Proposed Amendments to Rules Governing City-Aided Limited-Profit Housing Companies
Proposed Rules: Closed to Comments (View Public Comments Received:27)
Statement of Basis and Purpose
The Mitchell-Lama Law (Article II of the Private Housing Finance Law) was enacted to address the "seriously inadequate" supply of "safe and sanitary" housing for families of low and moderate income. 41 N.Y. Priv. Hous. Fin. Law§ 11 (McKinney's 2002). Realizing that the necessary housing could not "readily be provided by the ordinary unaided operation of private enterprise," the law provides incentives to encourage development of such income housing. Id. Specifically, housing companies are provided with low-interest mortgage funding for construction and real estate tax exemptions. 41 N.Y. Priv. Hous. Fin. Law§§ 22-23. In exchange for these benefits, housing companies are subject to numerous statutory restrictions, as well as to extensive regulatory and supervisory oversight and control, including regulations concerning rent, profits, disposition, and tenant selection. See. e.g., 41 N.Y. Priv. Hous. Fin. Law§§ 27, 31, 32, 32-a. HPD is the supervising agency for New York City's municipally-aided Mitchell-Lama program.
Summary of Proposed Rule and Bases for Proposed Changes
Application Requirements and Procedures
- In addition to the requirement that applicants meet occupancy requirements at the time of application, requires applicants to meet the occupancy requirements at the time an apartment becomes available.
- Limits transferability of applications to spouses and/or children at least eighteen years of age who were on the original application, and limits applicants to one entry per lottery while prohibiting their inclusion in the family composition of another applicant selected in the lottery for a particular development. Multiple entries will result in disqualification from the lottery.
- Advises applicants of the thirty-day time frame within which to appeal a rejection from the housing company to HPD.
- Invalidates advertisements to open waiting lists that do not meet HPD requirements, and requires the housing company to publish a notice in at least two daily newspapers of general circulation that HPD has invalidated an advertisement. Also clarifies the content and posting requirements for waiting lists and prohibits putting someone who claims he or she was erroneously omitted from the waiting list onto such waiting list more than five years after the date of original application.
- Clarifies that veterans who are the applicants of record and are the heads of households, along with their surviving spouses, are entitled to preference in admission.
- Clarifies who is entitled to any refund of any portion of the application fee.
- Authorizes HPD to waive occupancy standards in order to fill vacancies in Mitchell-Lama apartments where there are no available candidates on the applicable waiting list and other requirements for admission, such as income, have been met. Currently, HPD can only waive occupancy standards for medical reasons.
Other Proposed Changes
- Eliminates succession rights for nephews, nieces, aunts and uncles, and will only authorize succession where the tenant/cooperator of record has either died or been relocated to a long term care facility. Applications for succession will not be considered unless the family member files an application within ninety days of the tenant/cooperator's death or relocation to a long term care facility. Any proposed successor other than a surviving spouse is required to move to the next available appropriately sized apartment. Under the proposed rule, only family members approved for succession would be allowed to become owners of shares in a mutual housing company development and signatories on the occupancy agreement.
- Increases the secondary wage earner deduction from $15,000 to $20,000 to align HPD's rules with what the State did in 2009 for the State Mitchell-Lama portfolio at 9 NYCRR 1727-2.3(d)(2). Both agencies are authorized to approve a larger secondary wage earner deduction pursuant to PHFL Section 31 (2)(a).
- To reflect rate increases for professional services, increases the maximum total fees payable to professionals hired by tenants associations to review rent increase applications.
- Establishes the procedures for the reconstitution of a Mitchell Lama development as a housing development fund company, including the requirements from the New York State Attorney General's Office and voting procedures.
- Updates the maximum brokerage commission schedules.
RuthAnne Visnauskas, Commissioner
October 4, 2013