Honorable Sheldon Silver
Speaker of the Assembly
Legislative Office Building
Albany, New York 12248

Dear Mr. Speaker:

I am pleased to present the 2002 Annual Report for the Assembly Committee on Housing highlighting the accomplishments of the past Legislative Session. The achievements of the Committee include:

• extending the existing Loft Law until March 31, 2004. In addition, two other bills were passed by the Assembly to further protect tenants who reside in illegal lofts in New York City. One bill (A.5578) would prohibit the interruption of services in "would-be" interim multiple dwellings if the unit is used for residential purposes with the knowledge and consent of the owner. The other bill (A.5580) would expand the existing Loft Law to protect people who have lived in illegal lofts for a period of at least one year, from January 2000 to December 31, 2001. The bill would also extend the Loft Law to March 31, 2007. Unfortunately the Senate did not act on this legislation, leaving thousands of tenants in danger of eviction from units in which they have resided for years. The Committee will again push for agreement on this expansion in the upcoming legislative session;
• Housing Development Fund Company (HDFC) cooperative relief. Legislation (A.10328-c) was introduced to provide relief for these building owners and was signed into law as chapter 315. These distressed cooperatives had been city owned units that were turned over to tenants through the Tenant Interim Lease program and due to various factors had fallen into arrears for real estate taxes and water and sewer charges. This chapter authorizes the supervising agency to enter into a regulatory agreement with each company that owns an eligible property. Such regulatory agreement provides for the forgiveness of tax arrears, including interest and penalties provided the company complies with the terms of the regulatory agreement. Entering into these agreements will ensure that these HDFCs remain affordable to those cooperative owners currently living in these buildings and allow them to remain affordable for future owners;
• passing a rent regulation extender (A.11010) as well as a repeal of the high rent vacancy decontrol provisions of the rent regulation system (A.11011). The Assembly addressed these important issues one year early to avoid the panic and stress of a last minute extender in 2003. Unfortunately the Senate did not pass this important legislation; and
• passing a bill that would eliminate the $80,000 yearly cap on Neighborhood Preservation Companies (NPCs) and Rural Preservation Companies (RPCs) that have reached an aggregate amount of $300,000 in funding. The proposed legislation (A.1252) would potentially make more funding available to these groups, up to $100,000 annually. The Senate did not take up this bill; however, the Assembly Housing Committee will pursue this legislation again next session.

In response to the continuing threat of buildings pre-paying or "buying out" of the Mitchell-Lama program, the Assembly again passed a package of bills to protect tenants. Unfortunately, the Senate failed to respond in kind. The Committee will continue to advance this legislation in the next session.

In addition, the Committee held two public hearings. One hearing explored relief options for owners of distressed HDFC cooperatives. As mentioned above, this hearing was necessary because a group of buildings that had been affordable to tenants was in danger of returning to City ownership or third party ownership and being lost as a source of affordable housing. The second hearing was held to explore innovative financing models for "bricks and mortar" development of assisted living facilities.

Finally, the Assembly took action on numerous measures seeking to protect the rights of tenants living in multiple dwellings as well as those tenants living in condominiums and cooperatives that are undergoing conversions.

I am pleased with the many successes of the Committee and look forward to continuing our efforts in what is sure to be a difficult session ahead. I wish to extend my sincerest thanks to the members of the Committee, my staff, the staff of the Housing Committee, and to you, Mr. Speaker, for your commitment and support.

2002 ANNUAL REPORT

VITO J. LOPEZ, CHAIRMAN

Members of the Committee

1. COMMITTEE JURISDICTION AND PURVIEW

1. LEGISLATIVE HEARINGS

1. Distressed Housing Development Fund Company (HFDC) Cooperatives
2. Making the Construction of Assisted Living Facilities More Affordable

2. 2002 LEGISLATIVE HIGHLIGHTS

1. PUBLIC AUTHORITIES

1. Reauthorizing the State of New York Mortgage Agency
2. Increasing HFA's Authority to Finance Affordable Housing
3. Changing the Definition of "Rehabilitation Loan"
4. Extending Property Tax Exemptions
5. Including Second Liens in Definition of "Mortgage"

2. MANUFACTURED HOMES

1. Preventing Fee Increases in Leases
2. Establishing Rights for Manufactured Home Park Residents

3. DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT (HPD)

1. Allowing the Continuation of Rent Restructuring
2. Enabling Rehabilitation of Affordable Housing
3. Continuing Rent Restructuring in Multiple Dwellings
4. Providing Tax Exemption for Federal Foreclosures

4. PUBLIC HOUSING

1. Permitting the Restructuring of "Kennedy Towers"
2. Restructuring the Middletown and North Tonawanda Housing Projects
3. Establishing the Village of Elbridge Housing Authority
4. Establishing Southampton Town Housing Authority
5. Expanding the Rights of Public Housing Tenants

