In the final days of his tenure, Governor Cuomo signed the Housing Our Neighbors with Dignity Act (HONDA) into law. The law aims to convert “distressed” hotels and commercial properties into affordable housing options.
Specifically, the bill authorizes the New York State Housing Trust Fund Corporation to “finance the purchase, acquisition, holding or conversion of distressed hotels and commercial office properties for use as affordable permanent housing.” Properties would be owned, operated, and managed by a nonprofit organization after being purchased with state funds.
The law instructs NYSHTFC to define the term “distressed,” so specific eligibility criteria will be unknown until future regulations are released.
To meet the “affordable housing” criterion, residents of the new housing project must average below 50% of the area median income. No resident may earn above 80% of the area median income at the time their lease is signed.
This program is subject to state budget appropriation. The 2021 budget includes $100 million for this program. However, the bill’s sponsor, Sen. Michael Gianaris, feels this program could need up to $2.2 billion for successful implementation. Debate over an appropriate allocation is expected in 2022 budget negotiations.
The bill does not contain any zoning regulatory relief, meaning prospective applicants would need to get properties rezoned at the municipal level to proceed.
HONDA bill text can be found here. The BNP will keep you informed as related regulations are published and applications become available.
A new federal proposal also aims to convert underutilized commercial properties into housing. The Revitalizing Downtowns Act would provide a tax credit for redeveloping office or commercial space into residential space. The BNP recently submitted a memo in support for the Revitalizing Downtowns Act.