Relates to rentals in projects provided under limited-profit housing companies; repealer

Title of bill

An act to amend the private housing finance law, in relation to rentals in projects provided under limited-profit housing companies and to repeal subdivision 5 of section 31 of such law, relating to continued occupancy by certain tenants in such projects

Summary of provisions

This bill amends Section 31 of the Private Housing Finance Law to ensure that Mitchell-Lama developments are able to continue to be a resource for affordable housing by allowing the developments to increase the existing surcharge requirements.

This bill provides that in municipally-aided projects in cities with a population of one million or more, any person or family with incomes above the income limits determined pursuant to Subdivision 2 of Section 31 of the Private Housing Finance Law shall, with the approval of the supervising agency, pay a surcharge in accordance with a surcharge schedule to be promulgated by such supervising agency, capped at no more than 200% of the existing rent. The bill also removes the statutory provisions that mandate, in certain circumstances, the removal of occupants in all Mitchell-Lama developments who remain above the income limits.

Reasons for support

The Mitchell-Lama Program was established in 1955 to provide affordable housing to middle income New Yorkers. There have been expanded efforts to preserve the physical and financial health and affordability of Mitchell-Lama developments through various mortgage refinancing options and interest repair loans from the City of New York Department of Housing Preservation and Development and the Housing Development Corporation. Approximately 35,000 Mitchell-Lama dwelling units have been preserved under the Mayor's Housing New York Plan.

Currently, unlike in other affordable housing programs, tenants in Mitchell-Lama developments are not required to pay a certain percentage of their income toward rent. For example, many similar programs require that tenants pay 30% of their income toward rent. In addition, at present, the maximum surcharge that may be assessed against Mitchell-Lama tenants earning the maximum allowable income is capped at 50% of base rent.

The proposed legislation restructures the surcharge provisions for municipally-aided Mitchell-Lama developments in cities with a population of one million or more. The maximum surcharge for both rental and cooperative developments would be increased from 50% to 200%.