property where the consideration is two million  dollars
    27  or less.
    28    §  6.  Subparagraph  1  of  paragraph  (a) of subdivision 4 of section
    29  1449-ee of the tax law, as amended by chapter 389 of the laws  of  2014,
    30  is amended to read as follows:
    31    (1)  in the towns of Southampton, East Hampton and Shelter Island, the
    32  primary residential  property  is  within  one  hundred  [twenty]  fifty
    33  percent  of  the  purchase price limits defined by the state of New York
    34  mortgage agency low interest rate mortgage program in the non-target one
    35  family categories for Suffolk county in effect on the contract date  for
    36  the sale of such property;
    37    §  7. Severability clause. If any provision of this act or application
    38  thereof shall for any reason be  adjudged  by  any  court  of  competent
    39  jurisdiction  to  be invalid, such judgment shall not affect, impair, or
    40  invalidate the remainder of the act, but shall be confined in its opera-
    41  tion to the provision thereof directly involved in  the  controversy  in
    42  which the judgment shall have been rendered.
    43    §  8.  This act shall take effect immediately; provided, however, that
    44  the amendments to sections 1449-bb and 1449-ee of the tax law,  made  by
    45  sections  four, five, and six of this act shall not affect the repeal of
    46  article 31-D of the tax law and shall be deemed to  be  repealed  there-
    47  with.
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