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A02633 Summary:

BILL NOA02633
 
SAME ASSAME AS S06492
 
SPONSORThiele
 
COSPNSR
 
MLTSPNSR
 
Add 64-k, Town L; amd 1449-bb & 1449-ee, Tax L
 
Authorizes towns in the Peconic Bay region to establish community housing funds to be funded by a supplemental real estate transfer tax.
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A02633 Actions:

BILL NOA02633
 
01/19/2021referred to local governments
02/24/2021reported referred to ways and means
05/19/2021reported referred to rules
05/24/2021reported
05/24/2021rules report cal.85
05/24/2021ordered to third reading rules cal.85
05/24/2021passed assembly
05/24/2021delivered to senate
05/24/2021REFERRED TO LOCAL GOVERNMENT
06/10/2021SUBSTITUTED FOR S6492
06/10/20213RD READING CAL.1747
06/10/2021PASSED SENATE
06/10/2021RETURNED TO ASSEMBLY
09/28/2021delivered to governor
10/08/2021signed chap.445
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A02633 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          2633
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 19, 2021
                                       ___________
 
        Introduced by M. of A. THIELE -- 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 an
     2  adequate supply of housing opportunities for all segments of the Peconic
     3  Bay community is critical to the future of the Peconic Bay region.
     4    The adverse impact resulting from the lack of housing opportunities is
     5  severe. Local employers have difficulty hiring and  retaining  employees
     6  because  of  housing  costs  and availability. Local volunteer emergency
     7  services agencies experience difficulty in  recruitment  and  retention.
     8  Long-time residents are forced to leave the area.  Traffic congestion is
     9  intensified  by  the  importation of labor from areas with lower housing
    10  costs.  Finally, the lack of housing opportunities is resulting in resi-
    11  dents being forced to live in substandard, illegal conditions.
    12    The unique demographics and economics in the Peconic Bay region and  a
    13  lack of affordable dwelling units are contributing to this housing shor-
    14  tage.  The combination of the Peconic Bay region's attractiveness, prox-
    15  imity to the dense population of the New York metropolitan region and to
    16  that region's extraordinary wealth, makes the Peconic Bay region a prime
    17  location  for  seasonal  and  luxury  homes.  While  this combination of
    18  extraordinary attractiveness, population density, and wealth has created
    19  a strong local economy for the Peconic Bay region, it has resulted in  a
    20  housing  crisis  for local families.   The demand for seasonal homes has
    21  driven up housing costs for local families. In the Peconic  Bay  region,
    22  more than 40% of all housing units are seasonal.
    23    The  unique  demographics and economics in the Peconic Bay region that
    24  have historically contributed to the housing  shortage  have  only  been
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03098-01-1

