December 15, 2004

Honorable Sheldon Silver
Speaker of the Assembly
Legislative Office Building
Albany, New York 12248

Dear Mr. Speaker:

I am pleased to present the 2004 Annual Report for the Assembly Committee on Housing highlighting the accomplishments of the past Legislative Session. It was a challenging yet productive year.

The achievements of the Committee include bills designed to facilitate the continued work of New York City’s Department of Housing, Preservation, and Development (HPD). Several bills were passed by the Assembly and then signed into law. Bills chaptered include ones to increase the amount of Article 8-A loans New York City may lend to owners of multiple dwellings for improvements and repairs (A.11163), and facilitate the transfer of buildings from negligent owners to new owners (A.11285-A).

In response to the continuing threat of buildings pre-paying or "buying out" of the Mitchell-Lama program, the Assembly again passed a package of bills to protect tenants. The Housing Committee was pleased to report A.11250 (Rules (Lopez)) which became Chapter 257 of the Laws of 2004. This chapter allows Mitchell-Lama companies supervised by the Department of Housing Preservation and Development in the City of New York to refinance their underlying mortgages provided they agree to remain in the Mitchell-Lama program for at least six more years. Other bills would eliminate the six percent cap on owner dividends while providing rent stabilization to tenants in buildings that buy out (A. 9851-A), require early notification for buy-outs (A.943), extend from twenty to fifty years the period of time before limited-profit housing companies may dissolve (A.2367), and protect Mitchell-Lama housing for artists (A.5466). Unfortunately, the Senate failed to pass these bills. The Committee will continue to advance this legislation in the next session and explore additional ways to keep owners in the program.

The Committee held several public hearings in 2004. In February the Committee explored how changes to local zoning laws can affect the production of affordable housing. In March the Committee looked for input about how Mitchell-Lama housing could be preserved, including what incentives could be given to owners to remain in the program. In April the Committee joined with the subcommittee on Public Housing to examine the New York City Housing Authority’s practices regarding records maintenance and also joined with the Taskforce on People with Disabilities to solicit ideas for increasing the production of affordable accessible units. Finally, in November the Committee explored whether inclusionary zoning could be used as a tool for developing additional affordable housing units.

Finally, the Assembly passed a bill raising both the allowable annual and aggregate amounts that may be given to the statewide network of Neighborhood Preservation Companies (NPCs) and Rural Preservation Companies (RPCs) (A.2790-A).

I am pleased with the many successes of the Committee and look forward to continuing our efforts in what is sure to be another difficult session ahead. I wish to extend my sincerest thanks to the members of the Committee, my staff, the staff of the Housing Committee, and to you, Mr. Speaker, for your commitment and support.

2004 ANNUAL REPORT

OF THE

ASSEMBLY STANDING COMMITTEE ON HOUSING

VITO J. LOPEZ, CHAIRMAN

Members of the Committee

STAFF

Jonathan L.M. Harkavy, Legislative Aide to the Chairman
Joanne Barker, Legislative Coordinator
Don Lebowitz, Committee Counsel
Linda Camoin, Legislative Analyst
Patrice Mago, Committee Clerk
Caryn S. Canfield, Committee Assistant
Kathleen Quackenbush, Program and Counsel Secretary

1. COMMITTEE JURISDICTION AND PURVIEW

   1. LEGISLATIVE HEARINGS
      1. Zoning Changes and Their Effects on Affordable Housing Production
      2. Preservation Of Mitchell-Lama Housing
      3. Maintenance Of Public Records At The New York City Housing Authority (Nycha)
      4. Accessible And Affordable Housing For People With Disabilities
      5. Inclusionary Zoning An Answer To The Affordable Housing Crisis

