BILL NUMBER: S6951

SPONSOR: KAVANAGH
 
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-family housing;
and to amend chapter 396 of the laws of 1984, amending the private hous-
ing finance law and the real property tax law relating to the powers of
the New York state housing finance agency to finance certain multi-fami-
ly housing, in relation to the effectiveness of such chapters

 
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 authorizes the New York City Housing Development Corporation
("HDC") to assist in the financing of newly-constructed and rehabili-
tated low- and moderate-income housing. The sunset provision currently
calls for subdivision 23-c to expire on July 23, 2021. This bill would
keep subdivision 23-c in full force and effect until July 23, 2023,
              

thereby allowing HDC to continue to issue notes and bonds for the
financing of housing developments.

 
REASONS FOR SUPPORT:

Enactment of this proposal would allow HDC to continue to assist in the
financing of newly constructed and rehabilitated low- and moderate-in-
come 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 275,000 units of affordable housing in New York
City. More than 210,000 units have been financed or refinanced since
1984 pursuant to the passage of subdivision 23-c of Section 654. Over-
all, HDC's portfolio includes a broad array of housing -from low-income
tax credit developments, to mixed-income developments and aging and
supportive housing developments. 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 the City's "Housing New York" plan, as of June 30, 2020, HDC has
financed the construction or preservation of more than 69,150 affordable
apartments in less than six years. HDC financed over 76,000 affordable
apartments under the City's prior housing plan, far surpassing its
original goals. HDC financing relating to the City's housing plan is
provided under a variety of new programs: (1) the Extremely Low and
Low-Income Affordable program ("ELLA"), which provides apartments for
low-income people earning 60% of the Area Median Income ("AMI") or less,
or if using income averaging for Low Income Housing Tax Credit ("LIHTC")
properties, 80% AMI or less, including deeply affordable apartments for
people earning no more than 30%, 40% and 50% of AMI or apartments for
the formerly homeless; (2) the Mixed-Middle Income program ("M2"), which
provides apartments for people at a mix of incomes, including low-income
people, moderate-income people earning 80-100% of AMI and middle-income
people earning 130-165% of AMI; (3) the "Mix and Match" program, which
provides apartments for people at a mix of incomes, including low-income
and moderate- or middle-income people; (4) the "50/30/20" program, which
provides apartments for low- and moderate-income -people in projects
where half the project is rented at the market rate; (5) the Mitchell-
Lama Reinvestment Program which anchors the affordability of the remain-
ing Mitchell-Lama apartments; an d (6) the Neighborhood Pillars program.
In addition, HDC has launched a series of other initiatives that use the
corporation's bonding authority, including programs using taxable bonds
and recycled tax-exempt bonds.

Since 2004, HDC has provided a voluntary Mitchell Lama restructuring
program and a rehabilitation loan program for all Mitchell Lama projects
in New York City. To date HDC has restructured over 50 Mitchell Lama
projects with approximately 38,000 units preserved and provided rehabil-
itation loans for several additional projects with 5,000 units. 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 and
provide additional funds to extend the affordability period for develop-
ments already restructured.

In 2021, HDC expects to close on financing/refinancing transactions for
over 40 projects involving the construction or preservation of approxi-
mately 10,000 units of housing.

Accordingly, the Mayor urges the earliest possible favorable consider-
ation of this proposal by the Legislature.