BILL NUMBER:A7087A

TITLE OF BILL:  An act to amend chapter 514 of the laws of 1983 amending
the  private  housing finance law and the real property tax law relating
to the powers of the New York city housing development  corporation  and
the New York state housing finance agency to finance certain multi-fami-
ly housing, in relation to the effectiveness of such chapter

SUMMARY OF PROVISIONS:

This  proposed legislation would extend the sunset provision of subdivi-
sion 23-c of Section 654 of Article 12 of the  Private  Housing  Finance
Law, which establishes the New York City Housing Development Corporation
("HDC").  The  sunset  provision currently calls for subdivision 23-c to
expire on June 30, 2009. This bill would preserve  subdivision  23-c  in
full  force  and  effect  until  June  30, 2011, thereby allowing HDC to
continue to issue notes and bonds for the financing of housing  develop-
ments.

REASONS FOR SUPPORT:

Enactment  of  this  proposed legislation would allow HDC to continue to
assist in the financing of newly constructed and  rehabilitated  low-and
moderate-income housing in the City of New York. The bill would continue
HDC's authorization to enter into direct loan agreements with developers
of low- and moderate-income housing, as well as joint financing programs
              

with  recognized  lending  institutions.  Pursuant  to a joint financing
program, HDC lends funds obtained from the sale of its securities,  both
tax-exempt and taxable, to financial institutions, which in turn re-lend
the  proceeds  to private developments for the construction or rehabili-
tation of low- or moderate-income housing. In cases of conduit  lending,
the responsibilities of underwriting and servicing the loans are assumed
by  the lending institutions, which also bear the risks of default under
the mortgages. HDC does not rely upon the credit (or tax levy) of either
the City or the State of New York to pay bondholders.

Since its creation in 1971, HDC has financed the construction or preser-
vation of more than 135,000 units of  affordable  housing  in  New  York
City.  More  than 75,000 units have been financed since 1984 pursuant to
subdivision 23-c of Section 654. Overall,  HDC's  portfolio  includes  a
broad  array  of  housing,  from  low-income  tax credit developments to
mixed-income developments and aging developments originally financed  in
conjunction  with  direct  federal subsidies. The vast majority of units
financed by HDC are income restricted to be affordable to  families  and
individuals who earn from 40% to 130% of the area median income.

Under  Mayor  Bloomberg's expanded "New Housing Marketplace" initiative,
HDC is responsible for creating or preserving 42,000  units  of  housing
during an eleven year period ending in June 2014. As of January 1, 2009,
HDC  has  financed  the construction or preservation of more than 40,000
apartments under the plan, and HDC expects to exceed its goal  in  2009.
The  housing  units  for  the Mayor's plan are financed under three main

programs: (1) Low Income Affordable Marketplace Program  ("LAMP")  which
combines  tax-exempt  bonds  and  4%  as-of-right low income housing tax
credits ("LIHTC") to produce housing affordable to people  earning  less
than  60%  of  area  median  income, (2) New Housing Opportunity Program
("New HOP"), a taxable bond program used to finance rental units afford-
able to middle-income New Yorkers, and (3) Preservation,  including  its
Mitchell-Lama  restructuring  program  (described  below) as well as its
program  for  preserving  federally  assisted  developments   originally
financed under Sections 8, 202 and 236 of the National Housing Act.

In  June  of  2004  Mayor  Bloomberg announced a voluntary Mitchell-Lama
restructuring program along with a rehabilitation loan program  for  all
Mitchell-Lama  projects  with first or second mortgages that are held by
HDC or the City. The program provides for refinancing  or  restructuring
of the Mitchell-Lama's existing mortgage in exchange for a commitment to
remaining  the  program  for  a  minimum  of an additional 15 years. The
response to this program has been significant. To date HDC has  restruc-
tured  38  projects  with more than 18,250 units preserved. HDC is still
actively working with Mitchell-Lamas in New York  City  and  expects  to
provide funds to preserve even more units over the next few years.

Overall, in 2009, HDC expects to close on financing or refinancing tran-
sactions for over 25 projects involving the construction or preservation
of approximately 5,000 units of housing.

PRIOR LEGISLATIVE HISTORY: New Legislation.

FISCAL IMPLICATIONS: None to the State.

EFFECTIVE DATE: This act shall take effect immediately.