Authorizes local legislative bodies to grant additional real property tax exemptions to redevelopment company projects, which are not operated by mutual redevelopment companies.
Ayes (57): Adams, Addabbo, Alesi, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Espaillat, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hassell-Thomps, Johnson, Kennedy, Klein, Krueger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
Nays (1): Parker
Excused (3): Hannon, Huntley, Oppenheimer
TITLE OF BILL: An act to amend the private housing finance law, in relation to authorizing the granting of an additional real property tax exemption for certain redevelopment company projects
PURPOSE: This bill authorizes local legislative bodies to extend real property tax abatements in order to encourage the retention of federally subsidized affordable housing within the municipality.
SUMMARY OF PROVISIONS: This bill amends subdivision 1 of section 125 of the private housing finance law to add a new paragraph a(3) which provides that a local legislative body may extend an Article 5 real property tax abatement for projects which are nearing the end of their abatement period. The abatement may be granted for up to a 50 year period or until such time as the property ceases to provide affordable housing under Article 5.
New York State Housing Finance Law Article 5 establishes a process whereby a municipal legislative body may authorize real property tax abatements in order to meet the municipality's need for affordable housing. Most of the projects receiving these tax abatements are Section 8 projects which were built during the 70s and 80s, have a maximum tax abatement term of 40 years, and are nearing the end of their abatement period. State law does not currently provide the option for a municipality to extend an existing tax abatement period.
An owner exiting the program is subject to unpredictable real property tax assessments. The tax assessment process is not equipped to take into account the factors associated with maintaining affordable housing. Many assessors do not refer to HUD's federal Real Estate Assessment Center in formulating their assessments. Additionally one of HUD's requirements in establishing the feasibility of Section 8 housing is that a project has an abatement that is an objective predictable shelter rent percentage into the future, not a subjective unpredictable annual assessment.
Many Section 8 owners will be unable to afford taxes based upon a traditional valuation process and will likely choose to opt out of the program when the tax abatement ceases. This bill will allow a municipality the option to extend the abatement program to provide an inducement for maintaining building to meet local affordable housing needs.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 6480 IN SENATE February 15, 2012 ___________Introduced by Sen. YOUNG -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the private housing finance law, in relation to author- izing the granting of an additional real property tax exemption for certain redevelopment company projects THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 125 of the private housing finance law is amended by adding a new paragraph (a-3) to read as follows: (A-3) ANY INCONSISTENT PROVISION OF LAW NOTWITHSTANDING, THE LOCAL LEGISLATIVE BODY OF ANY MUNICIPALITY MAY GRANT AN ADDITIONAL TAX EXEMPTION PERIOD FOR ANY PROJECT, OTHER THAN A PROJECT BY A MUTUAL REDE- VELOPMENT COMPANY, THAT RECEIVED A TAX EXEMPTION UNDER PARAGRAPH (A) OF THIS SUBDIVISION, UPON THE EXPIRATION OF THE TAX EXEMPTION PERIOD. THE ADDITIONAL TAX EXEMPTION PERIOD MAY BE FOR A TERM OF FIFTY YEARS, OR UNTIL SUCH TIME AS THE PROJECT IS NO LONGER OPERATED UNDER THE RESTRICTIONS AND FOR THE PURPOSES SET FORTH IN THIS ARTICLE, WHICHEVER IS SOONER. UNLESS OTHERWISE APPROVED BY THE LOCAL LEGISLATIVE BODY, THE AMOUNT OF TAXES PAID BY THE REDEVELOPMENT COMPANY DURING SUCH ADDITIONAL TAX EXEMPTION PERIOD SHALL NOT BE LESS THAN AN AMOUNT EQUAL TO THE GREATER OF (I) TEN PERCENT OF THE ANNUAL RENT OR CARRYING CHARGES OF THE PROJECT, MINUS UTILITIES FOR THE RESIDENTIAL PORTION OF THE PROJECT, OR (II) THE TAXES PAYABLE BY SUCH COMPANY FOR THE RESIDENTIAL PORTION OF THE PROJECT IMMEDIATELY PRIOR TO THE EXPIRATION OF THE INITIAL TAX EXEMPTION PERIOD. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14426-02-2