NYSAFAH ADVOCACY & TESTIMONY
State Budget and Legislative Priorities – 2024 Session
Rescue affordable housing at risk of default ($250 million)
- Many affordable buildings are in grave financial condition – and are at risk of failure – due to substantial rental arrears and increased insurance and security costs, and lenders have seen an increase in defaults across the affordable housing portfolio.
- Recommendation: Appropriate $250 million in capital funding in the 2024 budget specifically to preserve at-risk affordable housing. These funds will allow the NYS Division of Homes and Community Renewal (HCR) to rescue troubled buildings and preserve vital units that New York cannot afford to let disappear.
Reform state insurance law
- Affordable housing in New York has seen a massive rise in insurance rates, which is endangering such housing.
- Discrimination: Insurance carriers discriminate against affordable housing, housing in urban areas where crime rates are higher, and landlords that rent to Section 8 voucher holders.
- Liability: Enormous awards, in addition to claims from New York’s antiquated “Scaffold Law,” have dramatically increased premiums. New York is also one of only two states that does not have a statute of repose for construction defects, which significantly increases insurance premiums.
- NYSAFAH supports S7298/A7910 (Sen. Kavanagh / AM Weprin) which would prohibit discrimination against affordable housing in the insurance market.
- NYSAFAH strongly supports Scaffold Law reform to adopt a comparative negligence standard, and residential premises liability reform to halt the exodus of insurance carriers from the NY market.
- NYSAFAH supports A4549 (AM Pretlow) which would create a 10-year statute of repose for construction defects.
Streamline SEQRA for infill, sewered multifamily housing
- The environmental review mandated for new housing developments by state law is strategically used to delay projects for years. New York is one of only six states that requires environmental review for zoning changes. Wealthy residents often block affordable housing with spurious litigation, such as in Sag Harbor.
- Recommendation: Streamline SEQRA for multifamily housing developments by allowing projects under appropriate thresholds to be built using a streamlined process that requires best practices for site testing and evaluation, in appropriate infill areas that have access to sewers. A similar proposal has been introduced as S925/A4933 (Sen. May / AM Kelles).
Standardize property tax for affordable housing including replacing 421a
- Local property taxes are often an impediment to affordable housing since affordable housing rents simply cannot be sustained if there are high tax rates. If a locality does not provide a tax reduction or a Payment In Lieu of Taxes (PILOT) for a project, then the affordable development will not be built.
- Recommendation: Establish a standardized property tax programs for all affordable housing, including affordable rental and homeownership and replace 421-a in New York City to spur affordable housing development in the five boroughs.
- For rental buildings, such tax reduction should be based on Erie County’s policy of 5% of shelter rent for 60% area median income (AMI) buildings; 3% of shelter rent for 50% AMI buildings.
- For affordable homeownership, the taxes should be based on the subsidized sales price, as is proposed in S6255/A6176 (Sen. Hinchey / AM Barrett) which NYSAFAH strongly supports.
Update the New York State Historic Tax Credit
- State historic tax credits provide critical capital to affordable housing projects that rehabilitate historic buildings. However, because the same investor must take all the tax credits in the deal, including federal historic tax credits, state historic tax credits, and federal Low-Income Housing Tax Credits, the price of all the credits is greatly diminished, resulting in less affordable housing and preservation.
- Recommendation: Update the state historic tax credit program to allow the credit to be sold to a different investor from the federal historic tax credit investor, as is permitted in 24 other states. Additionally, the program should allow a nonprofit partner to sell the credit to further enhance the value of the credit.
- NYSAFAH is working with Sen. Kavanagh to introduce legislation to address this issue.
Preserve upstate public housing
- Public housing authorities have seen a massive disinvestment in capital funding by the federal government over the last twenty years. Many public housing authorities have not had repairs or necessary upgrades in many years, with an estimated capital deficit of $400 million. Sixteen public housing authorities are currently working to upgrade their facilities.
- Recommendation: Appropriate $150 million in capital funding for public housing authorities outside of NYC in the 2024 State budget. This funding would help public housing authorities to close the funding gap for RAD conversions and tax credit deals that will preserve our aging public housing.
Reform the Martin Act to preserve affordable housing
- When properties exit the 421-a program, the affordable units are at risk of being lost, as there are no current programs that preserve such housing. However, Habitat for Humanity NYC/Westchester (a NYSAFAH member) has been championing a legislative solution.
- Recommendation: NYSAFAH supports S3566A/A6921 (Sen. Cleare / AM Epstein) which would allow developers and non-profits to preserve expiring affordable units created by 421-a. It would amend the Martin Act to reduce the threshold for condo conversion from 50% of residents to 15% (the threshold before the 2019 rent law reform) if a building preserves its expiring affordable 421-a units in perpetuity.
- This bill will also allow non-profits to turn those units into affordable homeownership units.
Streamline affordable housing development for faith-based organizations
- Many houses of worship and other faith-based organizations want to develop affordable housing on their own land, but the land use process is lengthy, expensive, and highly uncertain.
- Recommendation: NYSAFAH supports the Faith Based Affordable Housing Act S7791/A8386 (Sen. Gounardes / AM Cunningham). This legislation would provide land use regulatory relief for faith-based organizations that want to develop affordable housing on their own land.
- Inside NYC, it will allow a development to at least R6B density (and allow the use of other zoning within 800 feet), providing at least MIH-level affordability (excluding workforce option).
- Outside NYC, it will allow a development of at least three or five stories, depending on the size of the municipality, but only on infill sites connected to sewers, and the building must include at least 20% affordable housing at 80% AMI.
Testimony on Intro 195, Intro 352, Reso 563 (June 6, 2023)
New York State Legislative Testimony:
2023-2024 NYS Budget Housing Priorities and Funding (March 2023)
Kingston’s Citywide Zoning Amendment (February 13, 2023)
City of Yes for Carbon Neutrality Testimony (July 26, 2023)