§ 402-B — Power of authority to enter into mixed-finance transactions to continue viability of public housing

§ 402-b. Power of authority to enter into mixed-finance transactions\nto continue viability of public housing. 1. Legislative findings and\ndeclaration. The legislature finds and declares that the state has a\nvital interest in the continued viability of public housing. It is\nnecessary to ensure that public housing continues to serve low-income\nindividuals and families who would otherwise face homelessness or be\nforced into unsafe or unsanitary housing. Public housing functions as a\nsafety net for persons most in need of safe, decent and affordable\nhousing. The legislature further finds that the New York city housing\nauthority has made, and continues to make, a concerted effort to provide\npublic housing to individuals and families in need. Certain projects\nowned by the New York city housing authority have suffered deterioration\nover time, and the housing authority does not have sufficient resources\nto address this deterioration. An infusion of private capital is\nnecessary to ensure the continued success and long term viability of\nthese projects. The legislature further finds that bringing state\nfinanced public housing operated by the New York city housing authority\nwithin the public housing subsidized by the federal government, by\nutilizing the federal American Recovery and Reinvestment Act of 2009,\nwill allow the New York city housing authority to enter into mixed\nfinance transactions, which will result in receiving new operating and\ncapital subsidies from the federal government and preserve the units as\npublic housing. The legislature also finds that tenants living in the\nprojects that have been financed by the city of New York, commonly known\nas Marble Hill Houses, St. Mary's Park Houses, Bay View Houses,\nBoulevard Houses, Linden Houses and Samuel Houses, located in the city\nof New York, counties of Bronx, Kings and New York, will, through\nmultiple contracts and agreements among the New York city housing\nauthority, investment partners and the federal government, be afforded\nthe same protections as tenants living in the projects listed in\nsubdivision two of this section. The legislature therefore finds and\ndeclares that enactment of this section would enable redevelopment and\nrehabilitation of those certain New York state and New York city\nfinanced projects owned by the New York city housing authority, and the\ncontinued operation of said projects for persons and families of low\nincome.\n 2. Upon approval by the commissioner of the division of housing and\ncommunity renewal, the New York city housing authority is hereby\nauthorized to sell or lease all or part of the residential buildings\nwithin the projects commonly known as Marlboro Houses, Chelsea Houses,\nCastle Hill Houses, 344 East 28th Street, Amsterdam Addition, Bushwick\nHouses, Stephen Wise Towers, Arthur H. Murphy Houses, Baychester Houses,\nJonathan Williams Plaza, Drew-Hamilton Houses, Independence Towers,\nRutgers Houses, Stapleton Houses and Manhattanville Houses, located in\nthe city of New York, counties of Bronx, Kings, New York and Richmond,\nupon such terms and conditions and in such manner as the New York city\nhousing authority may deem appropriate and in compliance with the\nprovisions of this section. The commissioner of the division of housing\nand community renewal shall not grant such approval unless he or she\nmakes a finding that such sale or lease will enable the projects to be\nredeveloped and operated in such manner as to provide decent, safe and\nsanitary housing within the financial reach of persons and families of\nlow income and a further finding that new federal assistance is\nsignificantly more likely to be available to the projects listed in this\nsection if such approval is granted. There shall be no requirement for a\nfinding by the commissioner of the division of housing and community\nrenewal that provisions have been made to pay or otherwise assure\npayment or retirement of all bonds, notes and other obligations\nheretofore issued to finance the projects or a portion thereof, provided\nthat the sale or lease of the projects is part of a comprehensive plan\nof rehabilitation and/or restructuring which includes the provision of\nhousing for persons and families of low income. The sale or lease of all\nor part of the residential buildings within the projects enumerated in\nthis section shall be made subject to all pertinent federal statutory,\nexecutive orders, consent orders and regulatory requirements, as those\nrequirements may be amended from time to time, and contracts and\nagreements which shall be recorded against and which shall run with the\nland, including a regulatory and operating agreement and a declaration\nof restrictive covenants requiring the operation and maintenance of such\nresidential projects in compliance with federal requirements, and\namendments to a certain mixed-finance amendment to the consolidated\nannual contributions contract between the New York city housing\nauthority and the United States department of housing and urban\ndevelopment (collectively, the "applicable public housing\nrequirements").\n 3. (a) All applicable public housing requirements pertaining to\nfederal public housing projects shall apply to the projects listed in\nsubdivision two of this section, including but not limited to all\nprocedural and substantive due process requirements, restrictions on\nevictions except for just cause, the right to automatic renewals of\nleases, and the right to meaningful input in matters concerning tenants;\nSection 8 units shall be subject to the voluntary conversion agreement\nand management plan approved by the United States department of housing\nand urban development on September eleventh, two thousand eight, and as\nit may be amended from time to time. The public housing and Section 8\nleases of tenants in occupancy of the projects listed in subdivision two\nof this section on the date of sale or lease of such projects shall\nremain in effect, except as such leases may be modified or assigned to\nreflect changes in the ownership of project buildings. Each such tenant\nshall enjoy the same rights and obligations as other tenants with public\nhousing leases occupying dwelling units in the housing projects owned\nand operated by the New York city housing authority that are not listed\nin subdivision two of this section, or pursuant to Section 8 leases\nsupported by Section 8 vouchers, except as provided by paragraph (b) of\nthis subdivision. Each project owner and the New York city housing\nauthority shall be jointly and severally obligated to provide and\nprotect the rights set forth herein.