What's happening
This bill requires stricter rules for dissolving or reconstituting mutual housing companies in New York City, including higher voting thresholds and budget restrictions.
Why it matters
Raises the bar for dissolving mutual housing companies by requiring approval from 80% of all dwelling units (including vacant ones), making it significantly harder for a small group to initiate dissolution or privatization.
Prohibits the use of operating funds for any activities or services related to dissolution (like legal fees, feasibility studies, or offering plans), which reduces financial risk to the cooperative and aims to prevent residents’ maintenance fees from subsidizing efforts that could eliminate affordable housing.
Imposes a five-year waiting period between failed dissolution votes, protecting against repeated, potentially divisive votes that could destabilize the community or pressure residents into changing their stance.
Mandates the NYC Department of Housing Preservation and Development to create specific, enforceable rules for these processes, ensuring uniform protections and transparency across all mutual housing companies in the city.
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Who cares
Headline styles
Toughen Co-op Dissolution Rules
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 26
1 Co-sponsor
History
- 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.
Regulate Co-op Dissolution Rules
In Assembly Committee · Housing · Sponsor Linda Rosenthal
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8132
IN SENATE
March 25, 2020
Introduced by Sen. KAVANAGH -- 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 directing the department of housing preservation and development of the city of New York to promulgate rules and regulations regarding mutual housing companies considering dissolution and/or reconstitution
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 35-a to read as follows:
§ 35-a. Rules and regulations regarding dissolution. The commissioner or supervising agency shall promulgate rules and regulations regarding mutual housing companies considering dissolution and/or reconstitution pursuant to section thirty-five of this article. Such rules and regulations shall at a minimum include:
1. A requirement that any vote for dissolution of the company, or for authorization of a feasibility study, a preliminary offering plan which may be referred to as a red herring, a final offering plan which may be referred to as a black book, a proxy statement, or to send a notice of intent to dissolve to the commissioner or supervising agency shall require the approval of eighty percent of all dwelling units, both occupied and unoccupied, owned by the mutual housing company.
2. A requirement that no funds from the operating budget of the mutual housing company shall be used for the preparation or distribution of a feasibility study, a preliminary offering plan or red herring, a final offering plan or black book, a proxy statement, or a notice of intent to dissolve; or to pay for any services related to evaluation of, preparation for, or execution of dissolution and/or reconstitution pursuant to section thirty-five of this article, including but not limited to legal services.
3. No vote under subdivision one of this section, shall occur within five years following a vote under subdivision one of this section that failed.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14536-04-0
S. 8132 2
§ 2. This act shall take effect immediately and shall be applicable to all votes and activities pursuant to section 35-a of the private housing finance law that take place on or after such date on which it shall have become a law.
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 direct- ing the department of housing preservation and development of the city of New York to promulgate rules and regulations regarding mutual housing companies considering dissolution and/or reconstitution
Purpose
This bill amends the private housing finance law by adding a new section, 35-a. This section requires that any vote of dissolution by a mutual housing company receive approval from at least eighty percent of all occupied and unoccupied units.
Summary of specific provisions
Section one of the bill amends the private housing finance law by adding a new section, 35-a. This section requires HPD to promulgate rules and regulations regarding the dissolution and/or reconstruction of mutual housing companies.
Subdivisions 1-3 of the new section 35-a dictate that the rules promul- gated by HPD must include, at a minimum, the following:
* that any vote for a feasibility study, preliminary offering plan, final offering plan, proxy statement, dissolution, or notice of intent to dissolve must receive the approval of at least eighty percent of all occupied and unoccupied units;
* that no funds from the operating budget be used for the preparation or distribution of any plans, studies, services, or for the execution of dissolution and/or reconstitution pursuant to section 35, including but not limited to legal services; and
* that no vote covered by subdivision one of this section shall occur within five years following any previous failed vote under subdivision one.
Section two of the bill sets forth the effective date.
Justification
Nearly 65 years ago, State Senator MacNeil Mitchell and Assemblymember Alfred Lama passed landmark legislation to provide private developers with incentives to invest in affordable housing. Today, these units, aptly named Mitchell-Lama apartments, have accumulated waitlists that can last up to a decade. Recently, as more developers voluntarily privatize their buildings and bring those units to market rate, this program-designed to help end the housing crisis-is now being utilized in a way that exacerbates the city's affordable housing problems. This bill seeks to correct this unfortunate trend.
When a Mitchell-Lama building is privatized, it loses all tax abatements and the owners must refinance under current market rates. While there are tenants who may want the potential profit offered by privatization, for those tenants who want to remain in their homes, going private means substantial increases in both maintenance costs and interest rates. Additionally, as more and more units are sold off at market rate, fewer affordable housing options exist in the city. By subjecting dissolution or reconstitution actions to an 80% approval threshold, this bill would prevent the unwanted privatization of Mitchel-Lama buildings across the city, placing more power in the hands of residents to decide what works best for themselves and their families.
Legislative history
New bill.
Fiscal implications
Undetermined.
Effective date
This act shall take effect immediately and shall be applicable to all votes and activities pursuant to section 35-a of the private housing finance law that take place on or after such 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.