N.Y. Private Housing Finance Law § 31: Rentals and selection of tenants

§ 31. Rentals and selection of tenants. 1. (a) A company may, with the

approval of the commissioner or the supervising agency, as the case may

be, fix maximum rentals per room to be charged tenants of the dwellings,

the average of the rentals for the dwellings in any project not to

exceed the maximum average rentals determined by the commissioner or the

supervising agency, as the case may be, before any commitments are made

by the company for the construction of the project. The commissioner or

the supervising agency, upon his or its own motion, or upon application

by the company or of a stockholder, lienholder, a creditor, or of

holders of at least ten per centum of the bonds of the company, or by

the federal government where the mortgage loan of the company is insured

or held by the federal government, may vary such rental rate from time

to time so as to secure, together with all other income of the company,

sufficient income for it to meet within reasonable limits all necessary

payments to be made or projected to be made during the term of a lease

by the said company, of all expenses including fixed charges, sinking

funds, reserves and dividends on outstanding stock as authorized by the

commissioner or the supervising agency, as the case may be. Letting,

subletting or assignment of leases of apartments at greater rentals than

those approved by the commissioner or the supervising agency shall be

unlawful. Where the mortgage loan of a company is insured or held by the

federal government or where a project is owned by the federal

government, rental rates shall be varied without regard to the

provisions of any general, special or local law which would otherwise

limit or control such rental rates or the determination or variation

thereof for so long as such mortgage loan remains outstanding or the

project financed by such a mortgage loan is owned by the federal

government. No variation of a rental rate in a project financed by a

mortgage loan insured or held by, or owned by the federal government

shall be effective unless approved by the federal government.

(b) Unless any applicable regulation of or regulatory agreement with

the federal government shall otherwise provide, (i) the tenants in a

project financed by a mortgage loan insured or held by the federal

government shall be entitled and may elect to enter in a lease for a

term of up to three years at such rental rates as may be established by

the commissioner or the supervising agency, as the case may be, pursuant

to paragraph (a) of subdivision one of this section, (ii) the rental

rates to be charged under any such lease shall be established after

consideration of the term of such lease and may differ from the rental

rates to be charged under any other lease of a different term and (iii)

the commissioner or the supervising agency, as the case may be, shall in

establishing such rental rates consider the obligations of the company

under any instruments evidencing or securing any residual indebtedness.

Such leases shall contain a provision authorizing the variation of the

rental rates during the term of such leases upon an application made by

the federal government pursuant to paragraph (a) of subdivision one of

this section.

* (c) A company may, with the approval of the commissioner or the

supervising agency, as the case may be, fix maximum charges to be paid

by each occupant for the non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons, which charges may include payment for board and such other

services as may be provided as an incident to occupancy, the average of

such charges for all the non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons in any project not to exceed the maximum average charges for all

such non-housekeeping accommodations, aged care accommodations or

non-housekeeping accommodations for handicapped persons determined by

the commissioner or the supervising agency as the case may be, before

any commitments are made by the company for the construction of the

project. The commissioner or the supervising agency upon his or its own

motion, or upon application by the company or of a stockholder, lien

holder, a creditor or of holders of at least ten (10%) per centum of the

bonds of the company, may vary such charges from time to time so as to

secure, together with all other income of the company, sufficient income

for it to meet within reasonable limits all necessary payments to be

made by said company, of all expenses including fixed charges, sinking

funds, reserves and dividends on outstanding stock as authorized by the

commissioner or supervising agency as the case may be. It shall be

unlawful to make non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons available at greater charges than those approved by the

commissioner or the supervising agency.

* NB There are 2 (c)'s

* (c) Disclosure of bases. The commissioner, administrator or

supervising agency, as the case may be, shall make available for

inspection and copying by the residents in any affected development, all

items and data and recommendations utilized as the various bases for the

decision on increases in rental or carrying charges, upon notification

of the decision to the applicant of the action taken.

