Requires the commissioner of housing and community renewal, or the appropriate supervising agency, to review contracts for $50,000 or more entered into by a limited-profit housing company.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2741REVISED 4/17/25
SPONSOR: Rosenthal TITLE OF BILL:
An act to amend the private housing finance law, in relation to review
of certain contracts of limited-profit housing companies
PURPOSE OR GENERAL IDEA OF BILL:
This bill provides for greater oversight of procurement policies for
Mitchell-Lama developments to ensure prudent spending and guard against
fraud.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends section 32-a of the executive law by adding a new
subdivision 15 and 16.
Section two establishes the effective date.
JUSTIFICATION:
Ensuring that Mitchell-Lama housing developments adhere to best prac-
tices throughout the procurement process on contracts is an essential
step in curtailing potential corruption and wasteful spending.
In a 2024 audit spanning 2019-2024 conducted by the New York State Comp-
troller's office, multiple Mitchell-Lama housing complexes were found to
have engaged in questionable spending. A sampling of various contracts
from three developments showed that contracts for $620,000 either had no
approval from HPD or showed no evidence of competitive bidding. This
audit underscores the clear need for a standardized process that allows
for contracts to be thoroughly reviewed before they are signed. Given
the current housing crisis, it is imperative that the state and city
demonstrate a commitment to maintaining the legitimacy of affordable
housing and restoring the public's faith in government subsidized hous-
ing.
This legislation would provide much-needed oversight in the bidding
process by mandating the New York State Department of Housing and Commu-
nity Renewal and the New York City Department of Housing Preservation
and Development to review bids on contracts and goods worth over
$50,000. Right now, those agencies only review bids for contracts over
$100,000. The legislation also requires explanations for the necessity
of closed bids when a development is procuring materials and necessitat-
ing documentation on methods of procurement and responsible parties.
Additionally, this legislation would require comprehensive training for
board members on local laws, potential criminal liabilities, and the
types of conduct that would constitute gratuities and bribes to ensure
all boards are operating under the same level of knowledge
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
90 days.
