There are less than 10 days left of session before the Legislature goes home until next year but there are still several uncontroversial housing bills that should be a priority for lawmakers right now. These bills would update existing laws to allow New York City to continue moving forward on its affordable housing agenda and protect homeowners from predatory practices:
421-a Construction Deadline Extension – State legislation is necessary to extend the deadline to complete construction from 2026 to 2030 for 421-a projects already in the pipeline to ensure that affordable housing promised to communities is delivered. The most-recent 421-a program required that developers build foundations by June 30, 2022 and complete construction by 2026 in order to qualify for the program. However, projects are facing unexpected delays coming out of the pandemic with staffing shortages and economic challenges. Impacted projects, including those in the recent Gowanus rezoning, will not be able to complete construction by 2026, putting the affordable units at risk.
Rachel Fee, Executive Director of NYHC and Michelle de la Uz, Executive Director of the Fifth Avenue Committee explain in an City Limits op-ed that mixed income projects all across the city need this deadline extended, especially in Gowanus where thousands of affordable units are at stake.
“Gowanus is a critical example, but there are other mixed-income projects with much needed affordable housing comprising thousands more apartments across the city—many in high opportunity communities, and all of which were duly approved through the city’s land-use process—that need the deadline extended in order to happen.”
Housing Affordability, Resiliency, and Energy Efficiency Investment Act (HAREEIA): S2985C/A6655 (Kavanagh/Rosenthal) – would modernize the NYC Department of Housing Preservation and Development’s (HPD) loan authority which is necessary for the City to achieve housing goals. The current loan authority, which has not been updated for 50 years places significant limitations on HPD’s ability to support a wide range of housing needs. HAREEIA would allow HPD to:
- Facilitate more affordable housing by increasing HPD’s lending terms from the current 30 to 40 years with extensions. With rising interest rates, it’s important for HPD to be able to utilize 40 year terms to lower costs, allowing buildings to support deeper affordability. There are also at least 75 HPD projects with 30-year loan limits coming due. If HPD can’t extend these loans, the affordability and stability of this stock will be at risk.
- Strengthen climate resiliency in our housing stock by specifying that HPD’s loan authority extends to climate resiliency improvements, allowing it to proactively loan solely for resiliency improvements such as solar panels, moving utility systems to roofs, elevating foundations to prepare for potential flooding, etc
- Support Community Land Trusts (CLTs) and other projects that use a ground lease structure where HPD currently has very limited authority
Expand the number of New Yorkers who can afford down payments by allowing HPD to provide down payment assistance using City dollars. They can currently only use federal dollars for this purpose
- Assist more homeowners with needed improvements by removing the dollar caps on loans so HPD can make loans based on current market conditions. Currently HPD cannot loan more than $35,000 for moderate rehabs, and $60,000 for 1-4 unit homes.
- Finance non-residential facilities that are necessary to create or preserve affordable housing such as a Mitchell-Lama parking garage redevelopment
New J-51 Preservation Tax Incentive: S4709A (Kavanagh) would update the expired J-51 program by updating allowable costs, streamlining the program to make benefits more predictable, target low-cost and affordable housing and include additional tenant protections to ensure compliance. A new J-51 program is vital to maintaining the quality and long-term viability of the city’s low-cost multifamily housing stock especially when many building owners deferred maintenance during the COVID-19 pandemic, labor and material costs have increased dramatically and interest rates continue to rise. The new program would:
- Provide an abatement that covers up to 70% of the lesser of the certified reasonable cost of the eligible work or the amount spent. Abatement value may be spread over 12-20 years, using a max of 8.33% of value per year The annual abatement also may not exceed 50% of the amount of taxes payable in such 12-month period.
- Target low-cost affordable buildings in which at least 50% of the units have rents affordable to households below 80% of area median income as well as Mitchell-Lama and government-subsidized housing and homeownership with assessed value not exceeding $45,000/unit.
