What's happening
This bill creates a state-funded program to support small, affordable rental housing developments, especially in rural areas of New York.
Why it matters
Targets housing gaps in rural communities. By focusing on developments of 2-20 units in towns and villages with populations under 30,000, the bill addresses the unique challenge of creating affordable rental options where large developments aren’t practical or supported by existing infrastructure.
Supports local nonprofit involvement. Only not-for-profit housing or community development organizations are eligible to apply, ensuring that local, mission-driven groups—not profit-seeking developers—lead these projects, which may result in more community-tailored solutions and reinvestment of resources locally.
Makes funding accessible and forgiving. The initiative offers zero-interest, deferred-payment loans with the possibility of full forgiveness if all affordability requirements are met for a set period. This structure lowers financial barriers for nonprofits, incentivizes long-term affordability, and reduces risk for organizations providing housing.
Prioritizes rural areas and transparency. At least 60% of funds must go to rural projects, ensuring that the most underserved regions benefit. The bill also mandates feedback for unsuccessful applicants, promoting transparency and capacity-building among local organizations seeking to address housing needs.
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Who cares
Headline styles
Fund Small Rental Housing
Plain English, a few words. Used as the page title.
Sponsors
3 Co-sponsors
History
- Reported and committed to finance
- Print number 595a
- Amend and recommit to housing, construction and community development
- Referred to housing, construction and community development
- Returned to senate
- Died in assembly
- Referred to housing
- Delivered to assembly
- Passed senateVote 55–4
- Ordered to third reading cal.1520
- Committee discharged and committed to rules
- Reported and committed to finance
Show 1 earlier action
- 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.
Fund Small Rental Housing
In Assembly Committee · Housing · Sponsor Carrie Woerner
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
595--A
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sens. HINCHEY, ASHBY, JACKSON, MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- recommitted to the Committee on Housing, Construction and Community Development in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the private housing finance law, in relation to establishing the small rental housing development initiative
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 article 33 to read as follows:
ARTICLE XXXIII
SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE Section 1300. Legislative findings and statement of policy.
1301. Definitions.
1302. Small rental housing development initiative.
§ 1300. Legislative findings and statement of policy. The legislature hereby finds and declares that there exists in many rural areas of the state a substantial need for affordable rental housing of a size that is suitable to small communities with limited infrastructure. The findings set forth in article seventeen of this chapter, with respect to the special needs and problems of such areas and the significant potential role of locally based not-for-profit organizations in helping to meet such needs, are hereby reaffirmed. The legislature hereby determines that, in addition to the program of state support to help meet the administrative expenses of such organizations under article seventeen of this chapter, a further public need exists for state funding for the development of affordable rental housing of between two and twenty
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01745-02-5
units. It is the purpose of this article to encourage the acquisition, rehabilitation, and construction of affordable rental housing including in the rural areas of the state by establishing a dedicated program of such funding.
§ 1301. Definitions. For the purposes of this article, the following terms shall have the following meanings:
1. "Corporation" shall mean the housing trust fund corporation established in section forty-five-a of this chapter.
2. "Small rental housing developments" shall mean affordable rental apartment buildings of between two and twenty units for low to moderate income households.
3. "Rural area" shall mean cities, towns and villages having a population of less than thirty thousand as determined by the last federal decennial census.
4. "Eligible applicant" shall mean a housing or community development not-for-profit organization eligible to do business in New York state.
5. "Low to moderate-income household" shall mean a household with up to one hundred twenty percent of area median income.
6. "Period of affordability" shall mean the required length of time a project must meet affordability requirements pursuant to this article and to be specified in the project note and mortgage.
§ 1302. Small rental housing development initiative. 1. Applicants acquiring, rehabilitating, or constructing small rental housing developments shall be eligible for state funding in the form of deferred payment, at zero percent interest loans, due on sale. Such zero interest loans may be subject to forgiveness in accordance with the provisions of subdivision two of this section.
(a) The eligible applicant shall have a payback period for such loan of twenty years.
