§ 576-C — Loans to housing development companies by a municipality

* § 576-c. Loans to housing development companies by a municipality.\n1. In addition to the powers granted to municipalities pursuant to this\narticle, a municipality, acting by its supervising agency, may make\nloans for the purposes of acquisition, rehabilitation or construction of\ndwelling accommodations to a non-profit housing development fund\ncompany, a wholly-owned subsidiary of such company, a partnership the\ncontrolling interest of which is held by such company and which has\nagreed to limit profits or rate of return of investors in accordance\nwith a formula established or approved by the company, or a private\ndeveloper which has agreed to limit profits or rate of return of\ninvestors in accordance with a formula established or approved by the\ncompany, which agrees to provide housing accommodations exclusively for\npersons and families of low income, at least thirty percent of whom are\nreferred to it by a municipality and have prior to their initial\noccupancy in such accommodations resided in emergency shelter facilities\noperated by or on behalf of the municipality or who are otherwise in\nneed of emergency shelter as determined by the municipality, providing,\nhowever, that in the case of a building acquired by such a company,\nsubsidiary, partnership, or developer the obligation to provide housing\naccommodations for such persons shall be applicable only to dwelling\naccommodations which are or become vacant after the date of acquisition.\nSuch loans may be made for such period of time and pursuant to such\nterms and conditions as may be required by the municipality, including,\nbut not limited to, terms and conditions providing that the lien created\nby the note and mortgage, and, if applicable, any regulatory agreement\nexecuted by the owner and such municipality or restrictive covenant\napproved by a supervising agency, may be recorded in an equal or\nsubordinate position, or subsequently made equal or subordinate, to a\nlien recorded by any private lender against the dwelling aided by the\nloan made pursuant to this article, and the supervising agency of such\nmunicipality may provide that the amount of the note and mortgage shall\nautomatically be reduced to zero in five equal decrements commencing on\nthe tenth year after the initial occupancy date, provided that, as of\nthe date of such reduction, such accommodations have been and continue\nto be owned and operated in a manner consistent with an agreement with\nthe municipality contained in such note and mortgage to provide housing\nfor such persons. Notwithstanding such provision as contained in the\nnote and mortgage, the loan shall be reduced to zero only if, prior to\nor simultaneously with delivery of such note and mortgage, the\nsupervising agency made a written determination that such reduction\nwould be necessary to ensure the continued affordability or economic\nviability of such housing project. Such written determination shall\ndocument the basis upon which the loan was determined to be eligible for\nevaporation.\n 2. Notwithstanding the provisions of, or any regulation promulgated\npursuant to, the emergency housing rent control law, the local emergency\nhousing rent control act, the emergency tenant protection act of\nnineteen seventy-four, or any local law enacted pursuant thereto, upon\ncompletion of the rehabilitation of any building used primarily for\nresidential purposes, in a jurisdiction in which rents are regulated\npursuant to any of the above laws and which is aided by a loan pursuant\nto this section made by the municipality, the supervising agency shall\nestablish the initial rent for each rental dwelling unit within the\nbuilding. All dwelling units within the building subsequent to\nestablishment of initial rents by the supervising agency shall be\nsubject to either the rent stabilization law of nineteen hundred\nsixty-nine or the emergency tenant protection act of nineteen\nseventy-four, or both, if applicable to the locality. The tenants in\noccupancy of such a dwelling unit regulated pursuant to any of the above\nlaws shall be offered a choice of a one or two year lease at the initial\nrents established by the supervising agency notwithstanding any contrary\nprovisions of, or regulations adopted pursuant to, the rent\nstabilization law of nineteen hundred sixty-nine and the emergency\ntenant protection act of nineteen seventy-four. The supervising agency\nshall cause all tenants in occupancy of each dwelling unit affected by\nthe provisions of this subdivision to be notified of and have an\nopportunity to comment on the contemplated rehabilitation. Such\nnotification shall advise such tenants of the approximate expected rent\nincrease and the subsequent availability of a one or two year lease.\nSuch notification and opportunity to comment shall be provided before\nthe rehabilitation and again after the construction is completed and\nbefore the establishment of the initial rents.\n 3. The supervising agency shall use its best efforts to ensure that\nactivities carried out pursuant to this article are structured so as to\nminimize the likelihood of any involuntary economic displacement of\ntenants who reside in multiple dwellings which are the subject of such\nactivities. However, if temporary physical displacement is required as a\ndirect result of rehabilitation work which is performed in such multiple\ndwelling receiving a loan pursuant to this article, suitable temporary\nrelocation arrangements shall be provided.\n * NB Effective until July 1, 2027\n * § 576-c. Loans to housing development companies by a municipality.\nIn addition to the powers granted to municipalities pursuant to this\narticle, a municipality, acting by its supervising agency, may make\nloans for the purposes of acquisition, rehabilitation or construction of\ndwelling accommodations to a non-profit housing development fund\ncompany, a wholly-owned subsidiary of such company, a partnership the\ncontrolling interest of which is held by such company and which has\nagreed to limit profits or rate of return of investors in accordance\nwith a formula established or approved by the company, or a private\ndeveloper which has agreed to limit profits or rate of return of\ninvestors in accordance with a formula established or approved by the\ncompany, which agrees to provide housing accommodations exclusively for\npersons and families of low income, at least thirty percent of whom are\nreferred to it by a municipality and have prior to their initial\noccupancy in such accommodations resided in emergency shelter facilities\noperated by or on behalf of the municipality or who are otherwise in\nneed of emergency shelter as determined by the municipality, providing,\nhowever, that in the case of a building acquired by such a company,\nsubsidiary, partnership, or developer the obligation to provide housing\naccommodations for such persons shall be applicable only to dwelling\naccommodations which are or become vacant after the date of acquisition.\nSuch loans may be made for such period of time and pursuant to such\nterms and conditions as may be required by the municipality, including,\nbut not limited to, terms and conditions providing that the lien created\nby the note and mortgage, and, as applicable, any regulatory agreement\nexecuted by the owner and such municipality, may be recorded in an equal\nor subordinate position, or subsequently made equal or subordinate, to\nthe lien recorded by any private lender against the dwelling aided by\nthe loan made pursuant to this article, and the supervising agency of\nsuch municipality may provide that the amount of the note and mortgage\nshall automatically be reduced to zero in five equal decrements\ncommencing on the tenth year after the initial occupancy date, provided\nthat, as of the date of such reduction, such accommodations have been\nand continue to be owned and operated in a manner consistent with an\nagreement with the municipality contained in such note and mortgage to\nprovide housing for such persons. Notwithstanding such provision as\ncontained in the note and mortgage, the loan shall be reduced to zero\nonly if, prior to or simultaneously with delivery of such note and\nmortgage, the supervising agency made a written determination that such\nreduction would be necessary to ensure the continued affordability or\neconomic viability of such housing project. Such written determination\nshall document the basis upon which the loan was determined to be\neligible for evaporation.\n * NB Effective July 1, 2027\n