2. 2004 LEGISLATIVE HIGHLIGHTS

   1. PUBLIC AUTHORITIES
      1. Reauthorizing the State of New York Mortgage Agency
      2. Increasing HFA’s Authority to Finance Affordable Housing
      3. Increasing Amounts Allowed Under the Low-Income Housing Trust Fund Program
      4. Increasing Amounts for the Affordable Home Ownership Development Program
      5. Providing Funding for Projects in Former Brownfield Sites
      6. Extending Property Tax Exemptions
      7. Revising the Definition of "Mortgage"
   2. DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT (HPD)
      1. Authorizing Rent Restructuring
      2. Increasing the Housing Development Corporation’s Bonding Authority
      3. Increasing Amounts Allowed for Municipalities to Lend for Home Improvements and Repairs
      4. Expanding Types of Cooperatives Eligible for Relief from Real Estate Tax Arrears
      5. Facilitating the Transfer of Buildings from Negligent Owners to New Owners
   3. PUBLIC HOUSING
      1. Expanding the Rights of Public Housing Tenants
   4. NEIGHBORHOOD AND RURAL PRESERVATION PROGRAMS
      1. Eliminating Aggregate Contract Amounts
   5. COOPERATIVES AND CONDOMINIUMS
      1. Allowing Additional Loans When Units are Secured by Subordinate Mortgages
      2. Protecting Tenants During Conversions
      3. Preventing Senior Citizen Evictions in Coop/Condo Conversions
      4. Terminating Self-Dealing Contracts
      5. Expanding the Definition of Eligible Senior Citizen and Disabled Person
      6. Requiring Proof of Legal and Authorized Use
   6. MITCHELL-LAMA HOUSING
      1. Allowing Mitchell-Lama Companies to Refinance Mortgages
      2. Encouraging Continuation in Mitchell-Lama via Incentives
      3. Safeguarding New York State’s Mitchell-Lama Housing
      4. Protecting Housing Provisions for Artists
      5. Ensuring Early Notification of Mitchell-Lama Buy-Outs
      6. Extending Rent and Eviction Protections of the Rent Stabilization Law
      7. Protecting Former Mitchell-Lama Tenants
      8. Requiring Proof of Maintenance of Essential Services Before Approval of Rent Increases
   7. LOFT LAW
      1. Insuring Continuation of Services
      2. Expanding Loft Law Coverage
      3. Providing Additional Oversight and Remedies for Loft Dwellings and Residents
   8. RENT REGULATION
      1. Improving the Operations of Rent Guideline Boards
      2. Urstadt Law Repeal
      3. Reforming Major Capital Improvement Rent Increases
      4. Extending Protections to Former Section 8 Residents
      5. Preventing Eviction Due to Domestic Violence
      6. Eliminating Vacancy Decontrol Provisions
      7. Reducing Percentages Allowed for Rent Increases
      8. Limiting Landlord’s Possession for Personal Use
   9. BUILDING AND MAINTENANCE CODES
      1. Increasing the Minimum Heating Requirement
   10. OTHER
       1. Authorizing Housing Preferences for Police Officers
       2. Providing Farmworker Housing for Dairy Workers

3. 2004 BUDGET HIGHLIGHTS

   1. EXISTING HOUSING PROGRAM FUNDING
   2. NEW PROGRAM FUNDING

4. OUTLOOK FOR 2005

APPENDICES

APPENDIX A

APPENDIX B

APPENDIX C

The New York State Assembly Committee on Housing is composed of 27 members (20 majority members and 7 minority members).

The Committee is responsible for legislation concerning housing development and preservation. Its purview also includes jurisdiction of rent regulation as well as legislation that amends the following volumes of the New York State Consolidated Laws:

• Multiple Dwelling Law, which encompasses health and safety standards for buildings with three or more families living independently of each other in New York City and Buffalo;

• Multiple Residence Law, which covers health and safety standards for buildings with three or more families living independently of each other in all localities other than New York City and Buffalo;

• Private Housing Finance Law, which governs the following State programs: Mitchell-Lama; Limited Dividend Companies; Redevelopment Companies; Housing Trust Fund; Affordable Home Ownership Development; Turnkey; Permanent Housing for Homeless Families; Infrastructure Development Demonstration; Mobile Home Cooperative Fund; Housing Development Fund; Neighborhood Preservation; Rural Preservation; Rural Area Revitalization; Rural Rental Assistance; Special Needs Housing; Urban Initiatives; Permanent Housing for Homeless Families; several New York City programs; and the administration of the State Housing Finance Agency and New York City Housing Development Corporation; and,

• Public Housing Law, which covers the safety, management, and financing of local public housing authorities throughout the State.

In addition to bills regarding these laws, the Committee has jurisdiction over legislation amending the following sections of the Unconsolidated Laws: the Emergency Housing Rent Control Law; the Local Emergency Housing Rent Control Law; the New York City Rent Stabilization Law; the Emergency Tenant Protection Act of 1974; sections of the New York City Administrative Code and the City of Buffalo Administrative Code; sections of the General Business Law that relate to the conversion of real property from rental to cooperative (co-op) or condominium (condo) status; and sections of the Executive Law, Real Property Law, Real Property Actions and Proceedings Law, and the Public Authorities Law.

A. LEGISLATIVE HEARINGS

1. Zoning Changes and Their Effects on Affordable Housing Production

On February 26, the committee held a hearing focusing on zoning changes and how the changes effect affordable housing production. The hearing explored the effects that zoning changes have on local communities, including the effects on the development of affordable housing and solicited ideas regarding modifications that could be made to the existing zoning change process.

The Committee heard from city officials and community leaders as well as neighborhood advocates and scholars. An official from the City Planning Office testified that new housing developed as a result of rezonings would benefit the neighborhoods because new market rate units would add to the supply of housing and moderate the upward spiral of housing prices. A representative from the Board of Standards and Appeals commented that the Board attempts to be responsive to the community and other agencies serving the community and that they strive to understand the particular issues facing each borough and its neighborhoods. Community representatives stressed the importance of requiring a significant number of affordable units when an area is rezoned for residential development. They argued that it has become increasingly difficult to locate affordable housing and without a mandated affordable housing component, rezonings may exacerbate the situation.

2. Preservation Of Mitchell-Lama Housing

The committee held a public hearing on March 26 to discuss ways to preserve existing Mitchell-Lama housing units and possible incentives for owners to stay in the program. The Housing Committee heard testimony from City and State officials, elected officials, and many tenants and tenant organizations about the importance of the Mitchell-Lama program and the need to preserve these units of affordable housing. Comment was solicited regarding A. 9851 (Lopez), which would provide incentives to owners to remain in the program and also protect tenants in buildings which buy out of the program. Witnesses expressed their support for this bill and for efforts by the Assembly to preserve this valuable source of affordable housing.

