§ 6-08 Affordable Housing Construction Requirements.
RCNY § 6-08
(a)Multiple dwellings affected. Within the geographic exclusion area described in 28 RCNY § 6-02(c)(10), the benefits of the Act are available only to multiple dwellings which would otherwise be eligible for benefits of the Act pursuant to the provisions of these rules and where construction commenced on or before November 29, 1985, unless such construction is carried out with substantial governmental assistance, or the owner thereof complies with the requirements of this section.
(b)Number of affordable units required to be created. A multiple dwelling located in the geographic exclusion area which would otherwise be eligible pursuant to the provisions of these rules and not constructed with substantial government assistance may qualify for benefits under the Act by the method described in either paragraph (1), (2), (3), (4), (5), or (6) of this 28 RCNY § 6-08(b). The ratio of the number of affordable units to be created to the number of units in a multiple dwelling located within the geographic exclusion area seeking the benefits of the Act are listed below. ParagraphRatio28 RCNY § 6-08(b)(1)1:528 RCNY § 6-08(b)(2)1:528 RCNY § 6-08(b)(3)(i)1:428 RCNY § 6-08(b)(3)(ii)1:3.328 RCNY § 6-08(b)(4)(i)1:528 RCNY § 6-08(b)(4)(ii)1:428 RCNY § 6-08(b)(4)(iii)1:628 RCNY § 6-08(b)(5)(i)1:2.328 RCNY § 6-08(b)(5)(i)1:2 (1) Obtaining the certification of the Department that twenty percent (20%) of the units contained in the multiple dwelling applying for benefits pursuant to the Act shall be rented to persons of low and moderate income as defined by this chapter at rents to be determined by the Department pursuant to this section.
(2)Entering into a written agreement with the Department on or before December 31, 1990 to create through new construction on a site or sites meeting the requirements of 28 RCNY § 6-02(f), Class A dwelling units to be rented to persons of low and moderate income as defined by this chapter at rents to be determined by the Department pursuant to this section numbering at least twenty percent (20%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(3)Entering into a written agreement with the Department on or before December 31, 1990 to substantially rehabilitate an existing Class A multiple dwelling, the residential portion of which is vacant, to be rented to persons of low and moderate income as defined by this chapter at rents to be determined by this section. The number of units to be substantially rehabilitated shall be in accordance with the following ratios: (i) twenty-five percent (25%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a rental; or (ii) thirty percent (30%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a cooperative or condominium.
(4)Entering into a Written Agreement with the Department on or after January 1, 1991 to create Class A dwelling units through new construction on a site or sites meeting the requirements of 28 RCNY § 6-02(f) to convert an existing non-residential building to a Class A multiple dwelling, or to substantially rehabilitate an existing Class A multiple dwelling building, the residential portion of which is vacant and has been entirely vacant for not less than three years, to be rented to: (i) persons of low income as defined by this chapter at the rents to be determined by the Department pursuant to this chapter numbering at least twenty percent (20%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(ii)persons of moderate income as defined by this chapter at rents to be determined by this section numbering at least twenty-five percent (25%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(iii)homeless persons are referred by the Department or by the Human Resources Administration, numbering at least sixteen and six-tenths percent (16.6%) of the units in the multiple dwelling located within the geographic exclusion area seeking benefits pursuant to the Act.
(5)Entering into a written agreement with the Department to create through new construction or substantial rehabilitation Single Room Occupancy units to be rented to persons of low and moderate income as defined by these rules at rents to be determined by the Department pursuant to this section. The number of units to be created shall be in accordance with the following ratios: (i) forty-two percent (42%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a rental; or (ii) fifty-one percent (51%) of the number of units contained in the multiple dwelling or dwellings located within the geographic exclusion area which will be owned as a cooperative or condominium.
