BILL NUMBER: S9412
SPONSOR: CLEARE
 
TITLE OF BILL:
An act to amend chapter 253 of the laws of 2004 amending the private
housing finance law relating to rehabilitated multiple dwellings
acquired and reconveyed by the federal government, in relation to the
effectiveness thereof
 
SUMMARY OF PROVISIONS::
Chapter 253 of the Laws of 2004 granted the New York City Department of
Housing Preservation and Development ("HPD") the authority to restruc-
ture the rents of dwelling units in buildings acquired by the federal
government as a result of the foreclosure of a mortgage loan insured or
held by the federal government. The restructuring authority was condi-
tioned upon the properties being rehabilitated, and is scheduled to
expire on June 30, 2024. This bill extends this authority to June 30.
2027.
 
REASONS FOR SUPPORT::
The federal 203(k) home mortgage scandal left approximately 500 small
homes, tenements and brownstones in New York City facing foreclosure
because the properties were bought and resold at inflated prices with
owners in many instances pocketing the money that was intended for
necessary repairs.
The federal Department of Housing and Urban Development (HUD) and HPD
have been undertaking a joint effort to rehabilitate and transfer these
buildings to qualified owners. HUD has contributed federal money toward
the rehabilitation cost.
The authority to restructure rents following the rehabilitation of a
building is necessary for the operation of an affordable housing devel-
opment. It is essential that sufficient building income exist to pay the
maintenance, operating costs and debt service of a multiple dwelling or
small home. Rent restructuring authority currently exists in every reha-
bilitation statute found in the New York State Private Housing Finance
Law. Such authority is conditioned, however, upon the rehabilitation
being financed by City capital funding. In the instance of the 203(k)
properties, the rehabilitation financing is federal. This legislation
would extend the authority to restructure rents for 203(k) properties to
June 30, 2027.
Permitting these troubled properties to be eligible for rent restructur-
ing is essential in order for these buildings to be a source of afforda-
ble housing for New York City residents. Accordingly, the Mayor urges
the earliest possible favorable consideration of this proposal by the
Legislature.