5. NEIGHBORHOOD AND RURAL PRESERVATION PROGRAM

1. Raising NPC/RPC Annual Caps
2. Eliminating Aggregate Contract Amounts

6. COOPERATIVES AND CONDOMINIUMS 12

1. Creating an Amnesty Program for Housing Development Fund Company Cooperatives
2. Protecting Tenants During Conversions
3. Ensuring Compliance with Zoning, Building, and Health Laws
4. Preventing Senior Citizen Evictions in Coop/Condo Conversions
5. Terminating Self-Dealing Contracts
6. Enlarging the Definition of Eligible Senior Citizen and Disabled Person
7. Opening Meetings to Unit Owners

7. MITCHELL-LAMA HOUSING

1. Ensuring Early Notification of Mitchell-Lama Buy-Outs
2. Protecting Mitchell-Lama Tenants from Drastic Rent Increases
3. Guaranteeing Services and Safe Living Conditions
4. Safeguarding New York State's Mitchell-Lama Housing
5. Accommodating the Supervision of Elections
6. Protecting Housing Provisions for Artists

8. LOFT LAW

1. Extending Loft Law
2. Insuring Continuation of Services
3. Continuing Loft Law Protections
4. Expanding Loft Law Coverage

9. RENT REGULATION

1. Restricting Amounts of Security Deposits
2. Continuing Rent Control, Stabilization, and Regulation
3. Extending Vacancy Decontrol
4. Improving the Operations of Rent Guidelines Boards
5. Extending Rent Regulations to Section 8 Tenants
6. Urstadt Law Repeal
7. Reforming Major Capital Improvement Rent Increases
8. Preventing the Eviction of Victims of Domestic Violence

10. ADDITIONAL TENANT PROTECTIONS

1. Requiring Exit Accessibility to be Indicated

3. 2002 BUDGET HIGHLIGHTS

1. HOUSING PROGRAM FUNDING

4. OUTLOOK FOR 2003

APPENDICES

Appendix A: 2002 Summary Sheet

Appendix B: Bills Passed by the Assembly

Appendix C: Bills Signed By The Governor

The New York State Assembly Committee on Housing is composed of 28 members (20 majority members and 8 minority members).

The Committee is responsible for legislation concerning housing development and preservation. Its purview also includes jurisdiction over rent regulation as well as all legislation that amends the following volumes of the New York State Consolidated Laws:

• Multiple Dwelling Law, which encompasses health and safety standards for buildings with three or more families living independently of each other in New York City and Buffalo;
• Multiple Residence Law, which covers health and safety standards for buildings with three or more families living independently of each other in all localities other than New York City and Buffalo;
• Private Housing Finance Law, which governs the following State programs: Mitchell-Lama, Limited Dividend Companies, Redevelopment Companies, Housing Trust Fund, Affordable Home Ownership Development, Turnkey, Permanent Housing for Homeless Families, Infrastructure Development Demonstration, Mobile Home Cooperative Fund, Housing Development Fund, Neighborhood Preservation, Rural Preservation, Rural Area Revitalization, Rural Rental Assistance, Special Needs Housing, Urban Initiatives, Permanent Housing for Homeless Families, several New York City programs, and the administration of the State Housing Finance Agency and New York City Housing Development Corporation; and,
• Public Housing Law, which covers the safety, management, and financing of local public housing authorities throughout the State.

In addition to bills regarding these laws, the Committee has jurisdiction over legislation amending those sections of the Unconsolidated Laws that constitute the Emergency Housing Rent Control Law; the Local Emergency Housing Rent Control Law; the New York City Rent Stabilization Law; the Emergency Tenant Protection Act of 1974; sections of the New York City Administrative Code and the City of Buffalo Administrative Code; sections of the General Business Law that relate to the conversion of real property from rental to cooperative (co-op) or condominium (condo) status; and, sections of the Executive Law, Real Property Law, Real Property Actions and Proceedings Law, and the Public Authorities Law.

1. LEGISLATIVE HEARINGS

1. Distressed Housing Development Fund Company (HDFC) Cooperatives

On March 21, the Assembly held a hearing in New York City to discuss relief options for owners of distressed HDFC cooperatives. This hearing was necessary because a group of buildings that had been affordable to tenants was in danger of returning to City ownership or third party ownership and being lost as a source of affordable housing.

As part of New York City Housing Preservation and Development's (HPD) effort to reduce the city owned housing stock, HPD had sold over 800 buildings to tenant cooperatives through the Tenant Interim Lease (TIL) program. These cooperatives were established as housing development fund companies. Some of these buildings had fallen into arrears for real estate taxes and water and sewer charges. Once arrears develop, interest charges accumulate rapidly and some buildings could not pay their taxes and fees and were thus termed "distressed." The committee heard from numerous cooperative owners and owner organizations who outlined the extent and consequences of this problem. Relief options for these cooperatives and ways to avoid their return to city ownership were explored.