        A. 2633                             2
 
     1  exacerbated  by  the COVID-19 pandemic.   The pandemic has resulted in a
     2  flight of residents from urban areas such as New York City to more rural
     3  areas such as the Peconic Bay region. The  demand  for  housing  in  the
     4  region  is  currently  at  an  all-time  high. This increased demand has
     5  further driven up housing costs and has reduced the  supply  of  housing
     6  units  available  for  the  local  workforce.   The increased demand for
     7  affordable housing opportunities resulting from the pandemic  makes  the
     8  need for increased community housing more acute.
     9    In  summary,  the  demand  of  land  for luxury and seasonal homes and
    10  seasonal rentals has left a short supply of  housing  opportunities  for
    11  moderate income and working class local residents. The pandemic has only
    12  exacerbated  this  problem.  The  Peconic Bay region requires a balanced
    13  housing policy where there exists a variety of housing types and  oppor-
    14  tunities across the region's economic spectrum.
    15    It  is the public purpose of this legislation to give the towns of the
    16  Peconic Bay region the authority and resources  needed  to  establish  a
    17  dedicated  fund  to  provide needed housing opportunities. Specifically,
    18  this legislation would permit each town to establish a community housing
    19  fund to increase housing opportunities in the region.  Further,  a  town
    20  housing plan adhering to smart growth principles would be required to be
    21  approved  and implemented to ensure that these new housing opportunities
    22  are enacted in the context of a comprehensive plan.
    23    Said fund would be financed by a combination of state and local funds,
    24  including a 0.5% supplemental real estate transfer tax, which  would  be
    25  in  addition to the existing 2% real estate transfer tax for the Peconic
    26  Bay region community preservation fund.   The supplemental  real  estate
    27  transfer shall be enacted by a local law subject to a mandatory referen-
    28  dum.
    29    In  addition  to  the  authorization  of  the supplemental real estate
    30  transfer tax, the exemption amounts from the entire real estate transfer
    31  tax would be increased to $400,000 in the  towns  of  Southampton,  East
    32  Hampton and Shelter Island and to $200,000 in the towns of Riverhead and
    33  Southold.  This will insure that in the towns of East Hampton, Southamp-
    34  ton, and Shelter Island, the real estate transfer  tax  burden  will  be
    35  reduced  for  property  transfers with a consideration under $1,000,000.
    36  The real estate transfer tax would be reduced in the towns  of  Southold
    37  and   Riverhead  for  property  transfers  with  a  consideration  under
    38  $400,000.
    39    Finally, the purchase price limit for the  exemption  for  first  time
    40  homebuyers  in the towns of East Hampton, Southampton and Shelter Island
    41  would be increased from 120% to 150% of  the  purchase  price  limit  as
    42  defined  by  the  state of New York mortgage agency. These amendments to
    43  the exemptions will mitigate any adverse impact from the transfer tax on
    44  the provision of community housing.
    45    § 2. This act shall be known and may be  cited  as  the  "Peconic  Bay
    46  region community housing act".
    47    §  3.  The town law is amended by adding a new section 64-k to read as
    48  follows:
    49    § 64-k. Peconic Bay region community housing fund. 1. Definitions.  As
    50  used  in  this  section,  the  following  words and terms shall have the
    51  following meanings:
    52    (a) "Peconic Bay region" means the towns of East  Hampton,  Riverhead,
    53  Shelter Island, Southampton, and Southold.
    54    (b)  "Community  housing"  means a primary residential property for an
    55  eligible individual that does not exceed one hundred  fifty  percent  of
    56  the  purchase price limits established by the state of New York mortgage

        A. 2633                             3

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

        A. 2633                             4

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

        A. 2633                             5
 
     1  subdivision seven of this section, the board shall include at least  one
     2  resident of a participating village or villages.  Where an Indian nation
     3  is  located  within the boundaries of a town, the board shall include at
     4  least  one  member  from such nation. The board shall act in an advisory
     5  capacity to the town board.
     6    7. Adoption of housing plan. (a) Before a  town  in  the  Peconic  Bay
     7  region  may  expend  any  funds pursuant to this section, the town board
     8  shall first adopt a town housing plan which establishes  an  implementa-
     9  tion  plan  for  the provision of community housing opportunities by the
    10  fund. Said plan shall be adopted by local law. Such plan shall adhere to
    11  the following smart growth principles:
    12    (1) Public investment. To account for and minimize  social,  economic,
    13  and  environmental  costs  of  new development, including infrastructure
    14  costs such as transportation, sewers, and wastewater  treatment,  water,
    15  schools, recreation, and loss of open space and agricultural land;
    16    (2)  Development.  To encourage development in areas where transporta-
    17  tion, water, and sewage infrastructure are available or practical;
    18    (3) Conservation.  To  protect,  preserve,  and  enhance  the  state's
    19  resources, including agricultural land, forests, surface waters, ground-
    20  water, recreation and open space, scenic areas, and significant historic
    21  and archeological sites;
    22    (4)  Coordination.  To promote coordination of state and local govern-
    23  ment decisions and cooperation among communities to work toward the most
    24  efficient, planned and cost-effective delivery  of  government  services
    25  by,  among  other means, facilitating cooperative agreements among adja-
    26  cent communities, and to coordinate planning to ensure compatibility  of
    27  one's community development with development of neighboring communities;
    28    (5)  Community  design.  To strengthen communities through development
    29  and redevelopment strategies that include integration of all income  and
    30  age groups, mixed land uses, and compact development, traditional neigh-
    31  borhood  development,  planned  unit  development, open space districts,
    32  downtown revitalization, brownfield redevelopment,  enhanced  beauty  in
    33  public  spaces,  and diverse and community housing in close proximity to
    34  places of employment, recreation, and commercial development;
    35    (6)  Transportation.  To  provide  transportation  choices,  including
    36  increasing  public  transit  and alternative modes of transportation, in
    37  order to reduce automobile dependency, traffic congestion,  and  automo-
    38  bile pollution;
    39    (7)  Consistency.  To  ensure  predictability in building and land use
    40  codes; and
    41    (8) Community  collaboration.  To  provide  for  and  encourage  local
    42  governments  to develop, through a collaborative community-based effort,
    43  smart growth plans that include long term land use and  permit  predict-
    44  ability  and coordination, efficient decision making and planning imple-
    45  mentation.
    46    (b) Such plan may include the establishment of  a  map  or  maps  that
    47  delineate  the  housing  implementation  recommendations proposed by the
    48  town.
    49    (c) Such plan shall be updated at least once every five years.
    50    (d) The town housing plan shall be an element of the town's comprehen-
    51  sive plan.
    52    (e) Such plan shall ensure that all community housing created pursuant
    53  to this section remains affordable. Subsequent purchasers of such commu-
    54  nity housing shall have at the time of purchase, pursuant to  the  defi-
    55  nition "eligible individual", an income that does not exceed one hundred
    56  percent  of  the  income  limits as established by the state of New York

