STATE OF NEW YORK
________________________________________________________________________
560
2025-2026 Regular Sessions
IN SENATE
(Prefiled)
January 8, 2025
___________
Introduced by Sens. KRUEGER, BAILEY, HOYLMAN-SIGAL, LIU, SERRANO, STAVI-
SKY -- read twice and ordered printed, and when printed to be commit-
ted to the Committee on Housing, Construction and Community Develop-
ment
AN ACT to amend the private housing finance law, in relation to windfall
profits on the dissolution or first sale of rental companies and the
dissolution and/or reconstitution of mutual companies
The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
1 Section 1. Subdivision 2 of section 35 of the private housing finance
2 law, as amended by chapter 229 of the laws of 1989, is amended to read
3 as follows:
4 2. A company aided by a loan made after May first, nineteen hundred
5 fifty-nine, may voluntarily be dissolved, sold and/or reconstituted
6 without the consent of the commissioner or of the supervising agency, as
7 the case may be, not less than twenty years after the occupancy date
8 upon the payment in full of the remaining balance of principal and
9 interest due and unpaid upon the mortgage or mortgages [and], of any and
10 all expenses incurred in effecting such voluntary dissolution and of a
11 transfer fee equal to seventy-five percent of the fair market value in
12 the case of dissolution or sales price on the first sale of a rental
13 project, or, in the case of a mutual company seventy-five percent of the
14 sales price on each first sale thereafter for market value by a selling
15 shareholder. The proceeds of the transfer fees are to be paid into a
16 fund held by the New York city housing development corporation and the
17 New York state housing finance agency for the following purposes:
18 (a) to continue to subsidize the development for as long as the
19 purchaser of a rental development remains in the Mitchell-Lama program;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01716-01-5
S. 560 2
1 (b) for the city or state to purchase the land and to lease the land
2 to the tenants and convert the project to a limited profit mutual compa-
3 ny, with a ninety-nine year lease;
4 (c) for repair loans at zero percent interest to fund necessary capi-
5 tal improvements for as long as the company remains in the Mitchell-Lama
6 program;
7 (d) for each year that the company remains as a limited profit compa-
8 ny, to forgive one-thirtieth of the principal of any repair loan each
9 year;
10 (e) for the subsidization of other limited profit housing companies;
11 and
12 (f) for the development of other affordable housing.
13 § 2. This act shall take effect on the sixtieth day after it shall
14 have become a law.