Legislation (A.10328-c) was introduced to provide relief for these building owners and was signed into law as chapter 315 (see page 12 below). The chapter authorizes the supervising agency to enter into a regulatory agreement with each company that owns an eligible property. Such regulatory agreement provides for the forgiveness of tax arrears, including interest and penalties, provided the company complies with the terms of the regulatory agreement.

2. Making the Construction of Assisted Living Facilities More Affordable

Another hearing was held on August 12 to explore innovative financing models for "bricks and mortar" development of assisted living facilities. Assisted living facilities are a less expensive alternative to nursing homes when seniors are healthy yet need assistance with daily activities. However, developers need workable models for financing the construction of assisted living facilities. This hearing explored ways developers can access existing low cost construction financing and ways that funding streams that are available to private housing developers could be adapted to be more useful to developers of assisted living facilities. The goal is to reduce debt service payments on the building, which in turn could reduce monthly rental charges.

Several developers and non-profit organizations testified to the need for more affordable assisted living centers and shared some methods for their development. The committee is looking forward to working with these developers and non- profit groups to create usable models for developing facilities to meet the growing need.

1. PUBLIC AUTHORITIES

1. Reauthorizing the State of New York Mortgage Agency

A.11511 Rules (Robinson); Chapter 103 of the Laws of 2002

This chapter amends Section 2407 of the Public Authorities Law to increase SONYMA's tax-exempt bonding authority to a total of $6.895 billion, an increase of $250 million. This increase is expected to provide SONYMA with sufficient bonding authority to cover its activities for the next year. In addition, this chapter extends SONYMA's authority to purchase mortgages and issue tax-exempt bonds until July 16, 2003, and extends the Agency's authority to issue taxable bonds until July 16, 2003.

2. Increasing HFA's Authority to Finance Affordable Housing

A.10408 (Lopez); Chapter 48 of the Laws of 2002

The New York State Housing Finance Agency (HFA) was created as a public benefit corporation in 1960 to finance the development of low income housing by providing low-cost mortgage loans to both for-profit and not-for-profit developers. In its 40 year history, the Agency has issued more than $3 billion in bonds used to finance affordable housing developments. These developments include multi-family rental housing, senior housing, staff housing for educational and medical institutions, congregate care facilities, adult homes and other special needs housing.

This chapter increases HFA's tax-exempt bonding authority by $850 million from $5.63 billion to $6.48 billion. This increase will enable HFA to continue to meet the demand for below market financing among both for-profit and not-for-profit housing developers for another year.

3. Changing the Definition of "Rehabilitation Loan"

A.11600 Rules (Lopez); Chapter 172 of the Laws of 2002

This chapter changes the definition of "rehabilitation loan" within the Mortgage Insurance Fund by decreasing the percentage of the loan that must be used for the cost of rehabilitation from twenty-five percent to twenty percent.

4. Extending Property Tax Exemptions

A.656 (Brodsky); Passed Assembly

This bill would authorize municipalities to enter into contracts with redevelopment companies to exempt the real property of such companies from local and municipal real property taxes for a term commensurate with the term of the mortgage on such property made by the New York State Housing Finance Agency (HFA) instead of the current term of 25 years.

5. Including Second Liens in Definition of "Mortgage"

A.11543 Rules (Lopez); Passed Assembly

This bill would authorize SONYMA to purchase second mortgage loans to provide borrowers of SONYMA first mortgage loans with down payment and/or closing cost assistance under certain limited circumstances, and to insure such second mortgage loans.

2. MANUFACTURED HOMES

Manufactured homes serve as a primary residence for more than 195,000 people living in more than 2,090 manufactured housing communities throughout the State. Counties with the highest concentration (75 or more) of these communities include Saratoga, Dutchess, Ulster, Oneida, and Oswego, while those with the lowest concentration (five or less) include Westchester, Nassau, Schenectady, and Hamilton.

Since manufactured home owners usually own their homes but not the land on which they are placed, these owners are faced with a number of unique problems. First, the monetary investment involved in purchasing a manufactured home is substantial, with prices ranging from $9,000 to $150,000. Second, once purchased and placed in a community, a manufactured home is extremely difficult to move. Third, the cost of moving is prohibitively expensive, generally exceeding a few thousand dollars. Finally, in many areas of the State, relocating to another community is extremely difficult due to a shortage of available lots and zoning laws that restrict the placement of manufactured homes.

Given these problems, the Housing Committee reported two bills designed to assist and protect the rights of manufactured home owners. In the upcoming session, the Committee will continue to work toward enacting these important initiatives.

1. Preventing Fee Increases in Leases

A.570 (John); 3rd Reading

This bill would provide that lease offers made to manufactured home tenants list fees, charges, and assessments in force as of the date the lease offer is required to be made and would prevent the increase thereof until the expiration of the tenant's lease or after 90 days have elapsed, whichever is later. It would also provide for the pass-along of increases or decreases in charges for goods or services provided by third parties and would require that tenants without leases be charged at the same rate for fees and charges, as tenants with leases for comparable lots and services.

