BILL NUMBER: S9117
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the private housing finance law, in relation to estab-
lishing a small homeowner rehabilitation revolving loan program adminis-
tered by the New York state housing finance agency
 
PURPOSE OR GENERAL IDEA OF BILL:
Creates the Small Homeowner Rehabilitation Revolving Loan Program within
the New York State Housing Finance Agency (HFA). The program is designed
to provide financial assistance to small property owners facing demon-
strated financial hardship and owning residential properties of ten
units or fewer for necessary rehabilitation and repair projects
 
SUMMARY OF PROVISIONS:
Section 1 establishes a revolving loan program within the HFA that
defines eligibility, provides low interest, deferred, or forgivable
loans to financially distressed small homeowners for necessary rehabili-
tation while protecting tenants, prioritizing vulnerable properties, and
requiring annual reporting and audit oversight.
Section 2: The act takes effect immediately, and the administering agen-
cy may promulgate any necessary rules or regulations prior to the effec-
tive date.
 
JUSTIFICATION:
Small property owners who own buildings of 10 units or fewer play an
essential role in providing affordable housing across New York City.
Yet they are facing mounting financial and regulatory pressures that
threaten both the viability of their properties and the stability of the
housing stock.
Research indicates that mom-and-pop landlords control a significant
share of NYC's rental housing, with estimates suggesting that owners of
buildings with 1-10 units make up roughly 30%-50% of the city's rental
market. These smaller owners often lack the financial reserves and
organizational capacity of large corporate landlords and are dispropor-
tionately affected by rising costs, slow rent growth, and market vola-
tility.
Operating costs for rent-regulated buildings - a large portion of small
landlords' portfolios have escalated rapidly. According to data on regu-
lated properties, insurance premiums for multifamily buildings have
jumped as much as 150% since 2019, outpacing revenue growth and squeez-
ing maintenance budgets. Simultaneously, property taxes, labor, fuel,
and other operating expenses have grown faster than revenues can keep up
with - contributing to an estimated 17% gap between income and expenses
for many smaller owners.
These financial pressures are compounded by regulatory constraints that
limit landlords' ability to raise rents to match inflation or recover
costs after improvements. The 2019 Housing Stability and Tenant
Protection Act and subsequent tenant protection policies have removed
key tools for cost recovery, creating economic disincentives for neces-
sary rehabilitation work and, in some cases, prompting owners to defer
maintenance. As a result, many small landlords postpone critical
repairs, worsening building conditions and elevating safety hazards over
time.
The market distress also manifests in serious liquidity challenges. In
the affordable housing sector alone, landlords are owed roughly $130
million in unpaid back rent, with tens of thousands of tenants behind on
payments. This represents a burden that directly jeopardizes owners'
ability to meet mortgage, tax, and maintenance obligations.
Moreover, foreclosure risk is rising. Thousands of rent-stabilized
apartments and their buildings have increasingly been flagged for mort-
gage default or foreclosure as owners struggle under negative cash flow,
threatening to shrink the city's limited affordable housing stock.
At the same time, the city's housing court system is overwhelmed, with
over 150,000 new cases annually, leaving small owners waiting months or
years to recover unpaid rent or resolve disputes, often exacerbating
financial distress and compounding their inability to keep up with
repairs and code compliance.
These combined pressures of rapidly rising operating costs, regulatory
constraints on rent increases, mounting repair backlogs, foreclosure
risk, and slow legal remedies illustrate why small homeowners urgently
need targeted financial support to sustain their properties, safeguard
tenants, and preserve housing quality. The Small Homeowner Rehabili-
tation Revolving Loan Program will provide affordable, flexible financ-
ing to make essential rehabilitation and repair projects feasible,
protecting both vulnerable landlords and the renters who depend on this
crucial segment of New York City's housing supply.
 
LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPACT:
TBD.
 
EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that the
administering agency is authorized to promulgate any rules or regu-
lations necessary to implement the provisions of this act on or before
such effective date.