        A. 2633                             6
 
     1  mortgage agency low interest rate loan program in non-target  categories
     2  for Suffolk county.
     3    (f) Such plan shall provide for the equitable distribution of communi-
     4  ty housing opportunities among all the communities of the town. The plan
     5  shall  ensure  that no community has an undue concentration of community
     6  housing opportunities that would substantially alter  the  character  of
     7  the  community. In determining equitable distribution of community hous-
     8  ing opportunities, existing community housing opportunities in a  commu-
     9  nity shall be considered.
    10    8.  Village participation. (a) The participation of any village in the
    11  production of community housing authorized by this section shall  be  at
    12  the option of the village. In order to participate, a village shall pass
    13  a resolution opting into the program and shall submit said resolution to
    14  the town board.
    15    (b)  Where a village opts to participate pursuant to this subdivision,
    16  an intergovernmental agreement shall be  executed  pursuant  to  article
    17  five-G of the general municipal law or other applicable legal authority,
    18  in order to establish the rights and responsibilities of each government
    19  regarding community housing opportunities.
    20    (c)  Regardless  of  whether  a  village  participates  in the program
    21  authorized by this section, properties in the village shall  be  subject
    22  to  the  supplemental real estate transfer tax authorized by subdivision
    23  two of section fourteen hundred forty-nine-bb of the tax law.
    24    § 4. Section 1449-bb of the tax law, as added by chapter  114  of  the
    25  laws of 1998, is amended to read as follows:
    26    §  1449-bb. Imposition of tax. 1. Notwithstanding any other provisions
    27  of law to the contrary, any town  in  the  Peconic  Bay  region,  acting
    28  through  its  town  board, is hereby authorized and empowered to adopt a
    29  local law imposing in such town a tax on each conveyance of real proper-
    30  ty or interest therein where  the  consideration  exceeds  five  hundred
    31  dollars,  at  the  rate  of  two  percent  of the consideration for such
    32  conveyance.  Provided, however, any such local law  imposing,  repealing
    33  or reimposing such tax shall be subject to a mandatory referendum pursu-
    34  ant  to  section  twenty-three  of the municipal home rule law. Notwith-
    35  standing the foregoing, prior to adoption of such local  law,  the  town
    36  must  establish a community preservation fund pursuant to section sixty-
    37  four-e of the town law. Revenues from such tax  shall  be  deposited  in
    38  such  fund  and  may  be used solely for the purposes of such fund. Such
    39  local law shall apply to any conveyance occurring on or after the  first
    40  day  of  a  month to be designated by such town board, which is not less
    41  than sixty days after the enactment of such local  law,  but  shall  not
    42  apply  to  conveyances  made  on  or after such date pursuant to binding
    43  written contracts entered into prior to such  date,  provided  that  the
    44  date  of execution of such contract is confirmed by independent evidence
    45  such as the recording of the contract, payment of  a  deposit  or  other
    46  facts and circumstances as determined by the treasurer.
    47    2.  Notwithstanding  any  other  provisions of law to the contrary, in
    48  addition to the tax authorized by subdivision one of this  section,  any
    49  town in the Peconic Bay region, acting through its town board, is hereby
    50  authorized  and  empowered  to adopt a local law imposing in such town a
    51  supplemental tax on each conveyance of real property or interest therein
    52  where the consideration exceeds five hundred dollars, at the rate of one
    53  half of one percent of the consideration for such conveyance.  Provided,
    54  however,  any  such  local  law  imposing, repealing or re-imposing such
    55  supplemental tax shall be subject to a mandatory referendum pursuant  to
    56  section  twenty-three  of  the municipal home rule law.  Notwithstanding