2. Establishing Rights for Manufactured Home Park Residents

A.4789 (John); 3rd Reading

This bill would require the owner of a manufactured home park to deliver written notice of any offer for the sale of the park to the manufactured homeowners' association stating the price, terms and conditions of such offer for sale. It would also provide that the homeowners' association would have the right of first refusal to purchase such property, and would set forth guidelines for the right of first refusal.

3. DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT (HPD)

New York City's housing needs are among the greatest in the nation. As a result, the Housing Committee works closely with New York City's Department of Housing, Preservation, and Development to ensure that those needs are met. The following are summaries of bills supported by HPD that were acted upon by the Assembly.

1. Allowing the Continuation of Rent Restructuring

A.9967 (Lopez); Chapter 118 of the Laws of 2002

This chapter extends the existing authority of the local housing agency in the City of New York to restructure rents for housing development fund companies that have purchased and are rehabilitating occupied multiple dwellings.

Many residential buildings proposed for acquisition and rehabilitation by housing development fund companies are not economically viable without a restructuring of the rents. Rent restructuring authority is essential to ensure that the rents are adequate to cover the monthly operating costs of the building and the debt service of the low-interest rehabilitation loans.

2. Enabling Rehabilitation of Affordable Housing

A.9968 (Lopez); Chapter 119 of the Laws of 2002

This chapter extends the existing authority of the local housing agency in the City of New York to establish initial rents in residential buildings that have received low-interest, municipally-financed rehabilitation loans under Article 8 of the Private Housing Finance Law.

This chapter allows the Department of Housing Preservation and Development to effectively utilize Article 8 of the Private Housing Finance Law as an essential tool for the rehabilitation of affordable housing in New York City. The extension of this authority to establish the initial rent is crucial in allowing for the payment of a building's monthly operating costs and debt service and for multiple dwellings receiving Article 8 rehabilitation loans to be preserved as affordable housing.

3. Continuing Rent Restructuring in Multiple Dwellings

A.9969 (Lopez); Chapter 120 of the Laws of 2002

This chapter extends the ability of the local housing agency in the City of New York to restructure rents in multiple dwellings that are receiving Article 8-A rehabilitation loans.

This chapter allows New York City to continue to have the ability to restructure rents for its programs that provide low-interest loans for affordable housing rehabilitation. Rent restructuring is an important tool in ensuring that monthly operating costs and debt service payments will continue to be paid, thereby preventing the abandonment of residential buildings.

4. Providing Tax Exemption for Federal Foreclosures

A.11116 Rules (Lopez); Chapter 492 of the Laws of 2002

This chapter allows real property acquired by the federal government as the result of foreclosure of a mortgage loan insured or held by the federal government to be eligible for tax exemption under Article 16 of the General Municipal Law (UDAAP).

4. PUBLIC HOUSING

The State of New York continues to play an important role in regulating and supporting the operation of public housing. Currently, over 18,000 units of State-regulated public housing are operated by 30 public housing authorities. In New York City alone, State-supervised public housing developments provide housing to over 30,000 people.

Despite the importance of these developments in the State's efforts to provide affordable housing, public housing authorities desperately need additional assistance in order to make long overdue capital improvements. However, due to the inadequate level of funding provided through the State's Public Housing Modernization program, many essential improvements and repairs continue to languish for lack of available funds. Increased funding for modernization remains one of the Committee's top priorities.

1. Permitting the Restructuring of "Kennedy Towers"

A.11602-A Rules (Canestrari); Chapter 347 of the Laws of 2002

This chapter authorizes the sale or lease of all or part of the project commonly known as "Kennedy Towers" by the Troy Housing Authority and allows an infusion of private capital to ensure the long term viability of the project.

2. Permitting the Restructuring of Specified Housing Projects

A.11641 Rules (Gunther); Chapter 417 of the Laws of 2002

This chapter authorizes the Middletown and North Tonawanda Housing Authorities to restructure housing projects to ensure their continued operation as a source of housing for persons and families of low income.

3. Establishing the Village of Elbridge Housing Authority

A.10622-A (Brown); Chapter 308 of the Laws of 2002

This chapter provides for the Village of Elbridge to establish the Village of Elbridge Housing Authority. Low cost senior citizen housing within the small community of the Village of Elbridge has become, over the years, increasingly more difficult to find. The Village government has determined that the creation of a Housing Authority will further their efforts to address the need for these specialized residential facilities.

4. Establishing Southampton Town Housing Authority

A.10028-A (Thiele); Chapter 611 of the Laws of 2002

This chapter creates the Southampton Town Housing Authority. The Town of Southampton is currently experiencing an extreme imbalance in its housing inventory. There is an acute shortage of affordable housing for working class and middle class residents. The Town of Southampton wishes to pursue a balanced housing policy whereby all types are available for all segments of the community.

5. Expanding the Rights of Public Housing Tenants

A.6314 (Wright); Passed Assembly

This bill would allow public housing tenants to conduct meetings free of charge in common areas owned by their housing authority.