(6)If the average size of the residential units contained in the multiple dwelling or dwellings located within the geographic exclusion area seeking benefits pursuant to the Act exceeds 1,200 square feet, the Department shall increase the number of affordable units which must be created pursuant to paragraphs (2), (3), (4) or (5) of 28 RCNY § 6-08(b) by multiplying that number of units by the ratio of the average square footage to 1,200 square feet unless the average square footage per unit of the low and moderate income units is equal to those of the multiple dwelling in the geographic exclusion area and the developer is the same for the geographic exclusion area units and the affordable units.
(7)If the number of low and moderate income units to be created exceeds 130, two out of every three units in excess of 130 must be rented to moderate income households as defined in this chapter, and must number twenty-five percent (25%) of the number of the units in the multiple dwelling located within the geographic exclusion area seeking the benefits of the Act; and one out of every three units in excess of 130 must be rented to low income households as defined in this section, and must number twenty percent (20%) of the number of units in the multiple dwelling located within the geographic exclusion area seeking the benefits of this Act.
(c)Location of affordable units. Dwelling units created to satisfy the requirements of this section must be contained in a multiple dwelling located on a site or sites outside of the geographic exclusion area, except those affordable units contained in the multiple dwelling, located within the geographic exclusion area, seeking benefits of the Act. In addition, where a written agreement was executed on or after January 1, 1991, dwelling units created to satisfy the requirements of this chapter may also be located on a site or sites within the geographic exclusion area. Sites outside of the geographic exclusion area may be either privately owned or owned by the City of New York. The development of City owned sites must be carried out pursuant to the provisions of 28 RCNY § 6-08(d).
(d)Development of City-owned sites.
(1)An applicant for benefits pursuant to this Act who wishes to create the required number of low and moderate income units on a vacant City-owned site may be offered a site or sites pursuant to a method to be established by the Department. Such method shall make available parcels which will yield the necessary number of low and moderate income units.
(iv)ten percent (10%) of the units must be provided for homeless families. Referrals will be made by HPD/HRA by agreement with the not-for-profit organization, which shall provide the not-for-profit organization with the ability to screen prospective tenants.
(e)Ownership of affordable units.
(i)In the event ownership of the affordable units is retained by a for-profit owner, the owner of the building receiving the benefits of the Act as a result of satisfaction of the requirements of this section shall have the ongoing responsibility for insuring the continuing maintenance and operation of the affordable units in a habitable condition. Should an owner fail to maintain such units as affordable or in a habitable condition, benefits of the Act received by the multiple dwelling located in the geographic exclusion area shall be revoked retroactive to the start of construction. Such revocation shall be conducted in accordance with the procedures established pursuant to chapter thirty-nine of this title.
(f)Special reserve account. The developer of affordable units necessary to qualify a multiple dwelling within the geographic exclusion area for benefits of the Act, which shall not be owned by the for-profit developer of such multiple dwelling, must create a special operating reserve fund. The fund shall be in the amount of $2.25 for each square foot of affordable housing contained in such new, newly converted or substantially rehabilitated multiple dwelling or dwellings, including a pro rata share of common space of buildings not entirely lower income. The fund shall be placed in a blocked account which will be administered by the Department. This reserve fund is separate from the normal building reserve fund built into the rent roll that will be accumulated over time and will be available only on a program-wide basis to cover unanticipated increases in the costs of operating and maintaining units in general. Once an expenditure from the fund has been authorized on a programmatic basis, the dollars can be drawn down on a project-by-project basis. There will be a separate account for each project. Notwithstanding the above, the reserve fund may also be drawn down, with the approval of the Department, in the event of unusual occurrences not normally covered by the normal building reserves.
(g)Construction requirements.
(h)Income and occupancy requirements. All units created pursuant to this section must, at initial occupancy, be affordable to low and moderate income households, as defined in this chapter. Such units must be rented to households earning no more than four times the annual rent for the dwelling unit established pursuant to 28 RCNY § 6-08(i), and must be rented to households that consist of the minimum number of people as specified below: Bedroom Size Minimum Number of People 0 1 1 1 2 2 3 4 (i) Initial rents; re-rentals.