- Require qualifying units and all other units that are subject to rent regulation at the time of application to remain so for the duration of the benefit. Mitchell-Lama and Article V co-ops must agree to remain in their respective programs for at least 15 years or the expiration of their Article V exemption. It prevents owners from receiving Major Capital Improvement (MCI) increases and J-51 benefits for the same work. To receive benefits, owners must certify that they have not harassed tenants and if they engage in any tenant harassment after benefits start, they can be revoked
Establish a crime of deed theft and expand opportunities for victims to receive justice: S6569 (Myrie) S6577/A6656 (Kavanagh/Weinstein). Deed theft is a growing problem that predominantly targets Black and Brown homeowners, and under New York’s current laws, opportunities for prosecutors to hold deed thieves accountable are limited.
S6569 (Myrie) would:
- Establish a crime of deed theft –
- Deed Theft in the Second Degree, a Class C Felony: Theft of one real property.
- Deed Theft in the First Degree, a Class B Felony: Theft of one residential real property or the theft of two or more real properties. The maximum penalty for Deed Theft in the First Degree would be a mandatory sentence of one to three years in prison, up to 25 years.
- Grant the Office of the Attorney General (OAG) concurrent original jurisdiction to prosecute deed theft crimes alongside District Attorneys throughout the state. OAG currently does not have jurisdiction to prosecute criminal deed theft cases without a referral, and sometimes referrals can be difficult to secure when a homeowner’s complaint is submitted directly to OAG.
- Extend the statute of limitations from 5 years to 8 years. Often, victims of deed theft are not aware of the crime until after it has occurred. Extending the statute of limitations will allow for more time to identify and investigate cases and make it less likely for prosecutors to lose the ability to prosecute.
S6577/A6656 (Kavanagh/Weinstein) would:
- Void Good Faith Purchaser Protections – When someone illegally steals the deed to a person’s home and then sells it to an innocent third party that new buyer is considered a “good faith purchaser” and the law currently protects their right to the property, regardless of how the scammer obtained it. As a result, homeowners who have been evicted as a result of a deed theft scam are often unable to get their homes back, even if the court finds the scammer guilty of deed theft. This legislation enables prosecutors to flag properties where a deed theft has taken place or is suspected by to allowing them to file a legal action. If a scammer then attempts to take out a loan against the property, banks or title insurance companies will see the red flag and know not to provide a loan. It also eliminates a potential good faith purchaser’s protected claim to the home, as they would have encountered the red flag in attempting to buy the property from the seller, and therefore would have known they were buying a home from a seller whose ownership was in dispute.
- This legislation also includes a provision to void good faith purchaser protections. Typically, when a home is sold and the deed is transferred legally, the rightful homeowner and seller either pays off the rest of the existing mortgage on their house with the funds from the sale, or the mortgage is transferred to the new owner. When scammers illegally steal the deed to a home, the homeowner’s mortgage is often not paid off, as the home was stolen, not sold. In cases where a third party purchased a property where the mortgage was neither transferred nor paid, this legislation would void that buyer’s claim to the property, enabling it to be returned to the rightful homeowner.
- Stay Eviction Proceedings – Currently when a deed thief attempts to evict the rightful homeowner, that eviction case goes to housing court where they cannot determine whether or not the evictor is actually the rightful owner of the property. The bill allows for the stayof an eviction proceeding in housing court when the rightful homeowner can show reasonable evidence that there is an issue with the title of the property or a potential deed theft in progress. Homeowners would be able to pause their evictions in housing court until the suspected deed theft case has been litigated.
- Expand Existing Protections – Currently the Homeowner Equity Theft Prevention Act (HETPA) allows homeowners in distress the opportunity to cancel any contract to sell their property, whether they signed it knowingly or a scammer took advantage of their vulnerability. However, these protections are currently only available to homeowners whose properties are in foreclosure or on the tax lien sale list, but not to homeowners whose properties are on the utility lien sale list. This bill would expand the protectionsto include homeowners with active utility liens.