5. NEIGHBORHOOD AND RURAL PRESERVATION PROGRAMS

The Neighborhood and Rural Preservation programs (NPP and RPP) provide grants to cover the administrative costs of not-for-profit community groups engaged in a variety of housing activities ranging from housing development and rehabilitation to homebuyer counseling and tenant assistance. These not-for-profits are known as neighborhood and rural preservation companies (NPCs and RPCs). Since 1990 alone, NPCs and RPCs have played an instrumental role in the creation of over 32,000 units of affordable housing. According to the New York State Division of Housing and Community Renewal, for every dollar invested in NPCs and RPCs, between $13 and $18 is leveraged from private and other public sources for affordable housing.

1. Raising NPC/RPC Annual Caps

A.1252 (Lopez); Passed Assembly

This bill would adjust the annual monetary limitation on Division of Housing and Community Renewal (DHCR) contracts with Neighborhood and Rural Preservation Companies (NPCs and RPCs) and not-for-profit corporations for housing preservation and community renewal activities. Currently there is an $80,000 annual contract cap placed on NPCs and RPCs when they reach the aggregate funding amount of $300,000. This bill would allow preservation companies to receive up to $100,000 annually.

2. Eliminating Aggregate Contract Amounts

A.9880 (Lopez); Passed Assembly

This bill would remove the current provision limiting the aggregate contract amount neighborhood and rural preservation companies may receive. The aggregate amount is currently $1.6 million; this bill would make the aggregate amount unlimited.

This bill would also remove the current provision limiting the annual contract amount neighborhood and rural preservation companies may receive after reaching an aggregate sum of $300,000.

6. COOPERATIVES AND CONDOMINIUMS

The purchase of a cooperative or condominium is viewed by many as an alternative to home ownership. However, buying a coop or condo is often a complex process requiring a substantial investment of time and money on the part of the purchaser.

Upon purchase, a co-op shareholder or condo unit-owner holds an interest in the cooperative or condominium corporation and has a tremendous stake in the management of the property. But unlike owning a home, where an individual owner has the final say as to property management decisions, an elected board has these responsibilities in a co-op or condo. Condo unit-owners elect a board of managers, while co-op shareholders elect a board of directors.

Many of the financial problems associated with cooperatives and condominiums resulted from the tremendous conversion boom that took place in the 1980s. As the economy declined, a soft real estate market hurt both the sponsors who had invested huge sums of money to convert buildings and the shareholders who had purchased shares in troubled buildings.

Because a rental building can be converted with as little as 15 percent of the tenants wishing to purchase, many sponsors converted under less than ideal financial circumstances. Trouble resulted when sponsors had difficulty selling vacant units. Unable to meet mortgage payments and sustain building services, some sponsors defaulted on bank loans, souring the investment for shareholders and placing building residents at risk.

The Assembly passed several pieces of legislation this year that would alleviate problems in the cooperative and condo housing market and protect this invaluable source of housing.

1. Creating an Amnesty Program for Housing Development Fund Company Cooperatives

A.10328-C (Lopez); Chapter 315 of the Laws of 2002

This chapter authorizes an amnesty program to provide relief, including interest and penalties, to housing development fund company cooperatives located in New York City that have fallen into arrears for real estate taxes. Providing this relief for these cooperatives would alleviate their existing financial burden and avoid the buildings' return to city ownership.

2. Protecting Tenants During Conversions

A.57 (Sanders); Passed Assembly

This bill would repeal provisions requiring the filing of eviction plans with the Attorney General in coop/condo conversions. Under this bill, only non-eviction plans would be allowed for conversions. This bill would also prohibit landlords of condominium and cooperative residential conversions from evicting tenants refusing to purchase such cooperatives or condominiums.

3. Ensuring Compliance with Zoning, Building, and Health Laws

A.381 (Kaufman); Passed Assembly

This bill would authorize the Attorney General to refuse to issue a letter stating that an offering plan has been filed unless the plan provides that all units that are being offered conform to local zoning, building, and health laws, including the terms of any certificate of occupancy issued.

4. Preventing Senior Citizen Evictions in Coop/Condo Conversions

A.675 (Sanders); Passed Assembly

This bill would protect persons sixty-two years of age or older, who are tenants of a dwelling unit located in a building located in New York City and who are threatened with eviction because their building is subject to a cooperative or condominium conversion plan. These tenants would be entitled to remain in occupancy of their dwelling unit.

5. Terminating Self-Dealing Contracts

A.4390 (Grannis); Passed Assembly

This bill would strengthen the rights of cooperative shareholders and condominium owners by requiring sponsors of conversion plans to notify tenants of their right to terminate a self-dealing contract. Self-dealing contracts are contracts for the management or maintenance of the coop or condominium between the conversion sponsor and itself or an affiliate of the sponsor.