(j)Second tier rents. As an additional protection against future insolvency of units created pursuant to this section and owned by a qualified not-for-profit organization, the Department will also register with the New York State Division of Housing and Community Renewal a second level of rents. This second tier of rents will be set by the Department at or very close to the maximum rents affordable to moderate income families as defined in this chapter. Implementing the second tier of rents for any unit will be allowed on vacancy only with the Department's written permission. The Department will give its permission after a finding that the project has been efficiently managed and the need for second tier rents are a result of factors outside the control of the not-for-profit owner, but in any event, in the following cases only: (1) When the project's financial feasibility is threatened by a significant unanticipated rise in maintenance and operating expenses that cannot be covered by the rent roll and available reserves; or (2) When a significant, unanticipated expense occurs in the building that cannot be covered by the rent roll and available reserves; or (3) When rents rise faster than the income of the tenants who are paying 30 percent (30%) of their income in rent and where the increased rent(s) on the vacant unit(s) are used to maintain the rents for existing tenants at 30 percent (30%) of their income.
(k)Time requirements; filing fees.
(l)Request for written agreement. The following shall be required to be submitted to the Department with any request for a written agreement. Once approved, all documents will be incorporated into the agreement, the complete package to be referred to as The 421-a Written Agreement for Creation of Affordable Housing: (1) A cover sheet identifying: (i) the applicant (ii) if a corporate entity, the principals in that entity (iii) the location of the affordable housing units (iv) the location, if known, of the multiple dwelling located within the geographic exclusion area seeking benefits of the Act.
(8)A statement that a rental multiple dwelling located within the geographic exclusion area which qualified for benefits under the Act pursuant to 28 RCNY § 6-08(b)(3), (4) or (6) of this section will not be converted to cooperative or condominium ownership during the period of partial tax exemption. Conversion may be permitted by the Department subsequent to the expiration of the period of partial tax exemption where the affordable units are owned by a for-profit organization only if the conversion sponsor: (i) enters into a Written Agreement with the Department to provide for the maintenance and operation of the affordable units for the remainder of the 20 years or the period during which such units receive tax benefits under any New York State or New York City tax abatement or exemption program, whichever is longer, or (ii) transfers the ownership of the affordable units to a not-for-profit organization qualified by the Department.
(9)Where affordable units are created pursuant to 28 RCNY § 6-08(b)(1), a statement that such units will not be converted to condominium or cooperative ownership for 20 years, or as long as the buildings containing the affordable units receive tax benefits under any tax abatement or tax exemption program from the State of New York or the City of New York, whichever is longer.
(10)Where the affordable units will be owned by for-profit organization, except those units meeting the requirements of 28 RCNY § 6-08, a statement that the recipient of the benefits of this Act will be responsible for the maintenance and operation of the units in a habitable condition. If the units will be owned by a not-for-profit organization as permitted under 28 RCNY § 6-08(e)(2)(iii), the developer shall be required to fund a reserve fund in the amount of $2.25 for each square foot of affordable housing provided, in the same manner as that described in 28 RCNY § 6-08(f), and a Capital Improvement Escrow Fund in accordance with 28 RCNY § 6-08(e)(2)(iii).
(11)For units to be owned by a not-for-profit organization, an agreement to fund a blocked reserve account, in an amount specified by this section and administered by the Department, or to create such a fund should the units owned by a for-profit organization be transferred to a not-for-profit in the future.
(12)An agreement to submit to the Department, within five days of their execution or issuance by another City agency: (i) a construction contract for the creation of the lower income units between the applicant and the entity chosen to carry out the construction; (ii) final approved plans by the Department of Buildings; (iii) the altered building application and alteration permit for substantial rehabilitations and conversions or the new building permit for new construction; (iv) a temporary certificate of occupancy for the entire residential portion of the building or the permanent certificate of occupancy.
(13)An agreement that changes or amendments made to any document included in this plan must obtain the prior approval of the Department.
(14)A filing fee in the amount of $100 for each proposed unit of affordable housing.
(15)A financial statement describing proposed sources and uses of all funds for the project, as approved by the Department.
(m)Certification; negotiable certificates.
(n)Governmental assistance to affordable units.
(o)Mortgage and debt limitations.