* NB There are 2 (c)'s

2. (a) The dwelling or non-housekeeping accommodations without board

in a company project shall be available for persons or families of low

income whose probable aggregate annual income at the time of admission

and during the period of occupancy does not exceed, the greater of (i)

the median income for such persons or families for the metropolitan

statistical area in which the project is located, or if a project is

located outside a metropolitan statistical area, the median income for

such persons or families for the county in which the project is located,

as most recently determined by the United States department of housing

and urban development, in which case any person or family becoming

eligible for admission pursuant to this subparagraph shall pay, from the

time of admission, a rental surcharge as provided for in subdivision

three of this section, computed on the basis of the income limitations

applicable to such persons or families in the absence of this

subparagraph, or (ii) eight times the rental, including the value or

cost to them of heat, light, water and cooking fuel, of the dwellings

that may be furnished to such persons or families, except that in the

case of families with three or more dependents, such ratio shall not

exceed nine to one. Persons or families with two or less dependents

eligible for admission or continued occupancy pursuant to subparagraph

(ii) of this paragraph or subparagraph (ii) of this paragraph prior to

the effective date of a chapter of the laws of two thousand nineteen

that amended subparagraph (ii) of this paragraph, shall pay a rental

surcharge computed on the basis of an income limitation of seven times

the rental and families with three or more dependents eligible for

admission or continued occupancy pursuant to subparagraph (ii) of this

paragraph or subparagraph (ii) of this paragraph prior to the effective

date of a chapter of the laws of two thousand nineteen that amended

subparagraph (ii) of this paragraph, shall pay a rental surcharge

computed on the basis of an income limitation of eight times the cost of

the rental, including in each instance the value or cost to the persons

or families of heat, light, water and cooking fuel, of the dwellings

furnished to such persons or families.

The "probable aggregate annual income" in the case of dwelling

accommodations means the annual income of the chief wage earner of the

family, plus all other income of other members of the family over the

age of twenty-one years, plus a proportion of income of gainfully

employed members under the age of twenty-one years, the proportion to be

determined by the company as approved by the commissioner or the

supervising agency, as the case may be, excluding therefrom a deduction

of fifteen thousand dollars from the income of secondary wage earners of

the family or a larger deduction if approved by the commissioner or the

supervising agency, as the case may be, except that the company, as

approved by the commissioner or the supervising agency, as the case may

be, may exclude a proportion of the income of other members of the

family over the age of twenty-one years for the purpose of determining

eligibility for admission or continued occupancy, or for establishing

the rental of such family, or for all such purposes; in the case of such

non-housekeeping accommodations it means the annual income of the

occupant, provided that the commissioner or supervising agency, as the

case may be, may make rules and regulations relative to the allocation

of the income of a family among the members thereof for the purpose of

determining the income attributable to such occupant.

(b) For the purpose of determining maximum income to establish

eligibility for admission or continued occupancy of, or the imposition

of surcharges upon, tenant-cooperators in a mutual company project, or

for all such purposes, there may be added to the total annual carrying

charges an amount equal to six per centum of the investment of a person

or family in the equity obligations of such housing company and, where

not included in the carrying charges payable to such company, the value

or cost to them of heat, light, water and cooking fuel and, to the

extent authorized by the commissioner or the supervising agency as the

case may be, the value or cost to them of repainting and replacement of

fixtures and appliances.

(c) The non-housekeeping accommodations with board in a company

project including non-housekeeping accommodations with board designed

for the occupancy of handicapped persons shall be available for persons

of low income whose probable aggregate annual income at the time of

admission and during the period of occupancy does not exceed four times

the annual charges to be paid by such persons and in the case of aged

care accommodations two times the annual charges to be paid by such

persons. The "probable aggregate annual income" means the annual income

of the person occupying such non-housekeeping accommodations, aged care

accommodations or non-housekeeping accommodations for handicapped

persons, provided that the commissioner or supervising agency, as the

case may be, may make rules and regulations relating to the allocation

of the income of a family among the members thereof for the purpose of

determining the income attributable to such occupant.

(d) A company may, with the approval of the commissioner or the

supervising agency, as the case may be, lease dwellings in a project to

an authority, at rentals fixed for such dwellings pursuant to the

provisions of subdivision one of this section less an appropriate

adjustment for the increased tax exemption, if any, attributable to such

dwellings pursuant to subdivision three of section thirty-three of this

chapter, for occupancy by persons and families of low income who are

eligible and pay rents therefor pursuant to the provisions of the public

housing law.

(e) Notwithstanding the provisions of this subdivision, families whose

probable aggregate annual income does not exceed one hundred twenty-five

percent of the limitations as to income as determined pursuant to

paragraphs (a) and (b) of this subdivision, shall also be eligible for

admission to the dwelling or non-housekeeping accommodations without

board of a project on the understanding that any family becoming

eligible for admission by reason hereof shall pay, from the time of

admission, a rental surcharge as provided for in subdivision three of

this section, computed on the basis of the income limitations applicable

to such family in the absence of this subdivision. In applying the

provisions of subdivision three of this section to a family becoming

eligible by reason of this section, the maximum income prescribed by law

for admission or occupancy shall for all purposes be computed without

reference to this paragraph.

