Add Art 15 §§625 - 649, Pub Hous L; amd §§13-101 & 13-133, NYC Ad Cd
Establishes the New York city public housing preservation trust for properties owned or operated by the New York city housing authority; provides for the issuance of certain bonds, notes or other obligations of the New York city housing development corporation.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7805D
SPONSOR: Cymbrowitz TITLE OF BILL:
An act to amend the public housing law and the administrative code of
the city of New York, in relation to establishing the New York city
public housing preservation trust for properties owned or operated by
the New York city housing authority and providing for the issuance of
certain bonds, notes or other obligations of the New York city housing
development corporation
PURPOSE:
To establish the New York City Public Housing Preservation Trust to
facilitate capital and operational financial inflows to rehabilitate and
maintain 25,000 New York City Public Housing Authority homes.
SUMMARY OF PROVISIONS:
This bill is a program bill submitted by the City of New York on behalf
of the New York City Housing Authority.
Section one of the bill amends the Public Housing Law by adding a new
article 15, with new sections 625 through 649 establishing the New York
City Public Housing Preservation Trust (the "Trust").
Sections 625, 626, 627, 648, and 649 set forth the short title for the
article, legislative findings, applicable definitions, provisions clari-
fying the effect of inconsistent provisions in other laws, and a severa-
bility clause.
Section 626 states the legislature's findings that a new public entity,
which can access additional subsidies and more effectively manage the
rehabilitation of properties, must be established to repair, modernize,
and improve New York City Housing Authority ("NYCHA") buildings. Section
626 also states the legislature's understanding and intention that any
building transferred to the Trust and operated by NYCHA shall continue
to be subject to the obligations imposed by Maribel Baez et al. v. New
York City Housing Authority, No. 13-Civ-8916.
Sections 628 and 629 establish the Trust as a public entity, specif-
ically a public benefit corporation. These sections also include
provisions relating to the composition of the Trust's board of trustees
and the appointment of officers, as well as the powers and duties of the
Trust.
Section 630 sets forth the procedure by which NYCHA, subject to the
approval of the U.S. Department of Housing and Urban Development, may
transfer a leasehold interest in its housing facilities and other
personal property of such facilities to the Trust. This procedure
includes an opportunity for residents at a particular housing facility
to vote on the options for modernization at that particular housing
facility. A provision setting forth an explicit exemption from City land
use and other approvals was not included because it would generally be
redundant, given that the Trust would not be a City agency and would be
largely utilizing NYCHA property. Development on such property in most
instances would not be subject to such approvals.
Section 631 provides, that the protections afforded to residents of the
housing facilities will be consistent with those afforded to public
housing residents, to the extent permitted under federal law. Such
protections will include: (i) preserving the affordable character of the
housing facilities; (ii) ensuring that residents required to relocate
during rehabilitation may return to the housing facility; (iii) provid-
ing residents the opportunity to establish and operate councils to
represent them; (iv) providing a resident the opportunity for an
informal hearing to grieve actions of the Trust with respect to such
resident's lease; (v) providing automatic lease renewal except for good
cause as specified in a lease between such resident and the Trust; (vi)
determining succession rights to a lease between a resident and the
Trust and to a voucher issued pursuant to Section 8 of the United States
Housing Act of 1937, as amended; and (vii) permitting an over-income
resident to remain in the housing facility and pay rent in an amount to
be determined by the Trust and NYCHA and specified in the lease. The
Trust is also required to ensure, to the greatest extent feasible and
consistent with federal law and regulations, that employment and econom-
ic opportunities are directed to residents of the housing facilities.
Section 631 further provides that the Trust shall act in accordance with
the full requirements of Part 964 of Title 24 of the Code of Federal
Regulations or any successor regulations. In addition, Section 631
provides the Trust ensures residents participate in the process to
procure vendors performing, capital renovation, modernization, and
construction work.
Sections 633 through 636 establish the procurement procedures for the
Trust and authorize the Trust to use alternative project delivery meth-
ods in procuring its work, including using the design build,
construction manager build ("CM Build"), and construction manager at
risk ("CHAR") project delivery methods. These provisions clarify that
the progressive design build, CM Build, and CHAR project delivery meth-
ods may also be used by the Trust, and establish a procedure for the use
of such methods.