        A. 2633                             7
 
     1  the foregoing, prior to adoption of such local law, the town must estab-
     2  lish a community housing fund pursuant to section  sixty-four-k  of  the
     3  town law. Revenues from such supplemental tax shall be deposited in such
     4  fund  and  may  be used solely for the purposes of such fund. Such local
     5  law shall apply to any conveyance occurring on or after the first day of
     6  a month to be designated by such town board,  which  is  not  less  than
     7  sixty days after the enactment of such local law, but shall not apply to
     8  conveyances  made  on  or  after  such  date pursuant to binding written
     9  contracts entered into prior to such date, provided  that  the  date  of
    10  execution  of such contract is confirmed by independent evidence such as
    11  the recording of the contract, payment of a deposit or other  facts  and
    12  circumstances  as  determined by the treasurer. Any tax imposed pursuant
    13  to this subdivision shall be administered and collected in a like manner
    14  as the tax imposed by subdivision one of this section.
    15    § 5. Subdivision 3 of section 1449-ee of the  tax  law,  as  added  by
    16  chapter 114 of the laws of 1998, is amended to read as follows:
    17    3.  (a)  In the towns of East Hampton, Shelter Island and Southampton,
    18  an exemption of [two] four hundred [fifty]  thousand  dollars  shall  be
    19  allowed on the consideration of the conveyance of improved real property
    20  or  an interest therein and an exemption of one hundred thousand dollars
    21  shall be allowed on the consideration of the  conveyance  of  unimproved
    22  real property.
    23    (b)  In the towns of Riverhead and Southold, an exemption of [one] two
    24  hundred [fifty] thousand dollars shall be allowed on  the  consideration
    25  of  the  conveyance of improved real property or an interest therein and
    26  an exemption of seventy-five thousand dollars shall be  allowed  on  the
    27  consideration of the conveyance of unimproved real property.
    28    (c)  The exemption granted pursuant to the provisions of this subdivi-
    29  sion shall only apply to conveyances for residential property where  the
    30  consideration is two million dollars or less.
    31    §  6.  Subparagraph  1  of  paragraph  (a) of subdivision 4 of section
    32  1449-ee of the tax law, as amended by chapter 389 of the laws  of  2014,
    33  is amended to read as follows:
    34    (1)  in the towns of Southampton, East Hampton and Shelter Island, the
    35  primary residential  property  is  within  one  hundred  [twenty]  fifty
    36  percent  of  the  purchase price limits defined by the state of New York
    37  mortgage agency low interest rate mortgage program in the non-target one
    38  family categories for Suffolk county in effect on the contract date  for
    39  the sale of such property;
    40    §  7. Severability clause. If any provision of this act or application
    41  thereof shall for any reason be  adjudged  by  any  court  of  competent
    42  jurisdiction  to  be invalid, such judgment shall not affect, impair, or
    43  invalidate the remainder of the act, but shall be confined in its opera-
    44  tion to the provision directly involved in the controversy in which  the
    45  judgment shall have been rendered.
    46    §  8.  This act shall take effect immediately; provided, however, that
    47  the amendments to sections 1449-bb and 1449-ee of the tax law,  made  by
    48  sections  four, five, and six of this act shall not affect the repeal of
    49  such sections and shall be deemed repealed therewith.
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