3. Maintenance Of Public Records At The New York City Housing Authority (Nycha)

In conjunction with the Subcommittee on Public Housing, on April 23 the Housing Committee convened a hearing to examine NYCHA’s practices regarding maintenance of public records at each housing project, including tape from surveillance cameras. The Housing Authority runs a program in conjunction with the New York City Police Department known as the VIPER program. This is a public safety program in which video surveillance cameras run twenty-four hours a day at certain housing authority projects. Questions arose about how the housing authority handles the protection of tenant’s privacy and video footage captured on tape. Testifying at the hearing was a representative from the VIPER program as well as several housing authority tenants. Tenants testified to the importance of cameras in housing authority projects as a deterrent to crime, yet concern was expressed about the misuse of the captured video footage.

4. Accessible And Affordable Housing For People With Disabilities

On April 30, the Committee held a public hearing in conjunction with the Taskforce on People With Disabilities to discuss the problems people with disabilities face when searching for housing and to solicit recommendations for developing additional units of affordable accessible housing. The Committee and the Taskforce heard from numerous disability and tenant advocates as well as individual tenants, who expressed the need for more units of accessible affordable housing. Witnesses testified to the serious need for more funding from the State for the development of such units and some suggested there be a dedicated funding stream established. Other witnesses testified to the need for a good listing of available accessible and affordable apartments. It was also suggested that accessibility be incorporated into development plans that make use of state funding.

5. Inclusionary Zoning An Answer To The Affordable Housing Crisis

In order to explore whether inclusionary zoning can be a tool used to develop affordable housing, the committee held a public hearing on November 8. The Committee heard from city officials, community leaders, building industry members and housing and neighborhood groups on this topic. The Commissioner of the Department of Housing Preservation and Development testified to the work the agency has done to create affordable housing throughout New York City, including a voluntary inclusionary zoning program. He went on to caution the committee about implementing mandatory zoning requirements for affordable housing. Members of the building industry echoed such concerns. Housing advocates and neighborhood associations expressed support for requiring the development of affordable housing units as new developments are proposed. Such development would be one tool for increasing the supply of much needed affordable housing units.

A. PUBLIC AUTHORITIES

1. Reauthorizing the State of New York Mortgage Agency
   A.11220 (Rules, Ramos); Chapter 147 of the Laws of 2004

   This chapter amends Section 2407 of the Public Authorities Law to increase SONYMA’s tax-exempt bonding authority to a total of $7.170 billion, an increase of $225 million. This increase is expected to provide SONYMA with sufficient bonding authority to cover its activities for the next year. In addition, this chapter extends SONYMA’s authority to purchase mortgages and issue tax-exempt bonds until July 16, 2005, and extends the Agency’s authority to issue taxable bonds until July 16, 2005.

2. Increasing HFA’s Authority to Finance Affordable Housing
   A. 11162-A (Rules, Bing); Chapter 204 of the Laws of 2004

   The New York State Housing Finance Agency (HFA) was created as a public benefit corporation in 1960 to finance the development of low income housing by providing low-cost mortgage loans to both for-profit and not-for-profit developers. In its forty year history, the Agency has issued more than three billion in bonds used to finance affordable housing developments. These developments include multi-family rental housing, senior housing, staff housing for educational and medical institutions, congregate care facilities, adult homes, and other special-needs housing.

   This chapter increases HFA’s tax-exempt bonding authority by $1.2 billion from $8.08 billion to $9.28 billion. This increase will enable HFA to continue to meet the demand for below-market financing among both for-profit and not-for-profit housing developers for another year.

3. Increasing Amounts Allowed Under the Low-Income Housing Trust Fund Program
   A.10810-A Rules (Lopez); Chapter 445 of the Laws of 2004

   This chapter increases to $100,000, payments, grants, or loans that may be provided by the Housing Trust Fund Corporation to assist eligible applicants for the furnishing of housing for low-income persons under the Low-Income Housing Trust Fund program. The authorization for such increase remains in effect until July 1, 2008.

4. Increasing Amounts for the Affordable Home Ownership Development Program
   A.11251 Rules (Lopez); Chapter Pending

   The law increases from $20,000 to $35,000 per dwelling unit and from $25,000 to $40,000 for higher cost projects the amount of financial assistance an eligible applicant can receive from the Affordable Homeownership Development Program.

5. Providing Funding for Projects in Former Brownfield Sites
   A.10943 Rules (Lopez); Passed Assembly

   This bill would direct the Commissioner of the Division of Housing and Community Renewal and the Affordable Housing Corporation to grant preference in the awarding of Housing Trust Fund and Affordable Homeownership Development contracts to economically feasible projects that are located on brownfield sites, provided that the brownfield site has received a certificate of completion from the Department of Environmental Conservation.