2-a. Notwithstanding any other provision of law, the commissioner or

supervising agency shall authorize and make provision in rules and

regulations for an immediate downward adjustment in surcharge upon a

showing of substantial decrease in income caused by events including,

but not limited to death, disability or illness.

3. In the event that the income of a person or family in occupancy

should increase and exceed the maximum prescribed by law for admission

or for continued occupancy, based on the latest existing rent, by more

than twenty-five per centum, such person or family shall be subject to

removal from the dwelling, non-housekeeping, aged care accommodations or

non-housekeeping accommodations for handicapped persons provided,

however, that such person or family may be permitted to remain in

occupancy until such income exceeds the maximum prescribed by law by

more than fifty per centum, if the company, with the approval of the

commissioner or the supervising agency, shall determine that removal

would cause hardship to such person or family. Any person or family in

occupancy whose income exceeds the maximum prescribed by law shall pay a

rental surcharge in accordance with a schedule of surcharges to be

promulgated by the company with the approval of the commissioner or the

supervising agency, as the case may be, provided, however, such rental

surcharge shall in no event exceed fifty per centum of the existing

rent.

4. Twenty-five per cent of rental surcharges collected pursuant to

this section on account of rentals payable prior to July first, nineteen

hundred eighty-one shall be paid by the company to the municipality

which has granted tax exemption pursuant to section thirty-three of this

article as a credit against the grant of tax exemption, the value of

such tax exemption and of such credit to be determined on an individual

dwelling, non-housekeeping, aged care accommodation or non-housekeeping

accommodations for handicapped persons unit basis. In the event that

such tax exemption has not been granted, or in the event that a sum

equal to the total of all accrued taxes as to individual dwelling,

non-housekeeping, aged care accommodation or non-housekeeping

accommodations for handicapped persons units where such tax exemption

was granted have been paid to the municipality, the excess if any, of

surcharges and all surcharges imposed after June thirtieth, nineteen

hundred eighty-one shall be applied to the expenses of operation and

management as approved by the commissioner or the supervising agency.

5. Notwithstanding the provisions of this section or of any other

general, special or local law, persons or families living in a project

under a lease for ninety-nine years renewable, or in perpetuity, or by

reason of ownership of stock in such company may, with the approval of

the commissioner or of the supervising agency, as the case may be, be

permitted to remain in occupancy for not more than three years after

such increase in income exceeds the maximum prescribed by law by more

than fifty per centum unless such occupancy is extended with the

approval of the commissioner or of the supervising agency, as the case

may be. Any such occupant required to remove from the project because of

excessive income as herein provided shall be discharged from liability

on any note, bond or other evidence of indebtedness relating thereto and

shall be reimbursed for all sums paid by such occupant to the company on

account of the purchase of stock or income debentures as a condition of

such occupancy.

6. Preference in admission to a project shall be given to families

displaced by a limited-profit housing project.

7. Preference in admission to a project with an open waiting list, as

determined by the commissioner or the supervising agency, shall be given

by a mutual company or an urban rental company or by the New York state

housing finance agency when subleasing dwellings in projects of such

companies pursuant to section forty-four-a of this chapter, to persons

or surviving spouses of persons who are veterans as such term is defined

pursuant to section eighty-five of the civil service law. The number of

persons given preference as a veteran or a surviving spouse of a veteran

shall be published adjacent to the application to be on such waiting

list. For projects with a closed list, as determined by the commissioner

or the supervising agency, such preference shall be given upon the

opening of the waiting list. Notwithstanding the foregoing, persons who

are residing in a limited-profit housing project shall be given first

priority for an internal transfer in the project in which they are

residing in accordance with rules and regulations promulgated by the

commissioner or the supervising agency.

7-b. Preference in admission to projects located in a city with a

population of one hundred thousand or more shall be given to members of

a police force of such city, provided such members otherwise qualify for

admission and provided, further, that such city has adopted a local law

authorizing such program.

8. Preference in admission to any project or to such portion of any

project which has been specifically designed for occupancy by aged or

handicapped persons, as the case may be, shall be given to such persons.

8-a. A company may rent one or more dwelling units to a social

services official or duly authorized agency, as defined in section three

hundred seventy-one of the social services law, for the operation of

agency boarding homes or group homes or to any public agency as defined

in section four hundred sixty-one of the general municipal law which

provides residences and social services to dependent aged persons.

