§ 402-b. Power of authority to enter into mixed-finance transactions
to continue viability of public housing. 1. Legislative findings and
declaration. The legislature finds and declares that the state has a
vital interest in the continued viability of public housing. It is
necessary to ensure that public housing continues to serve low-income
individuals and families who would otherwise face homelessness or be
forced into unsafe or unsanitary housing. Public housing functions as a
safety net for persons most in need of safe, decent and affordable
housing. The legislature further finds that the New York city housing
authority has made, and continues to make, a concerted effort to provide
public housing to individuals and families in need. Certain projects
owned by the New York city housing authority have suffered deterioration
over time, and the housing authority does not have sufficient resources
to address this deterioration. An infusion of private capital is
necessary to ensure the continued success and long term viability of
these projects. The legislature further finds that bringing state
financed public housing operated by the New York city housing authority
within the public housing subsidized by the federal government, by
utilizing the federal American Recovery and Reinvestment Act of 2009,
will allow the New York city housing authority to enter into mixed
finance transactions, which will result in receiving new operating and
capital subsidies from the federal government and preserve the units as
public housing. The legislature also finds that tenants living in the
projects that have been financed by the city of New York, commonly known
as Marble Hill Houses, St. Mary's Park Houses, Bay View Houses,
Boulevard Houses, Linden Houses and Samuel Houses, located in the city
of New York, counties of Bronx, Kings and New York, will, through
multiple contracts and agreements among the New York city housing
authority, investment partners and the federal government, be afforded
the same protections as tenants living in the projects listed in
subdivision two of this section. The legislature therefore finds and
declares that enactment of this section would enable redevelopment and
rehabilitation of those certain New York state and New York city
financed projects owned by the New York city housing authority, and the
continued operation of said projects for persons and families of low
income.

2. Upon approval by the commissioner of the division of housing and
community renewal, the New York city housing authority is hereby
authorized to sell or lease all or part of the residential buildings
within the projects commonly known as Marlboro Houses, Chelsea Houses,
Castle Hill Houses, 344 East 28th Street, Amsterdam Addition, Bushwick
Houses, Stephen Wise Towers, Arthur H. Murphy Houses, Baychester Houses,
Jonathan Williams Plaza, Drew-Hamilton Houses, Independence Towers,
Rutgers Houses, Stapleton Houses and Manhattanville Houses, located in
the city of New York, counties of Bronx, Kings, New York and Richmond,
upon such terms and conditions and in such manner as the New York city
housing authority may deem appropriate and in compliance with the
provisions of this section. The commissioner of the division of housing
and community renewal shall not grant such approval unless he or she
makes a finding that such sale or lease will enable the projects to be
redeveloped and operated in such manner as to provide decent, safe and
sanitary housing within the financial reach of persons and families of
low income and a further finding that new federal assistance is
significantly more likely to be available to the projects listed in this
section if such approval is granted. There shall be no requirement for a
finding by the commissioner of the division of housing and community
renewal that provisions have been made to pay or otherwise assure
payment or retirement of all bonds, notes and other obligations
heretofore issued to finance the projects or a portion thereof, provided
that the sale or lease of the projects is part of a comprehensive plan
of rehabilitation and/or restructuring which includes the provision of
housing for persons and families of low income. The sale or lease of all
or part of the residential buildings within the projects enumerated in
this section shall be made subject to all pertinent federal statutory,
executive orders, consent orders and regulatory requirements, as those
requirements may be amended from time to time, and contracts and
agreements which shall be recorded against and which shall run with the
land, including a regulatory and operating agreement and a declaration
of restrictive covenants requiring the operation and maintenance of such
residential projects in compliance with federal requirements, and
amendments to a certain mixed-finance amendment to the consolidated
annual contributions contract between the New York city housing
authority and the United States department of housing and urban
development (collectively, the "applicable public housing
requirements").

3. (a) All applicable public housing requirements pertaining to
federal public housing projects shall apply to the projects listed in
subdivision two of this section, including but not limited to all
procedural and substantive due process requirements, restrictions on
evictions except for just cause, the right to automatic renewals of
leases, and the right to meaningful input in matters concerning tenants;
Section 8 units shall be subject to the voluntary conversion agreement
and management plan approved by the United States department of housing
and urban development on September eleventh, two thousand eight, and as
it may be amended from time to time. The public housing and Section 8
leases of tenants in occupancy of the projects listed in subdivision two
of this section on the date of sale or lease of such projects shall
remain in effect, except as such leases may be modified or assigned to
reflect changes in the ownership of project buildings. Each such tenant
shall enjoy the same rights and obligations as other tenants with public
housing leases occupying dwelling units in the housing projects owned
and operated by the New York city housing authority that are not listed
in subdivision two of this section, or pursuant to Section 8 leases
supported by Section 8 vouchers, except as provided by paragraph (b) of
this subdivision. Each project owner and the New York city housing
authority shall be jointly and severally obligated to provide and
protect the rights set forth herein.