6. Extending Property Tax Exemptions
   A.8133 (Rules, Brodsky); Passed Assembly

   This bill would authorize municipalities to enter into contracts with redevelopment companies to exempt the real property of such companies from local and municipal real property taxes for a term commensurate with the term of the mortgage on such property made by the New York State Housing Finance Agency (HFA) instead of the current term of twenty-five years. It would also give the municipality the option of entering into a contract that will be co-terminus with the Agency’s permanent financing.

7. Revising the Definition of "Mortgage"
   A.8029 (Rules, Lopez); Passed Assembly

   This bill would allow the State of New York Mortgage Agency ("SONYMA") to issue and insure second mortgages for down payment and closing cost assistance to potential home owners. This bill would define the term "mortgage" to include a loan owed to a bank secured by a second lien (under certain limited circumstances) if the second lien secures a loan purchased by the agency and is made at the same time as a first lien securing a loan purchased by the agency.

B. DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT (HPD)

New York City’s housing needs are among the greatest in the nation. As a result, the Housing Committee works closely with New York City’s Department of Housing, Preservation, and Development to ensure that those needs are met. The following are summaries of bills supported by HPD that were acted upon by the Assembly.

1. Authorizing Rent Restructuring
   A. 10186-A (Robinson); Chapter 253 of the Laws of 2004

   This chapter grants New York City the authority to restructure the rents of dwelling units in buildings acquired by the federal government as the result of foreclosure of a mortgage loan insured or held by the federal government. The restructuring authority would be conditioned upon the properties being rehabilitated. The chapter also provides certain safeguards for tenants in occupancy. Such authority expires five years after the effective date.

2. Increasing the Housing Development Corporation’s Bonding Authority
   A.11286 (Rules, Lopez); Chapter 227 of the Laws of 2004

   This chapter allows the City of New York Housing Development Corporation ("HDC") to increase the maximum aggregate principal amounts of its outstanding notes and bonds by $450 million from $4.4 billion to $4.85 billion. HDC uses this bonding authority to finance new construction and the conversion of non-residential buildings to housing in the Congressionally designated Liberty Zone and in other areas throughout the city.

3. Increasing Amounts Allowed for Municipalities to Lend for Home Improvements and Repairs
   A.11163 (Rules, Diaz, L.); Chapter 449 of the Laws of 2004

   This chapter increases the size of Article 8-A loans New York City may lend to owners of multiple dwellings for improvements and repairs to those dwellings. This chapter raises the current rehabilitation loan limit of $25,000 to $35,000.

4. Expanding Types of Cooperatives Eligible for Relief from Real Estate Tax Arrears
   A.10858 (Rules, Lopez); Chapter 225 of the Laws of 2004

   This chapter permits the City of New York to waive the payment for certain tax arrears for buildings operated as low-income co-ops provided that they are managed in compliance with a regulatory agreement. The chapter also repeals provisions requiring the property be acquired from New York City, and redefines eligible properties as those controlled by its resident shareholders or those who agree to offer to the residents the opportunity to acquire ownership and control of the company.

5. Facilitating the Transfer of Buildings from Negligent Owners to New Owners
   A.11285-A (Rules, Lopez); Chapter 149 of the Laws of 2004

   The chapter extends to June 30, 2007, the City of New York’s authority to "evaporate" (reduce to zero) liens placed on properties for municipally financed repairs.

C. PUBLIC HOUSING

The State of New York continues to play an important role in regulating and supporting the operation of public housing. Currently, over 18,000 units of State-regulated public housing are operated by thirty public housing authorities. In New York City alone, State-supervised public housing developments provide housing to over 30,000 people.

Despite the importance of these developments to the State’s efforts to provide affordable housing, public housing authorities desperately need additional assistance in order to make long overdue capital improvements. However, due to the inadequate level of funding provided through the State’s Public Housing Modernization program, many essential improvements and repairs continue to languish for lack of available funds. Increased funding for modernization remains one of the Committee’s top priorities.

1. Expanding the Rights of Public Housing Tenants
   A.6769 (Wright); Passed Assembly

   This bill would allow public housing tenants to conduct meetings free of charge in common areas owned by their housing authority.

D. NEIGHBORHOOD AND RURAL PRESERVATION PROGRAMS

The Neighborhood and Rural Preservation programs (NPP and RPP) provide grants to cover the administrative costs of not-for-profit community groups engaged in a variety of housing activities ranging from housing development and rehabilitation to homebuyer counseling and tenant assistance. These not-for-profits are known as neighborhood and rural preservation companies (NPCs and RPCs). Since 1990 alone, NPCs and RPCs have played an instrumental role in the creation of over 32,000 units of affordable housing. According to the New York State Division of Housing and Community Renewal, for every dollar invested in NPCs and RPCs between $13 and $18 is leveraged from private and other public sources for affordable housing.

1. Eliminating Aggregate Contract Amounts
   A.2790-A (Lopez); Passed Assembly

   This bill would remove the current provision limiting the aggregate contract amount neighborhood and rural preservation companies may receive. The aggregate amount is currently $1.76 million; this bill would make the aggregate amount unlimited. This bill would also remove the current provision limiting the annual contract amount NPCs and RPCs may receive after reaching an aggregate sum of $300,000. Under this bill, NPCs and RPCs would be able to receive up to $100,000 annually.

