Relates to facilitating redevelopment of housing projects owned by redevelopment companies

2 Co-sponsors

• Ruth Hassell-Thompson
• Hiram Monserrate

Title of bill

An act to amend the private housing finance law, in relation to facilitating redevelopment of housing projects owned by redevelopment companies

Purpose of the bill

The bill corrects an oversight in Chapter 208 of the Laws of 2008. That law was intended to accomplish parallel amendments to Articles 2, 4 and 5 of the Private Housing Finance Law ("PHFL") using virtually identical language, but omitted some pertinent words from the amendment to Article 5.

Summary of provisions

Section 1 of the bill amends Section 112-a of the PHFL to add the words "capital improvements" and "redevelopment" which were erroneously omitted in a prior amendment pursuant to Chapter 208 of the Laws of 2008. As amended, the section provides that where a redevelopment company undergoes a comprehensive redevelopment plan, the supervising agency may approve a loan and encumbrance of such property in an amount in excess of actual project cost, provided, among other things, that such amount represents the cost of capital improvements, redevelopment, or acquisition by a new owner.

Section 2 of the bill sets forth the effective date.

Existing law

Pursuant to Chapter 208 of the Laws of 2008, Section 112-a of the PHFL provides that where a redevelopment company undergoes a comprehensive redevelopment plan, the supervising agency may approve a loan and encumbrance of such project in an amount in excess of actual cost of the project, provided that such amount represents cost of acquisition by a new owner, any consequent rent increase is not unduly burdensome to the tenants, and the redevelopment company enters into an agreement to remain under this article for a period of no less than fifteen years from issuance of the loan and encumbrance.

Prior legislative history

This is a new bill.

Statement in support

The bill seeks to correct an oversight in Chapter 208 of the Laws of 2008. That law was intended to accomplish parallel amendments to Articles 2, 4, and 5 using identical language, except for references to different supervising agencies and types of housing companies. However, the law amended Article 5 without including certain language that appears in the amendments to Articles 2 and 4.

All three Articles should have been amended to provide that where a redevelopment company undergoes a comprehensive redevelopment plan, the supervising agency may approve a loan and encumbrance of such property in an amount in excess of actual project cost, provided, among other things, that such amount represents the cost of capital improvements, redevelopment, or acquisition by a new owner. However, the amendment to Article 5 omitted capital improvements and redevelopment, leaving acquisition as the only type of cost that could qualify for financing above original project cost. This was a technical oversight that needs correction.

Budget implications

None.

Effective date

This law shall be effective immediately.