6. Enlarging the Definition of Eligible Senior Citizen and Disabled Person

A.5873 (Brennan); Passed Assembly

This bill would expand the definition of eligible senior citizen and disabled person with respect to condominium and cooperative conversion to include any member of the tenant's household lawfully occupying the premises as his or her residence who is 62 years of age. The bill would provide protection to disabled and senior citizen non-purchasing residents of buildings that undergo cooperative or condominium conversions under an eviction plan even when such residents are not tenants of record in the buildings.

7. Opening Meetings to Unit Owners

A.7391 (Robach); Passed Assembly

This bill would require that all regular meetings of a Board of Managers of a condominium be open to all unit owners who shall be permitted to attend and listen to the deliberations and proceedings. The unit owners may not participate in any deliberations unless expressly authorized by a majority vote of a quorum of the Board of Managers.

7. MITCHELL-LAMA HOUSING

Since the 1950s, the Mitchell-Lama program has provided affordable housing to moderate-income New Yorkers. More than 400 Mitchell-Lama developments, housing approximately 150,000 families, are scattered throughout the State. The continued viability of this housing remains a critical part of New York State's effort to ensure the availability of affordable housing for each of its citizens.

Despite this, the 1999 session started with the disturbing news that the owners of three Mitchell-Lama housing complexes had started the process of pre-paying or "buying-out" their government-subsidized mortgages. "Buy-outs" can have a devastating impact on the families living in these buildings as rents may double or triple when existing leases expire.

The Assembly responded early in 1999 by passing a package of bills to protect Mitchell-Lama tenants. The Committee continued to pursue this package of legislation in 2002. Unfortunately, the Senate again failed to respond.

1. Ensuring Early Notification of Mitchell-Lama Buy-Outs

A.1255 (Lopez); Passed Assembly

This bill would require Mitchell-Lama housing companies that intend to dissolve to provide notice of such intention to all their lease holders at least six months prior to the anticipated date of dissolution. The bill specifies certain information that must be included in the required notice.

2. Protecting Mitchell-Lama Tenants from Drastic Rent Increases

A.1284 (Lopez); Passed Assembly

This bill would stabilize the rents of all Mitchell-Lama buildings first occupied after January 1, 1974, upon the completion of a "buy-out." In doing so, tenants would be protected from the dramatic rent increases that often result when buildings leave the Mitchell-Lama program. Tenants living in Mitchell-Lama buildings first occupied prior to January 1, 1974, already have this vital protection.

3. Guaranteeing Services and Safe Living Conditions

A.1434 (Kaufman); Passed Assembly

This bill would ensure the delivery of essential services (as defined) in Mitchell-Lama housing by conditioning DHCR approval of rent increase applications on the delivery of those services and the correction of any hazardous conditions that might exist.

4. Safeguarding New York State's Mitchell-Lama Housing

A.1445 (Lopez); Passed Assembly

This bill would extend from 20 years to 50 years the period of time before limited-profit housing companies may dissolve and leave the Mitchell-Lama Program. This legislation would preserve Mitchell-Lama housing as an affordable housing resource for the future.

5. Accommodating the Supervision of Elections

A.1781 (Kaufman); Passed Assembly

This bill would provide for the supervision of elections of directors of limited-profit Mitchell-Lama housing companies and would set contribution limitations for the election of directors of housing companies with 2500 or more dwelling units.

6. Protecting Housing Provisions for Artists

A.8593-A Rules(Millman); Passed Assembly

This bill would require that before a Mitchell-Lama housing company could voluntarily dissolve, it would have to fully satisfy any pre-existing legal obligations to provide housing for artists.

8. LOFT LAW

Originally passed in 1982, the Loft Law provided a mechanism for legalizing commercial lofts that had been converted into residences - many of which, because of their unique qualities and location, were occupied by artists. The law provides tenants who became residents of loft buildings in the early 1980's with protections against arbitrary evictions and rent hikes.

Currently it is estimated that in Brooklyn alone, 10,000 people live in buildings zoned for commercial or manufacturing use who are not protected by the existing Loft Law. When the Assembly became aware of the large number of tenants threatened with eviction, it developed a package of bills to address the situation. By expanding the Loft Law, the Assembly seeks to increase the number of residents who would be covered under the existing statute and to provide important tenant protections for residents whose loft apartments are not currently covered.

1. Extending Loft Law

A.9762-B (Part BB, Budget bill); Chapter 85 of the Laws of 2002

This chapter extends the existing Loft Law and its tenant protections until May 31, 2004.

2. Insuring Continuation of Services

A.5578-A (Lopez); Passed Assembly

This bill would prohibit interruption of services in "would-be" interim multiple dwellings if the unit is used for residential purposes with the knowledge and consent of the owner. Essential services that have customarily been provided may only be interrupted for repairs, which shall be performed in a reasonably expedient manner or in the case of an emergency or by order of a court or other governmental organization.

The bill would further provide that if the services have been interrupted or discontinued, the owner must restore such services for so long as residential occupancy continues.