(b) The maximum per-unit subsidy shall be determined by the commissioner.
(c) Funds shall be used for the acquisition, rehabilitation, and construction of residential units and may be used for all rehabilitation and construction costs necessary for the building, including the construction of common areas used for the benefit of residents.
(d) Funds may be used to cover a part of or all costs required to acquire, construct, or rehabilitate a small rental housing development.
2. (a) Zero interest loans issued in accordance with subdivision one of this section shall be deferred for the period of affordability. If the eligible applicant, who is the recipient of a zero interest loan, remains in compliance with all program requirements for the entirety of the period of affordability, the zero interest loan may be forgiven and the mortgage lien placed against the property may be satisfied.
(b) If the property of an eligible applicant is sold during the period of affordability, the sum of any outstanding mortgage must be re-paid. The mortgage lien may be assumed by a new purchaser only if approved by the corporation, subject to any conditions or requirements set by the corporation.
(c) The regulatory agreement of the small rental housing initiative shall run with the property throughout the entirety of the period of affordability, regardless of any change in ownership.
(d) Awards made under this program shall be pursuant to a regulatory agreement, including rent setting and any and all rent increases during the affordability period.
(e) The developer shall be eligible for a developer's fee of up to fifteen percent of small rental development initiative funds pursuant to any requirements established by the corporation relating to such fees.
(f) At least sixty percent of the total funds awarded pursuant to this article in any fiscal year shall be allocated to projects located in rural areas of the state.
3. Applicants with proposals not selected for funding may request a review and debrief from the corporation of the reasons why the proposal was not selected for funding.
4. The corporation shall develop additional procedures and requirements related to the application and award of funding for projects pursuant to this article as deemed necessary or appropriate to implement the purposes and provisions of this article.
§ 2. This act shall take effect immediately.
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 estab- lishing the small rental housing development initiative
Purpose of the bill
The purpose of the bill is to codify the Small Rental Housing Develop- ment Initiative and set eligibility and define parameters for the program's implementation.
Summary of specific provisions
Section 1 of the bill amends the private housing finance taw by adding a new Article 33 that:
*Provides a statement of legislative findings and purpose (new private housing finance Law section 1300);
*Defines key terms (1301); and
*Provides parameters for the implementation of the Small Rental Housing Development Initiative (1302), including:
*applicants' eligibility for zero percent interest loans for construction of small rental hpusing;
*rules regarding sate of properties during the period of affordability;
* conditions of awards; and
*notification processes for unsuccessful applicants.
Section 2 of the bill sets the effective date.
JUSTIFICATION:.
The Small Rental Housing Development Initiative is a sorely needed fund- ing source to develop affordable rental housing of 20 units or less in rural communities throughout the state. The Small Rental Housing Devel- opment Initiative received $7M in annual funding in each of the FY 2022, 2023, and 2024 budgets, but the appropriation does not provide detailed parameters addressing eligibility requirements and implementation. Rural communities face an affordable housing shortage, plus they face addi- tional hurdles in developing rental projects scaled appropriately for the size of their communities. Many rural communities tack the water and sewer infrastructure needed to support larger rental housing develop- ments, the type that receive funding from a variety of sources, includ- ing federal, state, and private investment (through low income housing tax credits.)
For that reason, funding sources for rural community developments are fewer, including that the Small Rental Development Initiative has disproportionately funded developments in more urban areas. SRDI was specifically created to fill an unmet need for rural communities, as it can meetthe dual needs of creating affordable housing for current resi- dents and attracting and retaining workers for employers looking to expand or relocate into rural communities. This bill therefore targets a dedicated percentage of SRDI funding to eligible projects located in towns or cities with a population of thirty thousand or less.
Prior legislative history
2022 - S9356A referred to Rules / A10517 referred to Housing
2023 - S1685A referred to Finance / A2956 referred to Housing
2024 - S1685A referred to Rules / A2956 referred to Housing
2025 S595 passed Senate / A489 referred to Housing
Fiscal implications
None. This is existing funding for which the bill codifies the program and sets parameters.
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.