E. COOPERATIVES AND CONDOMINIUMS

The purchase of a cooperative or condominium is viewed by many as an alternative to home ownership. However, buying a co-op or condo is often a complex process requiring a substantial investment of time and money on the part of the purchaser.

Upon purchase, a co-op shareholder or condo unit-owner holds an interest in the cooperative or condominium corporation and has a tremendous stake in the management of the property. But unlike owning a home, where an individual owner has the final say as to property management decisions, an elected board has these responsibilities in a co-op or condo. Condo unit-owners elect a board of managers, while co-op shareholders elect a board of directors.

Many of the financial problems associated with cooperatives and condominiums resulted from the tremendous conversion boom that took place in the 1980s. As the economy declined, a soft real estate market hurt both the sponsors who had invested huge sums of money to convert buildings and the shareholders who had purchased shares in troubled buildings.

Because a rental building can be converted with as little as fifteen percent of the tenants wishing to purchase, many sponsors converted under less than ideal financial circumstances. Trouble resulted when sponsors had difficulty selling vacant units. Unable to meet mortgage payments and sustain building services, some sponsors defaulted on bank loans, souring the investment for shareholders and placing building residents at risk.

The Assembly passed several pieces of legislation this year that would alleviate problems in the cooperative and condo housing market and protect this invaluable source of housing.

1. Allowing Additional Loans When Units are Secured by Subordinate Mortgages
   A.11219 Rules (Lopez); Chapter 475 of the Laws of 2004

   This chapter allows the Division of Housing and Community Renewal (DHCR) and the Housing Trust Fund Corporation (HTF) to make loans with respect to condominium units that are secured by subordinate mortgages. The chapter gives condominium mortgages held by DHCR and the HTF priority over liens for common charges, and permits DHCR and the HTF to invest subordinate mortgages in connection with housing programs.

2. Protecting Tenants During Conversions
   A.4233 (Sanders); Passed Assembly

   This bill would repeal provisions that allow co-op/condo conversion plans that contemplate the eviction of existing tenants. Under this bill, only non-eviction plans would be allowed for conversions. This bill would also prohibit landlords of condominium and cooperative residential conversions from evicting tenants refusing to purchase such cooperatives or condominiums.

3. Preventing Senior Citizen Evictions in Coop/Condo Conversions
   A.1946 (Sanders); Passed Assembly

   This bill would protect persons sixty-two years of age or older who are tenants of a dwelling unit located in a building in New York City and who are threatened with eviction because their building is subject to a cooperative or condominium conversion plan. These tenants would be entitled to remain in occupancy of their dwelling unit.

4. Terminating Self-Dealing Contracts
   A.4038 (Grannis); Passed Assembly

   This bill would strengthen the rights of cooperative shareholders and condominium owners by requiring sponsors of conversion plans to notify tenants of their right to terminate a self-dealing contract. Self-dealing contracts are contracts for the management or maintenance of the co-op or condominium between the conversion sponsor and itself or an affiliate of the sponsor.

5. Expanding the Definition of Eligible Senior Citizen and Disabled Person
   A.4640 (Brennan); Passed Assembly

   This bill would expand the definition of "eligible senior citizen" and "disabled person" with respect to condominium and cooperative conversion to include any member of the tenant’s household lawfully occupying the premises as his or her residence who is sixty-two years of age. The bill would provide protection to disabled and senior citizen non-purchasing residents of buildings that undergo cooperative or condominium conversions under an eviction plan even when such residents are not tenants of record in the buildings.

6. Requiring Proof of Legal and Authorized Use
   A. 6606 (Kaufman); Passed Assembly

   This bill would authorize the Attorney General to refuse to issue a letter stating a real estate syndication offering has been filed unless the statement, prospectus or plan shows that the use is legal and authorized by applicable local building and health laws and regulations.

F. MITCHELL-LAMA HOUSING

Since the 1950s, the Mitchell-Lama program has provided affordable housing to moderate-income New Yorkers. More than 400 Mitchell-Lama developments, housing approximately 150,000 families, are scattered throughout the State. The continued viability of this housing remains a critical part of New York State’s effort to ensure the availability of affordable housing for each of its citizens.

Despite this, to date owners of thousands of apartments have ended rental or sales restrictions that cover their buildings by repaying loans issued under the Mitchell-Lama guidelines. In fact, forty-three developments with 17,000 units of affordable housing have left the program. These "buy-outs" can have a devastating impact on the families living in these buildings as rents may double or triple when existing leases expire.

Since 1999, the Assembly has responded by passing a package of bills to protect Mitchell-Lama tenants. The Committee continued to pursue this package of legislation in 2004. This legislative session the Assembly added two bills to this package, each focusing on providing incentives to owners to stay in the program.

1. Allowing Mitchell-Lama Companies to Refinance Mortgages
   A.11250 (Rules (Lopez); Chapter 257 of the Laws of 2004

   This chapter allows Mitchell-Lama companies supervised by the Department of Housing Preservation and Development in the City of New York to refinance their underlying mortgages provided they agree to remain in the Mitchell-Lama program for at least six more years.