3. Continuing Loft Law Protections

A.5579-A (Glick); Passed Assembly

This bill would extend the Loft Law until 2007. It would also provide additional oversight for interim multiple dwellings, and would provide for additional remedies for residents of such dwellings. This bill would further make additional provisions relating to the financing of such dwellings and the applicability of various provisions of the law to such dwellings.

4. Expanding Loft Law Coverage

A.5580-B (Lopez); Passed Assembly

This bill would expand the existing Loft Law to people who lived in illegal lofts for a period of at least one year, from January 2000 to January 2001. The bill would also extend the Loft Law to March 31, 2007.

9. RENT REGULATION

New York's rent regulation laws provide protection to over 2.5 million tenants throughout the State. The basis for both rent control and rent stabilization is a housing emergency, defined as a vacancy rate below five percent, that still exists in many areas of the State. Due to the existence of this emergency, government intervention is critical to protect tenants from unreasonable rent increases and evictions.

1. Restricting Amounts of Security Deposits

A.4522-A (Mayersohn); Chapter 532 of the Laws of 2002

This chapter limits to one month's rent, with respect to housing accommodations subject to the Emergency Tenant Protection Act of 1974 and rent control, the amount of any security deposit charged a tenant who is 65 years of age or older or who is disabled.

2. Continuing Rent Control, Stabilization, and Regulation

A.11010 Rules (Silver); Passed Assembly

This bill would extend various provisions of law relating to the emergency housing rent control law, rent stabilization, conversion of rental residential property and rent regulation reform act of 1997 from 2003 until 2008.

3. Extending Vacancy Decontrol

A.11011 Rules (Silver); Passed Assembly

This bill would repeal various provisions of the rent regulatory laws repealing vacancy decontrol provisions.

4. Improving the Operations of Rent Guideline Boards

A.657 (Brodsky); Passed Assembly

This bill would provide for the appointment of three alternates on rent guideline boards. Under this legislation, one of the alternates would be a representative of tenants, another would represent owners, and the third would be a public representative. Alternates would be permitted to participate in all proceedings of the board as non-voting members and would participate as voting members when a member representing the same interest as the alternate is unable to fulfill his or her duties.

5. Extending Rent Regulations to Section 8 Tenants

A.1281 (Lopez); Passed Assembly

This bill would extend rent and eviction protections, pursuant to the Emergency Tenant Protection Act of 1974, to tenants living in former Section 8 projects.

6. Urstadt Law Repeal

A.1307 (Lopez); Passed Assembly

This bill would amend the Local Emergency Housing Rent Control Act by removing the provision that prohibits cities of one million or more from strengthening rent regulation laws to provide more comprehensive coverage than provided by state laws.

7. Reforming Major Capital Improvement Rent Increases

A.2641-A (Sanders); Passed Assembly

This bill would reform the method by which owners of rent regulated buildings are compensated for major capital improvements (MCIs). In addition to improving the methodology for determining MCI rent increases, this bill would require that rent increases associated with MCIs be treated as a surcharge that would not become part of the legal regulated rent by which annual rent increases are calculated. This bill would also require that rent surcharges authorized for major capital improvements cease once the cost of the improvement has been recovered.

8. Preventing the Eviction of Victims of Domestic Violence

A.7747 (Weinstein); Passed Assembly

This bill would prevent owners from evicting tenants who are forced to flee their rent regulated units to escape domestic violence. Specifically, this legislation provides that victims of domestic violence, as defined by Section 459-A of the Social Services Law, would be deemed to occupy their rent-regulated unit as their primary residence if they have been forced to leave the unit because of such violence and if they assert an intent to return.

10. ADDITIONAL TENANT PROTECTIONS

1. Requiring Exit Accessibility to be Indicated

A.668 (Kaufman); Passed Assembly

This bill would require exits to be clearly marked as to whether they are accessible by the handicapped in case of emergency. This bill would also require certain hotels and motels to develop a plan for the evacuation of persons with disabilities in case of fire and would require the New York State Uniform Fire Prevention and Building Code to include provisions relating thereto.

III.   2002 BUDGET HIGHLIGHTS

EXISTING PROGRAMS

Under this program, a state tax credit augments the federal Low Income Housing Tax Credit by providing funds for the construction of affordable housing through the syndication of tax credits. Similar programs have proven to be highly successful in leveraging private dollars to create affordable housing.

NPP and RPP provide grants to cover the administrative costs of not-for-profits engaged in a variety of affordable housing activities. According to the Division of Housing and Community Renewal, for every dollar the State invests in NPP and RPP, between $13 and $18 is leveraged for affordable housing from other public and private sources.

The Governor had originally proposed $11.06 million for NPP, a decrease of $2.19 million, and $4.76 million for RPP, a decrease of $190,000, from SFY 2001. The Assembly was successful in adding $1.5 million to the Neighborhood Preservation program for a total appropriation of $12.56 million, and supported the addition of $500,000 to the Rural Preservation Program for a total appropriation of $5.26 million. This additional funding is dedicated to boosting awards for groups with proven records of accomplishment, as well as to fund new groups in presently under-served areas.