9. (a) For the purpose of enabling lower income elderly persons to

continue in occupancy without paying rentals in excess of a fair

proportion of their income, any municipality having a population of less

than one million is authorized to make and to contract to make periodic

payments to a company in an amount not exceeding the difference between

the rent or carrying charges for the dwellings occupied by such lower

income persons and one-third of their net probable aggregate annual

income, where such rent or carrying charges exceed such one-third of

income; provided that the aggregate amount of periodic payments to be

made in accordance with contracts entered into by the municipality

during any fiscal year thereof pursuant to this subdivision, subdivision

seven of section eighty-five-a, section one hundred twenty-six and

section five hundred seventy-seven-a of this chapter shall not exceed

the aggregate amount of all real property taxes paid or payable during

such fiscal year by all companies organized pursuant to this article,

article IV, article V, and article XI of this chapter and the aggregate

estimated receipts of all such companies in such fiscal year from rental

surcharges collected or to be collected pursuant to this chapter.

(b) Such payments shall be made only on account of a person or family

in occupancy where the head of the household is sixty-two years of age

or older and is not a recipient of public assistance pursuant to the

social services law, and where the net probable aggregate annual income

of the person or family in occupancy does not exceed six thousand five

hundred dollars a year. Notwithstanding the provisions of subdivision

twenty-nine of section two of this chapter, net probable aggregate

annual income as used in this subdivision shall mean annual income of

family members from all sources after deduction of federal, state and

city income taxes; provided that any municipality may provide that

increases in benefits under the social security act which take effect

after such person or family has assumed occupancy shall not be taken

into account.

(c) A company having a contract with the municipality pursuant to this

subdivision may not collect from persons or families in occupancy on

whose account such payments are made any rentals in excess of the

amounts specified in such contract.

10. A housing company shall accept federal reimbursement under section

eight of the Housing and Community Development Act of 1974 in lieu of

such amount in rent payment for a person qualifying under such act and

residing in a project of such company. A housing company shall not

reject an applicant for an apartment solely on the basis that all or

part of the rent shall be paid under section eight of the Housing and

Community Development Act of 1974.

11. Every company subject to the provisions of this article shall on a

form prescribed by the commissioner or supervising agency annually

certify to such commissioner or supervising agency that all necessary

steps are being undertaken to ensure that all surcharges due pursuant to

this section are being properly billed, collected and remitted.

12. All municipally-aided projects shall post the first and last names

of all persons on each waiting list maintained by such project, in

chronological order, by such project's management office, or, if there

is no management office on the site of such municipally-aided project,

in such project's lobby.

13. The commissioner or supervising agency shall develop a written

procedure with regard to how applications for admission to a company are

processed and numbered, and how tenants are selected. Such procedure

shall be implemented and followed by all limited-profit housing

companies subject to the provisions of this article; provided, however,

that any limited-profit housing company may elect additional procedures

so long as such procedures are not inconsistent with the procedures

developed by the commissioner or supervising agency and any other

requirements set forth in this article.

14. The commissioner or supervising agency shall develop a procedure

whereby applicants are notified in the case that their application is

rejected by a limited-profit housing company subject to the provisions

of this article, and such procedure shall also include the appeal's

process available to the rejected applicant. The notification that shall

be sent to the applicant shall be in written form, include reasons why

the applicant was rejected, the appeal's process, and be sent to the

applicant within sixty days after the limited-profit housing company

decided to reject such applicant. Any limited-profit housing company may

elect additional procedures so long as such procedures are not

inconsistent with the procedures developed by the commissioner or

supervising agency and any other requirements set forth in this article.

For purposes of this subdivision, an applicant shall not be deemed

rejected if their application is still active on the limited-profit

housing company's waiting list and such waiting list is still open and

accepting applications.

15. The commissioner or the supervising agency shall develop and

require the use of a publicly available electronic automated system for

limited-profit housing companies to store, process, and maintain

applications and waiting lists. Waiting lists maintained by each such

company shall use a method that protects any personally identifiable

information of applicants from being publicly disclosed or accessible to

the public. Such electronic automated system shall also include general

information about each company, including, but not limited to: the name

and address of the company; the management office and address; the

number and size of all units in each building; and information on the

status of each waiting list, including whether the limited-profit

housing company is currently accepting applications and how long

applicants may have to wait.