2. Encouraging Continuation in Mitchell-Lama via Incentives
   A.9851-A (Lopez); Passed Assembly

   This bill would authorize municipally aided Mitchell-Lama rental developments in New York City to pay dividends or interest in excess of six percent per year. It would also provide rent stabilization protection for tenants in Mitchell-Lama developments that still choose to buy out of the program. The legislation would also exempt developments where the tenants and owner have executed a settlement agreement regarding their respective rights and obligations.

3. Safeguarding New York State’s Mitchell-Lama Housing
   A.2367 (Lopez); Passed Assembly

   This bill would extend from twenty years to fifty years the period of time a company must continue in operation before limited-profit housing companies may dissolve and leave the Mitchell-Lama Program. This legislation would preserve Mitchell-Lama housing as an affordable housing resource for the future.

4. Protecting Housing Provisions for Artists
   A.5466 (Millman); Passed Assembly

   This bill would require that before a Mitchell-Lama housing company could voluntarily dissolve, it would have to fully satisfy any pre-existing legal obligations to provide housing for artists.

5. Ensuring Early Notification of Mitchell-Lama Buy-Outs
   A.943 (Lopez); Passed Assembly

   This bill would require Mitchell-Lama housing companies that intend to dissolve to provide notice of such intention to all their lease holders at least six months prior to the anticipated date of dissolution. The bill specifies certain information that must be included in the required notice.

6. Extending Rent and Eviction Protections of the Rent Stabilization Law
   A.2419-A (Lopez); Passed Assembly

   This bill would extend the rent and eviction protections of the New York City Rent Stabilization Law to Mitchell-Lama developments occupied on or after January 1, 1974.

7. Protecting Former Mitchell-Lama Tenants
   A.670-A (Pretlow); Passed Assembly

   This bill would provide rent and eviction protection to the tenants in former Mitchell-Lama buildings. The bill would authorize municipalities in Nassau, Westchester, and Rockland counties to declare a housing emergency for former Mitchell-Lama buildings that have voluntarily dissolved.

8. Requiring Proof of Maintenance of Essential Services Before Approval of Rent Increases
   A.6071 (Kaufman); Passed Assembly

   This bill would require limited-profit housing companies to show maintenance of essential services before receiving approval of rent increases. The bill would define "essential services" which landlords in limited-profit housing companies are obligated to provide and would condition any authorized maximum average monthly rental increase on the continued maintenance of the services.

G. LOFT LAW

Originally passed in 1982, the Loft Law provided a mechanism for legalizing commercial lofts that had been converted into residences - many of which, because of their unique qualities and location, were occupied by artists. The law, which the legislature renewed until May 31, 2005, provides tenants who became residents of loft buildings in the early 1980’s with protections against arbitrary evictions and rent hikes. However, these tenants, long-term residents of the City who provide strong support for its prominence in artistic fields, are threatened by changing demographics and need greater protections.

Currently it is estimated that in Brooklyn alone, 10,000 people who live in buildings zoned for commercial or manufacturing use are not protected by the existing Loft Law. When the Assembly became aware of the large number of tenants threatened with eviction, it developed a package of bills to address the situation. By expanding the Loft Law, the Assembly seeks to increase the number of residents who would be covered under the existing statute and to provide important tenant protections for residents whose loft apartments are not currently covered.

1. Insuring Continuation of Services
   A.2788 (Lopez); Passed Assembly

   This bill would prohibit interruption of services in "would-be" interim multiple dwellings if the unit is used for residential purposes with the knowledge and consent of the owner. Essential services that have customarily been provided may only be interrupted for repairs, which shall be performed in a reasonably expedient manner or in the case of an emergency or by order of a court or other governmental organization. The bill would further provide that if the services have been interrupted or discontinued, the owner must restore such services for so long as residential occupancy continues.

2. Expanding Loft Law Coverage
   A.2717-A (Lopez); Passed Assembly

   This bill would expand the existing Loft Law to people who lived in illegal lofts for a period of at least one year, from January 1, 2000, to December 31, 2003. The bill would also extend the Loft Law to May 31, 2009.

3. Providing Additional Oversight and Remedies for Loft Dwellings and Residents
   A.10140 (Glick); Passed Assembly

   This bill would extend the Loft Law until 2007. It would also provide additional oversight for interim multiple dwellings, and would provide for additional remedies for residents of such dwellings. It would protect tenants who have occupied their lofts for twenty years or more from eviction due to an owner’s claim that he or she wants to use the unit or let a family member use the unit. This bill would further make additional provisions relating to the financing of such dwellings and the applicability of various provisions of the law to such dwellings.

H. RENT REGULATION

New York’s rent regulation laws provide protection to over 2.5 million tenants throughout the State. The basis for both rent control and rent stabilization is a housing emergency, defined as a vacancy rate below five percent that still exists in many areas of the State. Due to the existence of this emergency, government intervention is critical to protect tenants from unreasonable rent increases and evictions.

1. Improving the Operations of Rent Guideline Boards
   A.499-A (Brodsky); Passed Assembly

   This bill would provide for the appointment of three alternates on rent guideline boards. Under this legislation, one of the alternates would be a representative of tenants, another would represent owners, and the third would be a public representative. Alternates would be permitted to participate in all proceedings of the board as non-voting members and would participate as voting members when a member representing the same interest as the alternate is unable to fulfill his or her duties.

