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History
- Referred to housing, construction and community development
- Referred to housing, construction and community development
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Provides that upon sale of a limited-profit housing company project, reserve and surplus funds must be held in escrow and dedicated to major capital improvements
In Assembly Committee · Housing · Sponsor Keith L.T. Wright
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S2870
Title of bill
An act to amend the private housing finance law, in relation to the sale of limited-profit housing projects
Purpose or general idea of bill
This bill provides that upon sale of a limited-profit housing company project, reserve and surplus funds must be held in escrow and dedicated to major capital improvements.
Summary of specific provisions
The bill amends the Private Housing Finance Law (PHFL) by adding a new section 36-b. That new section provides that if a limited profit housing company incorporated under Article II of the PHFL sells a project to any entity other than a limited-profit housing company, then all reserve and surplus funds transferred to the new owner must be held in escrow for the purpose of making major capital improvements to the project. The bill further provides that the new owner may not increase rents or other charges, based on new capital improvements, until after the reserve and surplus funds held in escrow have been exhausted.
Justification
The Mitchell-Lama program was established to create affordable housing and guarantee developer profits of 6% on investments. In the event of buyouts by owners of Mitchell-Lama developments, owners of limited profit housing companies might transfer reserve or surplus monies to the private sector, and those funds could - without the provisions contained in this bill- be used in a manner contrary to the spirit and purpose of the Mitchell-Lama program and the law creating it.
In order to ensure that monies which rightfully belong to residents in limited profit housing companies are used to improve those buildings, this bill would require that reserve or surplus funds be placed in an escrow account if a housing company opts to buyout of the Mitchell-Lama program, and limits the purpose for which the funds held in escrow may be used.
Fiscal implications
None.
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.