What's happening
This bill requires that reserve and surplus funds from the sale of limited-profit housing projects be used for capital improvements before new owners can increase rents.
Why it matters
Protects tenants from premature rent hikes. by ensuring new owners must use all existing reserve and surplus funds for necessary capital improvements before passing any related costs on to renters.
Increases financial accountability for new owners. of formerly limited-profit housing, requiring them to manage inherited funds transparently through escrow accounts dedicated solely to property upgrades.
Helps maintain property quality. by mandating that significant reinvestment in the building occurs before any increase in rent is considered, potentially preserving affordable housing standards and habitability.
Closes loopholes in current law. that might otherwise allow new owners to raise rents for improvements without first using available resources, thereby offering stronger consumer protections for residents.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Protect Housing Sale Funds
Plain English, a few words. Used as the page title.
Sponsors
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.
Use Sale Funds for Repairs
In Assembly Committee · Housing · Sponsor Steven Cymbrowitz
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3181
2017-2018 Regular Sessions
IN SENATE
January 20, 2017
Introduced by Sens. KRUEGER, BAILEY, HOYLMAN, MONTGOMERY, PERKINS, RIVERA, SERRANO -- 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 the sale of limited-profit housing projects
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The private housing finance law is amended by adding a new section 36-b to read as follows:
§ 36-b. Sale or other conveyance of project. Notwithstanding any inconsistent provision of law, upon the sale or other conveyance of a project by a company to any entity other than a company, the following requirements shall apply.
1. All reserve and surplus funds transferred by the company to the new owner must be held by such new owner in escrow accounts and may be used by such new owner solely for the purpose of making major capital improvements to the project.
2. No rental or other charge may be increased by the new owner to defray the cost of any major capital improvement unless and until all of such reserve and surplus funds have been expended to defray the cost of major capital improvements.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05986-01-7
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 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.