New York

1) Government Leading Agency

The Division of Housing and Community Renewal is a major agency in New York State for the supervision, maintenance and development of affordable low-and moderate-income housing. In addition to the Division, the New York State Housing Finance Agency (HFA) is a New York State public authority created in 1960 to build

11) This section is mainly based on the materials and documents from the New York Division of Housing and Community Renewal website (www.dhcr.state.ny.us/index.htm) and the New York State Housing Finance Agency (www.nyhomes.org/index.aspx?page=1) and the New York Trust Fund Corporation websites (www.dhcr.state.ny.us/AboutUs/HTFC/about_htfc.htm), unless specific documents or data sources are not mentioned.

and preserve affordable multifamily rental housing throughout New York State. HFA sells bonds and uses the proceeds to make mortgages to affordable housing developer s.¹²⁾ HFA’s subsidiary, the New York State Affordable Housing Corporation (AHC), was established in 1985 to promote homeownership by low- and moderate-income households. Using resources appropriated by the State Legislature, AHC awards grants to local governments, nonprofits and charitable organizations to subsidize the cost of newly constructed homes and the cost of renovating existing housing.

2) Major Programs

In 1939, New York State began America's first state-subsidized public housing program. That same year, the Division of Housing became an independent agency that administered both the Public Housing Program. New York State's declaration that state-aided public housing projects would bar discrimination based on "race, color, creed or religion" was also a first. At that time, no other state prohibited discrimination in public housing. In 1955, the State Legislature enacted the Mitchell-Lama Law. This law authorized New York State or its municipalities to provide low-interest mortgage loans to developers of housing for people with incomes too high for traditional forms of public housing but too low for private housing. New York State continued to be an innovator in middle income housing with the creation of the New York State Housing Finance Agency (HFA) in 1960. The HFA sold bonds to private investors and used the proceeds to provide builders with low interest loans.

The results were impressive: From the start of the program through the mid-1970s,

12) Developers can take advantage of several financing resources when they obtain HFA financing. These include the All Affordable Housing Program for developments in which 100% of the units are affordable;

the Mitchell Lama Rehabilitation and Preservation (RAP) program, which helps renovate state-financed Mitchell Lama projects; and the 80/20 New Construction Housing Program, which provides financing for rental projects where at least 20% of the units are set aside for low-income tenants.

269 state-aided Mitchell-Lama projects were built. These projects brought nearly 105,000 additional apartments to the state. Co-op City in the Bronx, the nation's largest cooperative housing venture, contained 15,378 apartments. As part of an overall strategy to provide safe and affordable housing for the residents of New York State, DHCR also created an Anti-Drug Program in 1989 and currently administers the Section 8 Housing Choice Voucher Program. This program provides low-income families with vouchers and certificates to help them to pay the rent. Following Table 3-4 shows an overall resource for state and federal housing spending in New York State.¹³⁾

<Table 3-4> Overall Resource for State and Federal Housing Spending in New York State

Sources: A Strategic Plan for Affordable Housing (New York State, 2008).

First, the Division added functions of community development, called “Community Renewal,” in 1960 and began providing direct grants and technical help to

13) The 2007 multifamily mortgages number is high due to HFA financing a number of very large 80-20 projects in 2007. In addition, several of these 80-20 projects received a multi-year allocation of Private Activity Bonds. We counted the full amount as allocated in 2007. This is consistent with our overall resource counting methodology.

communities participating in federally-aided urban renewal programs. By the 1970's, non-profit community groups began to spring up at the grass-roots level throughout the state. In 1977, the Legislature created the Neighborhood Preservation Program (NPP) to assist some of these groups with their administrative and planning expenses.

In 1980, it created the Rural Preservation Program (RPP) for groups serving rural areas. In 1985, DHCR assumed responsibility for the Housing Trust Fund (HTF), which awards grants and loans to private, nonprofit and government housing sponsors to construct and rehabilitate low-income housing. The New York State receives an allocation of the Federal low-income Housing Tax Credits, or LIHTC each year from the Federal government. In turn, the New York State allocates these credits to developers/owners to provide a source of equity for low-income housing by offering federal income tax breaks to the holder of the tax credit.