2. Urstadt Law Repeal
   A.2071 (Lopez); Passed Assembly

   This bill would amend the Local Emergency Housing Rent Control Act by removing the provision that prohibits cities of one million or more from strengthening rent regulation laws to provide more comprehensive coverage than provided by state laws.

3. Reforming Major Capital Improvement Rent Increases
   A.2718 (Sanders); Passed Assembly

   This bill would reform the method by which owners of rent regulated buildings are compensated for major capital improvements (MCIs). In addition to improving the methodology for determining MCI rent increases, this bill would require that rent increases associated with MCIs be treated as a surcharge that would not become part of the legal regulated rent by which annual rent increases are calculated. This bill would also require that rent surcharges authorized for major capital improvements cease once the cost of the improvement has been recovered

4. Extending Protections to Former Section 8 Residents
   A.2789-A (Lopez); Passed Assembly

   This bill would extend rent and eviction protections, pursuant to the Emergency Tenant Protection Act of 1974, to tenants living in former Federal Section 8 projects.

5. Preventing Eviction Due to Domestic Violence
   A.7344-A (Tocci); Passed Assembly

   This bill would prevent owners from evicting tenants who are forced to flee their rent-regulated units to escape domestic violence. Specifically, this legislation provides that victims of domestic violence, as defined by Section 459-A of the Social Services Law, would be deemed to occupy their rent-regulated units as their primary residence if they have been forced to leave the unit because of such violence and if they assert an intent to return.

6. Eliminating Vacancy Decontrol Provisions
   A.10845 Rules (Grannis); Passed Assembly

   This bill would repeal the vacancy decontrol provisions of the rent regulation system for apartments renting at $2000 or more per month as of January1, 2004.

7. Reducing Percentages Allowed for Rent Increases
   A.10846 Rules (Lopez); Passed Assembly

   This bill would decrease from twenty percent to ten percent the amount a landlord could increase rent upon vacancy, and would prohibit a landlord from taking more than one increase in any one calendar year.

8. Limiting Landlord’s Possession for Personal Use
   A.10847 Rules (Lopez); Passed Assembly

   This bill would limit a landlord’s ability to take possession of units for their own primary residence to cases of immediate and compelling necessity, permit recovery of only one unit, and restrict such ability if the tenant has occupied the apartment for twenty or more years.

I. BUILDING AND MAINTENANCE CODES

1. Increasing the Minimum Heating Requirement
   A.977 (Lopez); Passed Assembly

   This bill would provide that certain multiple dwellings must be heated to a minimum temperature of sixty-two degrees Fahrenheit from October 1st to May 31st between 10 pm and 6 am. The current minimum temperature requirement is fifty-five degrees Fahrenheit.

J. OTHER

1. Authorizing Housing Preferences for Police Officers
   A. 3024 (Diaz, R.); Passed Assembly

   This bill would provide police officers in cities with a population of 100,000 or more an incentive to take up residency in such cities by offering preferential access to Mitchell-Lama and public housing, provided the city adopts a local law authorizing the preference and the police officers otherwise qualify for admission. The bill would also require applicants who receive awards from the Affordable Housing Corporation to provide a preference for homebuyers who are members of a police force in these same cities.

2. Providing Farmworker Housing for Dairy Workers
   A.8792-B Rules (Magee); Chapter 428 of the Laws of 2004

   This chapter expands the uses of the Farmworker Housing Loan Fund to include construction of housing for dairy farm workers and allows a group of farmers to work jointly to develop shared housing facilities for their workers. The chapter would also require the Commissioner of the Division of Housing and Community Renewal provide priority for housing construction for seasonal farmworkers.

This session was particularly difficult for the housing budget. The Governor proposed a fifty percent cut to the Neighborhood and Rural Preservation Companies. The Assembly worked with the Senate to pass a budget that included restorations for these important programs as well as a significant increase to housing capital programs. Unfortunately the Governor vetoed the increased funding for these important initiatives.

A. EXISTING HOUSING PROGRAM FUNDING

NPP and RPP provide grants to cover the administrative costs of not-for-profits engaged in a variety of affordable housing activities. According to the Division of Housing and Community Renewal, for every dollar the State invests in NPP and RPP, between $13 and $18 is leveraged for affordable housing from other public and private sources.

The Governor originally proposed $5.465 million for NPP, a decrease of $10.065 million, and $2.355 million for RPP, a decrease of $2.745 million, from SFY 2003. The Assembly was successful in adding $4,966,500 to the Neighborhood Preservation program for a total appropriation of $10,431,500, and supported the addition of $2,345,000 to the Rural Preservation Program for a total appropriation of $4.7 million. This restored amount is essential for maintaining adequate funding for all existing groups in good standing. The Governor, however, vetoed the funding that was restored, leaving the not-for-profits with a cut of fifty percent for their administrative costs.

The Homes for Working Families program uses a combination of tax-exempt bonds, low-interest loans from the State, and federal Low Income Housing Tax Credits to finance the development of housing for households earning between 50% and 60% of median income. By providing developers a vehicle to access otherwise unused federal 4% Housing Tax Credits, Homes for Working Families offers an opportunity to produce high quality, affordable housing at a lower cost for New York State’s taxpayers. The $7 million enacted represents no change from last year’s budget.

