Local Law 64 of 2018: online housing portal for affordable housing units and owner reporting obligations

In 2018, the New York City Council passed a bill amending the Administrative Code of the City of New York, to establish a housing portal for the purpose of creating a uniform and transparent process for the marketing of rental and homeownership units. This alert discusses what owners and developers of affordable housing, including cooperative and condominium affordable homeownership projects, need to know about Local Law 64 of 2018.

By no later than July 1, 2020, the New York City Department of Housing Preservation and Development HPD) must establish an online housing portal for use by owners of affordable units being offered for sale or rent, as well as renters and homebuyers who wish to apply for occupancy or purchase. HPD is further required to make recommendations to the mayor and city council on extending Local Law 64 beyond affordable units by July 1, 2021.

Designed to create transparency in the industry, developers and/or owners of affordable housing units are required to register their units with HPD so that New Yorkers know where the affordable units are and can easily apply for new and existing affordable housing. Local Law 64 also imposes fines on owners that fail to report to HPD.

Owners of affordable units

By July 1, 2020, owners (or their managing agent) will be able to use the website to offer an affordable unit for rent or sale, and accept applications for occupancy or purchase.

Annual reporting requirement

Owners of affordable units must annually report to HPD “Full Unit Information” for such units, in a time and manner established by HPD, as follows:

• Building address
• Unit or unit number
• SQFT of each unit (unless HPD deems the disclosure of such info is impractical)
• Number of bedrooms
• Contact information of owner or managing agent
• Status as occupied or unoccupied
• Description of the affordable housing program the unit is affiliated with
• The maximum lawful rent and the actual rent being charged, if any
• Further information HPD may require in the future

Owners of affordable units that are available for rent or sale must provide to HPD “Offered Unit Information,” in a time and manner established by HPD, as follows:

For units offered for rent:

• Proposed monthly rent, including any temporary rent reduction, the net effective rent and the applicable period
• Amount and description of any additional fees occupants must pay in addition to monthly rent

For co-op or condo units offered for sale:

• Proposed sale price
• Estimated property tax payments
• The utility services provided by owner, if any
• For new construction projects, a floor plan including room measurements for unit or substantially identical unit in the same dwelling (unless HPD deems impractical to disclose)
• For new construction projects, photos of each room in unit or those in a substantially identical unit in the same dwelling
• Number of floors and whether there is elevator access
• Pet policy
• Amenities and services and any fees related thereto: A/C, gym or pool, security guard or watchman, person to accept deliveries, intercoms
• Description of process to apply for occupancy, including deposit, fees, eligibility
• Contact info for additional unit information

Users of the website

By July 1, 2020, users of the online housing portal will be able to view available units, apply for occupancy, track the progress of applications, receive notifications of new units that become available and identify eligibility for same. HPD will provide portal users with incomes below 80% of AMI with a link to the website for the New York City Housing Authority (NYCHA).

Users will be able to view “Limited Unit Information” or “Offered Unit Information” for listed units, and by January 1, 2021, view “Full Unit Information” for listed units, provided that the user is a lawful leaseholder, unit owner or co-op shareholder of a unit entitled to a proprietary lease.

Penalties for owners

An owner who fails to provide information with respect to a dwelling unit pursuant to subdivision b of section 26-1802, shall be subject to a civil penalty for each month as follows until such violation is corrected:

• $100 per month for the first six-month period
• $250 per month for the second six-month period
• $1,000 per month for the third six-month period
• $2,000 per month for the fourth six-month period and for each month thereafter

While this HPD Housing Portal may be welcome news for potential renters and homebuyers in New York, it means developers and owners will need to report to HPD on each affordable unit in their portfolio, as well as each time such unit becomes available for rent or sale. This may be seen as overly burdensome and cost prohibitive for some owners, especially homeowners of affordable units. Of particular interest is the ability for HPD to build requirements into a regulatory agreement, thereby obviating the need to use the lottery. Nixon Peabody will keep a close watch on this issue for its for-profit and nonprofit developer clients and assist in navigating compliance.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.