In addition, the legislature increased the aggregate cap for the Neighborhood and Rural Preservation Program from $1.6 million to $1.68 million, an increase of $80,000.

The Homes for Working Families program uses a combination of tax-exempt bonds, low-interest loans from the State, and federal Low Income Housing Tax Credits to finance the development of housing for households earning between 50% and 60% of median income. By providing developers a vehicle to access otherwise unused federal 4% Housing Tax Credits, Homes for Working Families offers an opportunity to produce high quality, affordable housing at a lower cost for New York State's taxpayers. The $7 million enacted represents no change from last year's budget.

This program provides grants and loans of up to $20,000 per unit (plus an additional $5,000 in high-cost areas) for rehabilitation and new construction of one-to four-family dwellings for middle-income New Yorkers. This represents no change from SFY 2001.

This program provides grants for emergency transitional and permanent housing for the homeless through acquisition, construction, and rehabilitation. This year's budget appropriation is the same level as was enacted last year for the development of permanent, emergency, or transitional housing for homeless persons. The $30 million appropriation includes $5 million to be set aside for the Homeless Persons With AIDS Program.

This program provides funding to modernize state-aided public housing projects and to address structural problems that threaten the safety of tenants. The Executive did not propose any increased funding for this vital program.

This program provides grants of up to $5,000 to low-income elderly homeowners in one-to-four family homes to correct conditions that threaten their lives, health, or safety and that would otherwise force them from their homes. As such, HOPE grants enable older New Yorkers to maintain their independence and avoid more costly housing alternatives. Funding for HOPE/RESTORE remained level from last year's budget.

The Trust Fund provides funding to not-for-profits, localities, and private developers for the construction or rehabilitation of rental housing that is affordable to low-income households. Funding for this program is maintained at the level enacted for the FY 2000-01 budget.

This demonstration program provides funding to eligible not-for-profits to help them identify lead paint risks, educate and relocate families/individuals impacted by lead poisoning, and assist in abatement activities. The Assembly added this appropriation after the Governor failed to include an appropriation in his budget proposal.

The challenge of providing safe and affordable housing in New York State is more tremendous than ever given the looming budget shortfall. The Committee seeks to achieve this goal by developing policies that leverage private resources, encourage individual home ownership, and lead to the creation of new housing opportunities. Despite the ever-increasing demands on state resources, the Assembly's commitment to housing remains strong.

One of the top priorities for the Housing Committee in the upcoming session will be the extension of the Rent Regulation system beyond its sunset date of June 15, 2003. Protecting tenants who currently reside in rent regulated units is an important piece in the affordable housing puzzle. Thus, the Committee will seek not only to extend the existing law but also to stop the erosion of the system through vacancy decontrol. Losing these affordable units would be a tremendous loss and therefore the Committee is committed to preserving the existing rent regulation system.

The Committee will also focus on continuing the Service Contract Obligation Revenue (SCOR) Bond program to ensure an uninterrupted flow of state resources to affordable housing development. Since 1991, the SCOR Bond program has financed the rehabilitation and/or construction of over $1 billion of affordable housing throughout New York State.

Another priority for the Committee is to ensure that both the Housing Finance Agency (HFA) and the State of New York Mortgage Agency (SONYMA) have sufficient funds available to them so that they may continue to finance affordable housing throughout New York State.

Protecting all loft tenants is also a priority for the upcoming session. Although the Assembly was successful in extending existing loft protections for another two years this session, the Committee will again seek to expand the existing Loft Law. Unprotected loft tenants in Brooklyn, Manhattan, and other areas of New York City who are not covered because they were not in residence by the date required under the Multiple Dwelling Law deserve equal protections as existing loft tenants.

In addition, the Committee will continue to seek the establishment of a revolving loan fund to help working families purchase and rehabilitate homes. Many of these families can currently afford monthly mortgage payments, but are unable to buy a home due to high down payment and closing costs. By assisting families with these costs, as well as the cost of necessary repairs, this initiative could make the dream of owning a home a reality for thousands of New Yorkers.

Finally, the Committee will fight to ensure that the State budget provides adequate funding to assist in the development of affordable housing, the rehabilitation of existing units, and the expansion of housing opportunities for the homeless, the elderly, and those with special needs.

I look forward to my eleventh year as chairman with enthusiasm and will make every effort to uphold the Assembly's commitment to quality, affordable housing for all of New York State's citizens.

2002 Summary Sheet
Summary of Action on all Bills Referred to the Committee On Housing

Bills That Passed the Assembly

Would remove the current provision limiting the aggregate contract amount neighborhood and rural preservation companies may receive. The aggregate amount is currently $1.6 million; this bill would make the aggregate amount unlimited.

Would also remove the current provision limiting the annual contract amount neighborhood and rural preservation companies may receive after reaching an aggregate sum of $300,000.

Bills Signed By The Governor