This program provides grants and loans of up to $20,000 per unit (plus an additional $5,000 in high-cost areas) for rehabilitation and new construction of one-to four-family dwellings for middle-income New Yorkers. This represents no change from SFY 2002.

This program provides grants for emergency transitional and permanent housing for the homeless through acquisition, construction, and rehabilitation. This year’s budget appropriation is the same level as was enacted last year for the development of permanent, emergency, or transitional housing for homeless persons. The $30 million appropriation includes $5 million to be set aside for the Homeless Persons With AIDS Program.

This program provides funding to modernize state-aided public housing projects and to address structural problems that threaten the safety of tenants. The Executive did not propose any increased funding for this vital program.

This program provides grants of up to $5,000 to low-income elderly homeowners in one-to-four family homes to correct conditions that threaten their lives, health, or safety and that would otherwise force them from their homes. As such, HOPE grants enable older New Yorkers to maintain their independence and avoid more costly housing alternatives. Funding for HOPE/RESTORE remained level from last year’s budget.

The Trust Fund provides funding to not-for-profits, localities, and private developers for the construction or rehabilitation of rental housing that is affordable to low-income households. Funding for this program is maintained at the level enacted for the previous two fiscal years.

UHAP has provided eligible neighborhood preservation companies with grants to establish Urban Homeownership Counseling Centers. These centers promote the purchase and rehabilitation of one-to- five family, owner-occupied buildings by providing credit counseling and other technical assistance. The Governor failed to include any appropriation in the Executive Budget for this program, but the Assembly was successful in restoring its funding. However, this program was among the many that were vetoed by the Governor, thereby leaving it unfunded.

B. NEW PROGRAM FUNDING

In an effort to address the affordable housing crisis that has made New York State one of the least affordable places to live in the country, the Assembly fought to infuse new capital dollars into existing capital programs. Additions were made to the following programs, but despite the tremendous need for additional capital dollars for these successful housing programs, the Governor vetoed the entire $57 million housing capital appropriation.

Several programs that had been funded in the past were also funded out of this infusion of capital. They include:

This program was designed to provide funding for RPCs or other not-for-profit corporations working in rural areas for the purpose of creating, preserving or improving housing resources, or local commercial facilities; or restoring or improving public facilities.

The rural counterpart to UHAP, RHAP has provided eligible rural preservation companies with grants to establish Urban Homeownership Counseling Centers. These centers promote the purchase and rehabilitation of one-to- five family, owner-occupied buildings by providing credit counseling and other technical assistance.

This program was established to provide grants and loans to community based not-for-profit organizations for the purpose of revitalizing and improving housing and local commercial and service facilities in neighborhoods consistent with those defined by the Neighborhood Preservation Program.

The challenge of providing safe and affordable housing in New York State is more tremendous than ever given continued budget shortfalls. The Committee seeks to achieve this goal by developing policies that leverage private resources, encourage individual home ownership, lead to the creation of new housing opportunities, and lower the cost of affordable housing development. Despite the ever-increasing demands on state resources, the Assembly’s commitment to housing remains strong.

One of the top priorities for the Housing Committee in the upcoming session will be the extension of the Loft Law beyond its sunset date of May 31, 2005. Protecting tenants who currently reside in lofts designated as interim multiple dwellings units is an important piece in the affordable housing puzzle. Thus, the Committee will seek not only to extend the existing law but also to protect long-term tenants in lofts and to expand the law to cover unprotected loft tenants in Brooklyn, Manhattan, and other areas of New York City who are not covered because they were not in residence by the date required under the Multiple Dwelling Law.

The Committee will also focus on continuing the Service Contract Obligation Revenue (SCOR) Bond program to ensure an uninterrupted flow of state resources to affordable housing development. Since 1991, the SCOR Bond program has financed the rehabilitation and/or construction of over $1 billion of affordable housing throughout New York State.

Another priority for the Committee is to ensure that both the Housing Finance Agency (HFA) and the State of New York Mortgage Agency (SONYMA) have sufficient funds available to them so that they may continue to finance affordable housing throughout New York State.

In addition, the Committee will continue to seek the establishment of a revolving loan fund to help working families purchase and rehabilitate homes. Many of these families can currently afford monthly mortgage payments, but are unable to buy a home due to high down-payment and closing costs. By assisting families with these costs, as well as the cost of necessary repairs, this initiative could make the dream of owning a home a reality for thousands of New Yorkers.

Finally, the Committee will continue to fight to ensure that the State budget provides adequate funding to assist in the development of affordable housing, the rehabilitation of existing units, and the expansion of housing opportunities for the homeless, the elderly, and those with special needs.

I look forward to my thirteenth year as chairman with enthusiasm and will make every effort to uphold the Assembly’s commitment to quality, affordable housing for all of New York State’s citizens.

APPENDICES

APPENDIX A

2004 Summary Sheet
Summary of Action on all Bills Referred to the Committee on Housing

APPENDIX B

Bills That Passed the Assembly

APPENDIX C

Bills Signed By The Governor