What's happening
This bill restricts the voluntary dissolution of mutual housing companies, requiring their tax exemptions to expire first.
Why it matters
Prevents mutual housing companies from dissolving while still receiving valuable municipal tax exemptions. , ensuring that these benefits are only available to active, operating entities rather than those planning to sell or convert their properties.
Closes a potential loophole that could lead to the privatization of affordable housing stock. before the end of its public benefit period, helping to preserve long-term affordability for residents and communities.
Creates a clear distinction between mutual and non-mutual (typically investor-owned) housing companies. , applying stricter controls to those with resident ownership and governance to promote community stability and safeguard public investment.
May impact shareholders or residents looking to dissolve their mutual housing company for financial gain. , delaying such actions until all public support via tax exemption has ended, which could affect the timing and attractiveness of dissolution plans.
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Who cares
Headline styles
Tighten Mutual Company Dissolution
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
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.
Limit Mutual Company Dissolution
In Assembly Committee · Housing · Sponsor Linda Rosenthal
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2369
2017-2018 Regular Sessions
IN SENATE
January 13, 2017
Introduced by Sen. ALCANTARA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development
AN ACT to amend the private housing finance law, in relation to when the voluntary dissolution of a mutual company shall be permitted
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 2 of section 35 of the private housing finance law, as amended by chapter 229 of the laws of 1989, is amended to read as follows:
2. A company, other than a mutual company, aided by a loan made after May first, nineteen hundred fifty-nine, may voluntarily be dissolved, without the consent of the commissioner or of the supervising agency, as the case may be, not less than twenty years after the occupancy date upon the payment in full of the remaining balance of principal and interest due and unpaid upon the mortgage or mortgages and of any and all expenses incurred in effecting such voluntary dissolution. In the case of a mutual company aided by a loan made after May first, nineteen hundred fifty-nine, voluntary dissolution without the consent of the commissioner or of the supervising agency is permitted only after its municipal tax exemption, and any grant of an extension thereof, shall have expired.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05483-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the private housing finance law, in relation to when the voluntary dissolution of a mutual company shall be permitted
Purpose
To prohibit the dissolution and/or reconstitution of any mutual company, organized under Article II of the PHFL, until after its municipal tax exemption and any grant of an extension thereof shall have expired
Summary of provisions
Section One amends subdivision 2 of section 35 of the private housing finance law
Section Two sets forth the effective date.
Justification
There is currently a severe shortage of affordable housing in New York and this situation is projected to continue well into the future. Along with vacancy decontrol, the privatization of projects organized under the PHFL is contributing to the further loss of affordable, rent-regulated apartments.
Under current provisions of the PHFL, shareholders in mutual companies, i.e., co-ops organized under Article II, can vote to withdraw from the Mitchell-Lama program at the expiration of any restrictive covenants or 20 years, whichever is greater.
Legislative history
2015-2016: Referred to housing,construction, and community development
Fiscal implications
None.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.