\n (b) All units in projects listed in subdivision two of this section\nwhere there has been an allocation of federal low-income housing tax\ncredits, during the required federal regulatory compliance periods\napplicable to such federal low-income housing tax credits, shall upon\nvacancy be rented by persons or families whose income does not exceed\nsixty percent of area median income at a rent, including utilities, not\nto exceed thirty percent of the household's adjusted gross income. All\nother units shall upon vacancy be rented by persons or families whose\nincome does not exceed eighty percent of area median income at a rent,\nincluding utilities, not to exceed thirty percent of the household's\nadjusted gross income. All income guidelines applicable to federal\npublic housing projects shall apply to projects listed in subdivision\ntwo of this section. Each such tenant shall enjoy the same rights and\nobligations as other tenants with public housing leases occupying\ndwelling units in the housing projects owned and operated by the New\nYork city housing authority that are not listed in subdivision two of\nthis section, or pursuant to Section 8 leases supported by Section 8\nvouchers, except as provided by this paragraph.\n (c) All tenants who reside in the housing projects listed in\nsubdivision two of this section prior to the sale or lease of such\nproject shall be entitled to remain in their current apartments,\nprovided that such tenant or tenants comply with the terms and\nconditions of their leases and meet all applicable federal income\nguidelines. Each such tenant shall enjoy the same rights and obligations\nas other tenants with public housing leases occupying dwelling units in\nthe housing projects owned and operated by the New York city housing\nauthority that are not listed in subdivision two of this section, or\npursuant to Section 8 leases supported by Section 8 vouchers, except as\nprovided by paragraph (b) of this subdivision.\n (d) For each project listed in subdivision two of this section, all\nunits occupied by persons of low income shall be physically integrated\nwith all other units in the project. They shall share common means of\naccess, services and amenities equally with all other units and shall in\nno way be physically or otherwise set apart from all other units in the\nproject.\n (e) All prospective public housing and Section 8 tenants shall be\nselected from a waiting list which shall be maintained by the New York\ncity housing authority in compliance with the federal public housing and\nSection 8 laws and all applicable rules and regulations. The New York\ncity housing authority and each respective project owner shall screen\ntenants and jointly have final approval over tenant selection all in\naccordance with aforementioned laws, rules and regulations. All\nprospective public housing tenants shall be taken from the waiting list\nin the order in which they applied for the size appropriate unit,\nsubject however to preferences and priorities provided for in the public\nhousing law and all applicable rules and regulations.\n (f) The entity that acts as the managing member or general partner of\nthe respective owner of each project listed in subdivision two of this\nsection following transfer of such project, shall at all times be a\nnot-for-profit housing development fund corporation wholly owned by the\nNew York city housing authority and shall be established under article\neleven of the private housing finance law. The board of directors of\nsuch housing development fund corporation shall be composed of the\nchairperson of the New York city housing authority and the duly\nappointed members of such authority.\n (g) The entity that owns any project or assists in the management of\nany project may include an entity exempt from federal income taxes under\nsection 501(c)3 of the Internal Revenue Code of 1986 as amended, or its\nwholly owned subsidiary.\n (h) The provisions of this section may be enforced by any party\naggrieved by a violation of such provisions.\n (i) In the case where there is an allocation of federal low income\nhousing tax credits in connection with a sale or lease of the project,\nthe fee payable to the project developer shall not exceed twelve percent\nof the total development cost, provided however, that the fee payable to\nsuch developer may be increased to the maximum percentage permitted\nunder regulations promulgated by the division of housing and community\nrenewal if the developer assumes additional financial risk. Such\nincrease shall not be granted (i) for risk the developer is customarily\nrequired to assume or guarantees which the developer is customarily\nrequired to provide by industry practice, (ii) for any risks or\nguarantees which parties other than the developer would ultimately bear,\nor (iii) if the cost of such risks or guarantees would be paid from\ngovernmental grants, loans, subsidies or other governmental funds. The\nforegoing limitation shall not apply to any portion of a developer fee\npaid to the housing authority.\n (j) The provisions of this section shall be applicable to each of the\nprojects delineated in subdivision two of this section commencing on the\nclosing date of the sale or lease of each respective project in\ncompliance with applicable law and shall be binding on all owners and\noperators of such project.\n 4. State subsidies available to the projects listed in subdivision two\nof this section in connection with the bonds, notes or other obligations\nheretofore issued to finance the cost thereof may, subject to annual\nappropriation and upon compliance with the provisions of this section,\ncontinue to be used to pay the debt service on such bonds, notes or\nother obligations, subject to such terms and conditions as the\ncommissioner of the division of housing and community renewal may deem\nappropriate.\n 5. The New York city housing authority shall be required to develop\nand circulate a notice to all tenants of public housing projects listed\nin subdivisions one and two of this section. The notice shall contain\ninformation regarding the transfer and federalization process, as well\nas notice that tenants' rights to occupancy and due process shall\ncontinue as they existed prior to the transfer.\n 6. The New York city housing authority, shall provide the commissioner\nof the division of housing and community renewal, the speaker of the\nassembly, the temporary president of the senate, the minority leader of\nthe assembly, the minority leader of the senate, the chair of the\nassembly housing committee, and the chair of the senate housing,\nconstruction, and community development committee copies of the annual\nproject activity report or any substantially similar annual report that\nit is required to submit to the United States department of housing and\nurban development that is related to the projects listed in subdivisions\none and two of this section.\n