The proposed amendments to the rules clarify the documentation required to demonstrate correction of the underlying conditions relating to mold and water leak violations in order to achieve compliance with the order and secure its dismissal. Amendments to the rules in 2022 added consideration of certain health indicators by the Department of Health and Mental Hygiene that are related to housing conditions as a factor to prioritize in the selection of buildings. HPD promulgated rules that set criteria for selection of buildings for the Underlying Conditions Program, requirements regarding owner compliance with the Underlying Conditions Order, issued in accordance with Administrative Code section 27-2091 and circumstances under which HPD may rescind an Underlying Conditions Order. Selection is based on the severity of violations and the number of dwelling units affected by the underlying condition. HPD selects approximately 50-100 buildings, per year, for participation in the Underlying Conditions Program. This is known as the Underlying Conditions Program. Subdivision c of Administrative Code section 27-2091, which was added by Local Law 6 of 2013, grants HPD the authority to issue an order to a building owner to correct any underlying condition existing in that building that has caused or is causing a violation of the Housing Maintenance Code, the New York State Multiple Dwelling Law, or any other state or local law that imposes requirements on dwellings. State agencies, including the Housing Finance Agency (HFA), Empire State Development Corporation (ESD), and HCR, have collaborated to identify State Mitchell-Lama housing companies to participate in mortgage refinancings, which generate funds for capital improvements and property upgrades.Proposed Rules for Underlying Conditions Rule Amendment When owners buy out, their buildings are no longer subject to HCR or HPD Mitchell-Lama regulation, and apartments need not be kept affordable for moderate-income households (rent regulation for rental projects built before 1974 remains in effect, as do the regulatory requirements of tax relief or other programs). Owners may choose to buy out of the Mitchell-Lama program by prepaying the existing mortgage in order to have the ability to re-sell their projects at market rates. By 1980, HDC had refinanced projects containing 29,000 units and thereby reduced New York City’s debt burden.ĭevelopments were eligible to withdraw or buy out from the program after 20 years, upon prepayment of the mortgage, or after 35 years in the case of developments aided by loans prior to May 1, 1959. Beginning in 1977 (after New York City’s fiscal crisis in the 1970s), the New York City Housing Development Corporation (HDC) and the Federal Housing Administration (FHA) refinanced many of the City’s Mitchell-Lama portfolio. The program also required ongoing supervision by the agency originally sponsoring the development of the project, either the New York City Department of Housing Preservation and Development (HPD) or New York State Homes and Community Renewal (HCR). In exchange for low-interest mortgage loans and real property tax exemptions, the Mitchell-Lama program limited profits and placed income limits on tenants or cooperative owners. The Mitchell-Lama program has subsidized the construction of 269 developments, with over 105,000 apartments for middle-income households. Agency: NYS Homes and Community Renewal (NYS HCR).
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