Increases allowable maximum income of persons occupying rental units otherwise eligible for tax abatement in certain cases

Summary of provisions

Section 1 of the bill amends section 467-b (3)(a) of the real property tax law, as amended by section 2 of chapter 188 of the laws of 2005 to maintain the current fifty thousand dollar combined household income limits that the local governing body may authorize, beginning on July 1, 2016, for the SCRIE program, The changes to paragraph 3 of section 467-b of the real property tax law proposed by this section one of the bill will take effect on the same date as the reversion of such section pursuant to section 17 of chapter 576 of the laws of 1974, as amended.

Section 2 of the bill amends section 4 of part U of chapter 55 of the laws of 2014, amending the real property tax law in relation to the SCRIE program, to eliminate the July 1, 2016 sunset provision enacted as part of the Fiscal Year 2014-2015 Budget, which would otherwise cause the income eligibility threshold to revert to $29,000 thereafter.

Section 3 of the bill amends section 467-b (3)(b) of the real property tax law, as amended by section 2 of chapter 188 of the laws of 2005 to maintain the current fifty thousand dollar combined household income limits that the local governing body may authorize, beginning on July 1, 2016 for the DRIE program. The changes to paragraph 3 of section 467-b of the real property tax law proposed by this section three of the bill will take effect on the same date as the reversion of such section pursuant to section 17 of chapter 576 of the laws of 1974, as amended.

Section 4 of the bill amends section 467-c (1)(m) of the real property tax law, as added by chapter 188 of the laws of 2005, relating to the

DRIE program. This section provides that beginning July 1, 2016, "person with a disability" is defined to include an individual receiving enumerated disability benefits whose income, when combined with the income of all other members of the household, does not exceed fifty thousand dollars. The changes to section 467-c (1)(m) of the real property tax law proposed by this section four of the bill will take effect on the same date as the reversion of such paragraph as provided in section four of chapter 129 of the laws of 2014, as amended.

Section 5 of the bill amends section 467 (3)(a) of the real property tax law, as amended by chapter 259 of the laws of 2009. For the SCHE program, beginning July 1, 2016, this bill permits localities to grant a fifty percent property-tax assessment reduction to senior property owners whose income, or the combined income of all owners of the property, does not exceed fifty thousand dollars.

Section 6 of the bill amends section 459-c (5)(a) of the real property tax law, as separately amended by chapters 187 and 252 of the laws of 2006 For the DHE program, beginning July 1, 2016, this bill permits localities to grant a fifty percent property-tax assessment reduction to disabled property owners receiving enumerated disability benefits whose income, or the combined income of all owners of the property, does not exceed fifty thousand dollars.

Section 7 of the bill sets forth the effective date.

Existing law

The current income eligibility limit for SCRIE and DRIE, which provide rent freezes for qualified seniors and disabled persons, is $50,000. This threshold is set to revert to $29,000 effective July 1, 2016. The SCHE and DHE programs currently provide a reduction, for property tax purposes, of between 5 percent and 50 percent of the assessed value of one-, two-, and three-family houses, condominiums, or cooperative apartments owned by qualified disabled persons or seniors. The current income eligibility limit for the full benefit (50 percent property tax reduction) is $29,000. To receive the smallest (5 percent) reduction, the combined income of all owners and their spouses cannot currently be more than $37,399. None of these programs are automatically adjusted for cost-of-living increases or inflation.

Justification

The SCRIE and DRIE programs provide a vital service by allowing eligible senior and disabled residents to remain in their homes and communities by keeping their rent affordable. SCRIE and DRIE freeze rents for low-income seniors and people with disabilities, respectively, living in rent-regulated housing who pay one-third or more of their income in rent Landlords are compensated for the full amount of the foregone rent through refundable real property tax abatements. The maximum income-eligibility limit for these programs was raised in 2014 to $50,000. However, without this legislation, which eliminates a sunset provision that will automatically take effect in 2016, the maximum income limit will revert to the 2009 eligibility ceiling of $29,000.

Similarly, the SCHE and DHE programs provide a property tax exemption of up to 50 percent of the assessed property value for senior residents who own one-, two-, or three-family homes, condominiums, or cooperative apartments and who will be at least 65 years of age in the year that they apply, The DHE program provides parallel relief where at least one owner has a documented physical or mental disability not due to the use of alcohol or illegal drugs. To qualify, all owners must occupy the property as their primary residence, with limited statutory exceptions, such as health-related inpatient status.

However, the SCHE and DHE programs were not included in the increased income limit discussed above. To be eligible for the 50 percent reduction, the combined income of all owners and their spouses cannot currently exceed $29,000. A "sliding scale" option permits localities to extend smaller assessed value reductions to owners with a combined income above $29,000 but less than $37,400 For example, an eligible senior or disabled homeowner with a combined income of $36,500 may receive a 5 percent reduction in the assessed value of their home for property tax purposes.

For SCHE and DHE, this legislation raises the maximum combined household income eligibility limit for a 50 percent reduction in property tax assessment from twenty-nine thousand dollars to fifty thousand dollars, effective July 1, 2016. Localities that utilize the current "sliding scale" (tiered relief) option will be able to extend lesser property tax relief (as little as a 5 percent reduction in assessed value) to eligible residents with a combined income below $58,400. As a result, the limit for receiving the full SCHE and DHE benefit will be aligned with adjustments already enacted by the legislature and the Governor for the SCRIE and DRIE programs. This bill would restore parity among these crucial programs.

Increases in the cost of living and the continued stagnation of wages make it difficult for many seniors and persons with disabilities to make ends meet, regardless of whether they rent or own their homes. Both low- and middle-income residents are subject to the burden of escalating costs. Senior citizens and those with disabilities often rely upon a fixed income, and homeowners typically have their primary wealth invested in their property. Moreover, elderly and disabled residents are often responsible for higher-than average healthcare costs.

The cost of living in New York City in particular makes it difficult for persons with low incomes to make ends meet. By exempting low-income seniors and the disabled from rent increases or as much as 50 percent of their property tax assessment, this bill will help prevent some of New York's most vulnerable residents from being forced to give up their homes.

This is not a local mandate as localities can determine the amount of the increase, if any.

Legislative history

2014: A2043B amended after Budget Bill A8555D (Part U) and after A9744 were enacted

Fiscal implications

None for the State and none mandated for local governments. Fiscal implications at the local level, if any, will be determined by localities.

Effective date

This act shall take effect immediately; provided that:

a. the amendments to subdivision 3 of section 467-b of the real property tax law made by sections one and three of this act shall take effect on the same date as the reversion of such section pursuant to section 17 of chapter 576 of the laws of 1974, as amended; and

b the amendments to paragraph m of subdivision 1 of section 467-c of the real property tax law, made by section four of this act shall take effect on the same date as the reversion of such paragraph as provided in section four of chapter 129 of the laws of 2014, as amended.