Section 637 authorizes the Trust to issue bonds, notes, or other obli-
gations, subject to the approval of the director of New York City's
Office of Management and Budget (OMB), and to pledge any part of its
revenues to secure the payment of its bonds. Section 638 also authorizes
the New York City Housing Development Corporation ("NYCHDC") to issue
bonds on behalf of the Trust and to make loans to the Trust and related
entities with the proceeds of such bonds (which will not be subject to
NYCHDC's current limitations on outstanding bonds and certain other
statutory provisions-applicable to NYCHDC's bonds issued for other
purposes). In addition, section 638 gives New York City and New York
State the right to remedy, or cause to be remedied, a default on any
bond, note, or other obligation of the Trust continuing beyond an appli-
cable cure period.
Sections 638 through 640 authorize the Trust to accept funds from any
source and to securitize such funds for the purposes of raising capital
for the development, rehabilitation, and operation of housing facilities
and exempt the Trust and any funds it raises from taxation.
Section 641 sets forth a procedure for commencing certain suits for
personal injury or damage to personal property against the Trust, and
section 645 sets forth the Trust's obligations to defend and indemnify
its employees, president, officers and board members.
Sections 642 and 643 provide that the Trust is subject to the Civil
Service Law and the rules of the Department of Citywide Administrative
Services in connection with civil service matters, protect the civil
service rights of current NYCHA employees who may be transferred to the
Trust, and set forth the Trust's obligations with respect to collective
bargaining.
Section 647 provides that the Trust is not a "covered organization"
under the New York State Financial Emergency Act and is neither a "local
authority" nor a "state authority" under the Public Authorities Account-
ability Act, but is subject to investigation by the City's Department of
Investigation and to audit by the City. Comptroller. Section 644
provides that the Trust is subject to the state and city human rights
laws and, under section 632, the Trust is subject to applicable sanitary
and building laws and regulations.
Sections two and three of the bill amend sections 13-101 and 13-133 of
the New York City Administrative Code to provide that employment by the
Trust is considered City service for purposes of participation in the
New York City Employees' Retirement System (NYCERS), and to require the
Trust to make monthly payments to NYCERS to satisfy its pension obli-
gations.
Section four of the bill sets forth the effective date.
JUSTIFICATION:
NYCHA's public housing facilities are deteriorating as a result of
decades of diminishing investment in capital and operating expenses.
Recent assessments indicate that the housing facilities' capital needs
have reached $40 billion-on average, over $200,000 per unit-and it is
clear that NYCHA's housing facilities require significant capital
investment to design, develop, construct, reconstruct, improve, modern-
ize, rehabilitate, and repair these aging buildings. These capital
needs include costs to address numerous core safety issues-such as mold,
lead, heat, pests, and elevators-that are critical to the wellbeing of
NYCHA residents. Each of these scope areas requires an immense level of
funding: for example, at 110,000 apartments, fully addressing mold
conditions is estimated to cost roughly $9.5 billion and rehabilitating
heating systems is estimated to cost over $4 billion. without an immedi-
ate injection of capital funding-and an effective means of completing
major renovations-the buildings will continue to deteriorate over time,
which will worsen conditions for residents of the housing facilities and
increase the amount of funding required to fully rehabilitate the build-
ings by billions of dollars over the next five years.
This bill would allow the Trust, a new public entity, to access a more
valuable funding stream than the federal subsidy currently available to
the housing facilities and to leverage that funding stream to finance
infrastructure-level rehabilitation of the housing facilities. NYCHA and
the Trust would be permitted to pursue this approach for up to 25,000
apartments-a limit not included in previous versions of the proposal.
The repairs not only would improve the physical integrity of the infras-
tructure, but also would result in a return on investment in the form of
energy consumption reduction, utility savings, and savings on emergency
maintenance. In addition, the bill would facilitate job creation and
improve environmental health, while preserving the permanently afforda-
ble character of the housing. The Trust would also create significant
economic activity through this unprecedented investment, which would
help the City and state recover from the economic and health crises
brought on by the COVID-19 pandemic.
This bill would also grant the Trust the flexibility to utilize innova-
tive project delivery methods to accomplish these goals. The Trust's
flexibility in leveraging capital investment and in managing the reha-
bilitation of these' properties would result in renovations and repairs
on a much faster timeline than NYCHA residents could expect from the
methods available to NYCHA at present. Beyond the physical repairs to
NYCHA's housing facilities, this bill is intended to make it possible to
provide affordable homes that are decent, safe, and sanitary for thou-
sands of New Yorkers.
LEGISLATIVE HISTORY:
A.11149 of 2020
FISCAL IMPLICATIONS FOR STATE:
None.
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law, provided that any public officer or employee, including
but not limited to the mayor of the city of New York and the chief exec-
utive officer of the New York city housing authority, is authorized to
take any action that is necessary for the timely implementation of this
act prior to its effective date.