Second, rent regulation marked the next stage in the Agency's evolution into the current division. In 1964, DHCR was given the responsibility of administering rent control in municipalities outside the New York City. In 1971, the State passed several laws designed to gradually deregulate the rent-controlled and rent-stabilized housing stock. In response to tenant concerns about this deregulation, the State passed the Emergency Tenant Protection Act of 1974 (ETPA) which provided for a stabilization system in Nassau, Rockland and Westchester counties in municipalities choosing to adopt the regulations. ETPA also amended the New York City Rent Stabilization Law, thereby re-regulating many decontrolled apartments and placing additional buildings under stabilization for the first time. New York City has approximately 960,000 units that are regulated and there are slightly over 1 million regulated units throughout the entire state.

Third, the low-income Housing Trust Fund Program (HTF) was established under Article XVIII of the Private Housing Finance Law (PHFL) to help meet the critical need for decent, affordable housing opportunities for people of low-income. The

Housing Trust Fund Corporation, under the direction of a Board of Directors chaired by the Commissioner of the Division of Housing and Community Renewal (DHCR), receives staff and administrative support from DHCR. HTF provides funding to eligible applicants to construct low-income housing, to rehabilitate vacant, distressed or underutilized residential property (or portions of a property), or to convert vacant or underutilized non-residential property to residential use for occupancy by low-income homesteaders, tenants, tenant-cooperators or condominium owners. HTF can also provide seed funding to eligible non-profit applicants who need financial assistance in developing a full HTF project application.¹⁴⁾

Fourth, the New York State HOME Program is administered to use federal HOME Investment Partnership Program funds to expand the supply of decent, safe, and affordable housing within the State. Approximately $33 million is available for capital (multifamily) projects and local program administrators (single family projects) in 2008. The HOME Program funds a variety of activities through partnerships with counties, towns, cities, villages, private developers, and community-based non-profit housing organizations. HOME Program funds may be used to pay for acquisition, rehabilitation, construction, and certain related soft costs. Funds may also be used for relocation costs, tenant-based rental assistance, down payment and closing costs, and some administrative and planning costs, subject to limitations set forth in the federal

14) Since 1985, HTF has received annual appropriations between $25 and $39 million; a nominal amount of each appropriation can be used for administration of the program. Funding under the low-income Housing Trust Fund is limited to $125,000 per unit. Project sponsors must ensure long-term (15-30 years) use by low and/or very low-income persons. Seed money funding is limited to $5,000 per unit and a maximum amount of $45,000 for the entire project. Up to 10 percent of an HTF award can be used for a community service facility. Program funds cannot be used for a project's or applicant's administrative costs, nor can they be used for any non-residential facilities, except for community space for project tenants and such space necessary for operating and management activities as approved by the HTFC. No more than 50 percent of the HTF award may be used towards acquisition of the project property. Operating reserves cannot be capitalized with HTF monies. No more than 50 percent of the annual HTF appropriation may be allocated to any one municipality. Additionally, no more than one-third of the funds appropriated in any one year may be used by private developers.

regulations. Funds may only be used for residential housing.

Fifth, Section 8 Project-Based Contract Administration Program was implemented in May 2000, HUD selected DHCR and the New York State Housing Trust Fund Corporation (HTFC) as New York State's Contract Administrator for the Section 8 Project-Based Program. Since that time, the portfolio assigned to DHCR/HTFC stands at 996 contracts covering 96,450 units. As the HUD-designated Contract Administrator for New York State, DHCR/HTFC is directly responsible to HUD for all program functions and reporting requirements, provides general program oversight and input on policy development and performs a quality assurance function for all assigned tasks.

Day-to-day functions involved in this program initiative include conducting management and occupancy reviews, adjusting contract rents, paying monthly Housing Assistance Payment (HAP) vouchers to project owners, processing HAP Contract renewals, terminations and/or opt-outs, and responding to health and safety issues.

These functions are carried out by and through a contract with a Private Sector Partner (PSP).

Sixth, the New York State Community Development Block Grant (CDBG) Program provides financial assistance to eligible cities, towns, and villages with populations under 50,000 and counties with an area population under 200,000, in order to develop viable communities by providing decent, affordable housing, and suitable living environments, as well as expanding economic opportunities, principally for persons of low and moderate income. The state must ensure that no less than 70% of its CDBG funds are used for activities that benefit low- and moderate-income persons. The program objectives are achieved by supporting activities or projects that: benefit low-and moderate-income families; create job opportunities for low- low-and moderate-income persons; prevent or eliminate slums and blight; or address a community development need that poses a serious and imminent threat to the community's health or welfare.