Florence Apartments will stay affordable - For Now

Five Year Contract Renewed with Owner

LINKS:

This bill provide will preserve approximately 80,000 affordable housing units that have government subsidies, including so called “expiring use” units across the state. It requires owners seeking to terminate affordability in a property to offer the property for sale to the local municipality or its designee so that affordability can be preserved. This bill is based on one that Representative Peisch filed last year and which was reported favorably out of the Housing Committee last year. The principal difference is that this bill allows for flexibility; it allows owners an exemption from the requirement to offer their properties for sale if they make a good faith effort to retain or obtain subsidies to keep units affordable for as long as possible, rather than requiring fixed percentages of affordability to apply to all buildings. This flexibility addresses the complexity and diversity of circumstances among at risk buildings. The bill provides for the following:

  • Notice: The owner must give a one-year notice to tenants and local and state governmental entities when an owner is going to terminate the affordability of a project that has been subject to long term affordable use restrictions or contracts. Terminating affordability includes prepaying a mortgage or contract, opting out of a current program, or not renewing an existing contract, like a project-based Section 8 contract.

  • Option to Purchase: If an owner decides to terminate, then the owner must give the municipality in which the building is located the option of purchasing the building at its fair market value. The municipality, in turn, may designate a purchaser for the building. A private entity, a non-profit, or a housing authority, are all eligible to be designated purchasers, as long as they agree to keep the building affordable for as long as possible.

  • Exemption: An owner may receive an exemption from having to offer the building for sale provided the owner has made a good faith effort to retain existing and obtain new governmental contracts that will keep the building affordable, as determined by the Department of Housing and Community Development.

  • Protections: The bill provides protections for low-income tenants who have to pay more rent or are displaced as a result the end of the affordability restrictions.

  • Oversight: The bill gives the Department of Housing and Community Development the responsibility to oversee compliance with the bill and to issue regulations.
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