(b) All units in projects listed in subdivision two of this section
where there has been an allocation of federal low-income housing tax
credits, during the required federal regulatory compliance periods
applicable to such federal low-income housing tax credits, shall upon
vacancy be rented by persons or families whose income does not exceed
sixty percent of area median income at a rent, including utilities, not
to exceed thirty percent of the household's adjusted gross income. All
other units shall upon vacancy be rented by persons or families whose
income does not exceed eighty percent of area median income at a rent,
including utilities, not to exceed thirty percent of the household's
adjusted gross income. All income guidelines applicable to federal
public housing projects shall apply to projects listed in subdivision
two of this section. Each such tenant shall enjoy the same rights and
obligations as other tenants with public housing leases occupying
dwelling units in the housing projects owned and operated by the New
York city housing authority that are not listed in subdivision two of
this section, or pursuant to Section 8 leases supported by Section 8
vouchers, except as provided by this paragraph.

(c) All tenants who reside in the housing projects listed in
subdivision two of this section prior to the sale or lease of such
project shall be entitled to remain in their current apartments,
provided that such tenant or tenants comply with the terms and
conditions of their leases and meet all applicable federal income
guidelines. Each such tenant shall enjoy the same rights and obligations
as other tenants with public housing leases occupying dwelling units in
the housing projects owned and operated by the New York city housing
authority that are not listed in subdivision two of this section, or
pursuant to Section 8 leases supported by Section 8 vouchers, except as
provided by paragraph (b) of this subdivision.

(d) For each project listed in subdivision two of this section, all
units occupied by persons of low income shall be physically integrated
with all other units in the project. They shall share common means of
access, services and amenities equally with all other units and shall in
no way be physically or otherwise set apart from all other units in the
project.

(e) All prospective public housing and Section 8 tenants shall be
selected from a waiting list which shall be maintained by the New York
city housing authority in compliance with the federal public housing and
Section 8 laws and all applicable rules and regulations. The New York
city housing authority and each respective project owner shall screen
tenants and jointly have final approval over tenant selection all in
accordance with aforementioned laws, rules and regulations. All
prospective public housing tenants shall be taken from the waiting list
in the order in which they applied for the size appropriate unit,
subject however to preferences and priorities provided for in the public
housing law and all applicable rules and regulations.

(f) The entity that acts as the managing member or general partner of
the respective owner of each project listed in subdivision two of this
section following transfer of such project, shall at all times be a
not-for-profit housing development fund corporation wholly owned by the
New York city housing authority and shall be established under article
eleven of the private housing finance law. The board of directors of
such housing development fund corporation shall be composed of the
chairperson of the New York city housing authority and the duly
appointed members of such authority.

(g) The entity that owns any project or assists in the management of
any project may include an entity exempt from federal income taxes under
section 501(c)3 of the Internal Revenue Code of 1986 as amended, or its
wholly owned subsidiary.

(h) The provisions of this section may be enforced by any party
aggrieved by a violation of such provisions.

(i) In the case where there is an allocation of federal low income
housing tax credits in connection with a sale or lease of the project,
the fee payable to the project developer shall not exceed twelve percent
of the total development cost, provided however, that the fee payable to
such developer may be increased to the maximum percentage permitted
under regulations promulgated by the division of housing and community
renewal if the developer assumes additional financial risk. Such
increase shall not be granted (i) for risk the developer is customarily
required to assume or guarantees which the developer is customarily
required to provide by industry practice, (ii) for any risks or
guarantees which parties other than the developer would ultimately bear,
or (iii) if the cost of such risks or guarantees would be paid from
governmental grants, loans, subsidies or other governmental funds. The
foregoing limitation shall not apply to any portion of a developer fee
paid to the housing authority.

(j) The provisions of this section shall be applicable to each of the
projects delineated in subdivision two of this section commencing on the
closing date of the sale or lease of each respective project in
compliance with applicable law and shall be binding on all owners and
operators of such project.

4. State subsidies available to the projects listed in subdivision two
of this section in connection with the bonds, notes or other obligations
heretofore issued to finance the cost thereof may, subject to annual
appropriation and upon compliance with the provisions of this section,
continue to be used to pay the debt service on such bonds, notes or
other obligations, subject to such terms and conditions as the
commissioner of the division of housing and community renewal may deem
appropriate.

5. The New York city housing authority shall be required to develop
and circulate a notice to all tenants of public housing projects listed
in subdivisions one and two of this section. The notice shall contain
information regarding the transfer and federalization process, as well
as notice that tenants' rights to occupancy and due process shall
continue as they existed prior to the transfer.

6. The New York city housing authority, shall provide the commissioner
of the division of housing and community renewal, the speaker of the
assembly, the temporary president of the senate, the minority leader of
the assembly, the minority leader of the senate, the chair of the
assembly housing committee, and the chair of the senate housing,
construction, and community development committee copies of the annual
project activity report or any substantially similar annual report that
it is required to submit to the United States department of housing and
urban development that is related to the projects listed in subdivisions
one and two of this section.