Establishes the New York State social housing development authority as a public benefit corporation to increase the supply of permanently affordable housing in the state through the acquisition of land and renovation or rehabilitation of existing real property, and through the construction of new, permanently affordable housing.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9088
SPONSOR: Gallagher TITLE OF BILL:
An act in relation to creating a public benefit corporation for the
construction, acquisition, and rehabilitation of permanently affordable
housing; and making an appropriation therefor
PURPOSE OR GENERAL IDEA OF BILL:
To create a new state authority with the mandate to build, acquire,
rehabilitate, and preserve permanently affordable housing statewide.
SUMMARY OF SPECIFIC PROVISIONS:
Section one contains the short title.
Section two contains the legislative findings and declaration. Section
three contains the definitions.
Section four creates the New York State Social Housing Development
Authority and outlines the composition of its corporate board.
Section five describes the powers of the corporation.
Section six requires the issuance of rules and regulations within one
year of the creation of the corporation and adherence to the state
administrative procedure act.
Section seven describes the procedures by which the authority may
acquire land and property.
Section eight requires the creation of a website, online portal, and
clearinghouse for projects and opportunities for residents, property
owners, and third parties.
Section nine describes the procedures by which the authority can exer-
cise a right of first refusal on the disposition of distressed proper-
ties containing three or more units in the state.
Section ten describes tenants' rights and protections in properties
owned by the corporation; inter alia that units in jurisdictions with a
rent guidelines board shall be placed under rent stabilization, and that
units in a jurisdiction without a rent guidelines board shall be guaran-
teed substantially similar rights as those under rent stabilization.
Rent increases are limited to no more than two percent per year, with
exceptions, and income recertification is not required after initial
occupancy. Rents are limited to twenty five percent of a household's
income at initial occupancy. An internal bureau is created for the
receipt and processing of complaints and petitions by residents.
Section eleven requires that the corporation create programs for the
construction of new, permanently affordable residential projects, the
conversion of acquisitions into permanently affordable projects, and the
construction of special purpose housing. The authority is allowed to
manage projects itself or transfer a ground lease to a qualified housing
company, and to designate projects as cooperatives or rentals, and as
mixed-income or one hundred percent affordable. The corporation is
further directed to rehabilitate properties to bring them into compli-
ance with energy efficiency standards and applicable building codes.
Across the portfolio, at least twenty five percent of the residential
units owned by the corporation must be for households earning thirty
percent or less than the area median income, and no more than one third
may be designated for households earning at least one hundred percent of
the area median income. Provisions regarding the financing of projects
are outlined.
Section twelve permits the authority to supersede local zoning and plan-
ning laws for any project designated as permanently affordable and
requires compliance with the state building code.
Section thirteen requires the creation of procedures for the creation of
elected resident councils.
Section fourteen outlines standards for contracting with the corpo-
ration, including provisions requiring prevailing wages or project labor
agreements.
Section fifteen outlines alternative project delivery contracts, such as
best-value, design-build, and other types of project delivery.
Section sixteen creates an office of technical assistance.
Section seventeen permits the authority to issue vouchers to dwelling
units in residential projects owned or managed by the authority.
Section eighteen requires the provision of relocation assistance to any
individual displaced by a project of the corporation and guarantees a
right of return or preference for such individual in projects belonging
to the corporation.
Section nineteen requires the creation of annual reports and evalu-
ations.
Section twenty permits the creation of wholly-owned subsidiaries for the
purposes of project management.
Section twenty one regulates monies of the corporation.
Section twenty two regulates bonds of the corporation.
Section twenty three requires the creation of debt service reserve
funds.
Section twenty four provides for the dissolution of the corporation.
Section twenty five provides for court proceedings involving the corpo-
ration.
Section twenty six includes provisions for actions against the corpo-
ration.
Section twenty seven provides for limited liability of the corporation
and its employees.
Section twenty eight designates the corporation as a public employer.
Section twenty nine requires to the greatest degree possible that mate-
rials for construction are acquired from manufacturers based in the
state or the United States, in that order, unless neither option is
available.
Section thirty provides for public access to records and meetings of the
board.
Section thirty one designates the authority as tax exempt, but provides
that the authority may agree to pay sums in lieu of taxes.
Section thirty two requires the construction of the act liberally so as
to effectuate its purposes, being necessary for the welfare of the state
and its inhabitants.
Section thirty three supersedes inconsistent provisions of other laws.
Section thirty four requires the severability of any particular
provision found invalid by a court of competent jurisdiction from the
remainder of the act's provisions.
Section thirty five appropriates sixty million dollars for operating
expenses. Section thirty-six contains the effective date.
JUSTIFICATION:
New York state has a long and proud history of social housing. Hundreds
of thousands of units in limited-equity cooperatives, limited-profit
housing, and public housing were constructed throughout the twentieth
century, much of which was built with state assistance. This robust
social housing system has formed an essential part of New York's urban
fabric, helping millions of families affordably launch careers, raise
families, and retire in the Empire State.
Unfortunately, New York state has not significantly invested in the
construction of new forms of social housing since the demise of the
Mitchell-Lama program in the 1970s, and the state now confronts a hous-
ing affordability crisis that drives thou'sands of New Yorkers into
homelessness every year. Thousands more are forced to leave the state
for want of affordable housing, and the dream of homeownership or stable
housing is inconceivable for many who remain.
This bill proposes the creation of a new state authority charged with
building new, high-quality, permanently affordable social housing in the
form of both rentals and cooperatives. By partnering with tenant organ-
izations who wish to purchase their accommodations and convert them to
cooperatives, or by acquiring and rehabilitating existing distressed
housing, the authority can also keep people in their homes and perma-
nently preserve affordability where it already exists. The housing
crisis now faced by our state requires not only bold action but durable
solutions. The proposed Social Housing Development Authority (SHDA) can
complement existing affordable housing programs while offering unique
benefits and paying long-term dividends. A state authority can stream-
line and fast-track developments by incorporating all necessary powers
and functions under one roof, eliminating unnecessary expenses and
bureaucratic delays; it can muster the capital necessary to take on
large projects or acquisitions; it can cross-subsidize across its port-
folio; it can act as a public land bank or trust; it can undertake
projects with external organizations seeking to invest in social hous-
ing, for example pension funds; and it can partner with non-profits,
land trusts, and community benefit organizations seeking to manage
affordable housing. Over time, the existence of a public developer like
the SHDA would steadily expand the portfolio of permanently affordable
social housing in New York, stabilizing the explosive growth in rents
and land values and making New York a more livable state for present and
future residents.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Sixty million dollars for initial operating expenses. Other fiscal
implications to be determined.
EFFECTIVE DATE:
This bill is effective immediately.
