A 2707: Enacts the housing development fund company fairness, preservation, and affordability act to clarify certain provisions relating to the dissolution and reincorporation of housing development fund companies; provides for tax exemptions and abatements for housing development fund companies.

  
  STATE OF NEW YORK ________________________________________________________________________ 2707 2025-2026 Regular Sessions  IN ASSEMBLY January 22, 2025 ___________ Introduced by M. of A. TAYLOR -- read once and referred to the Committee on Housing AN ACT to amend the private housing finance law, in relation to enacting the housing development fund company self-determination, preservation and affordability act The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "housing development fund company self-determination, preservation 3 and affordability act". 4 § 2. Legislative findings and declarations. 1. In 1966, the Legisla- 5 ture enacted Article 11 of the private housing finance law. Article 11 6 authorized the development of rental and cooperative housing that is 7 subject to certain income restrictions. The type of income-restricted 8 housing is referred to as housing development fund companies (HDFCs). 9 2. Beginning in the early 1980s, New York city adopted the HDFC form 10 of housing cooperative as a means to divest itself of -- and revitalize 11 -- its tax-foreclosed multi-family housing stock. At the time the city 12 was experiencing large-scale abandonment of its private low and middle- 13 income multi-family housing stock. In response to this housing crisis, 14 the city determined to turn over the ownership and management of many 15 city-owned tax-foreclosed multifamily buildings to the existing tenants 16 in the form of HDFC co-ops. 17 3. Previously, the city sold at auction nearly all of its tax-forec- 18 losed multi-family property to private investors - and that traditional 19 approach to disposing of tax foreclosed property had led to an acceler- 20 ating cycle of housing disinvestment and abandonment. The city's HDFC 21 initiative was in the city's own interests: it enabled the city to avoid 22 the counterproductive private auction process and to return the build- 23 ings to the tax rolls. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02813-01-5 
 A. 2707 2 1 4. Over the past four decades the city's HDFC initiative proved to be 2 one of New York's most enduring housing success stories. Tens of thou- 3 sands of resident-shareholders of HDFCs played an important role in the 4 stabilization and preservation of New York city's multi-family housing 5 stock in the period following the city's fiscal crisis of the 1970s and 6 1980s. The city's large-scale creation of HDFC co-ops was a major policy 7 innovation and was an important part of the city's response to the hous- 8 ing crisis of that era. Today, there are over 1,100 HDFC co-ops in New 9 York city. 10 5. All government and community stakeholders benefitted from the 11 large-scale creation of HDFCs. The city benefitted by reducing its enor- 12 mous portfolio of tax-foreclosed apartment buildings at a time when the 13 buildings were a substantial burden to the city and when there was 14 little in the way of a private market for these properties. The resi- 15 dents benefitted by the preservation and upgrading of their own build- 16 ings and by becoming homeowners for the first time. And the surrounding 17 communities benefitted by the stabilization of the neighborhood, the 18 upgrading of housing and by the transformation of a rental community 19 into a homeowning community. 20 6. When the city imposed regulatory controls on the city-sponsored 21 HDFCs, the regulatory controls placed on HDFCs were time-limited. 22 Consequently, the HDFCs that were created in the 1980s and 1990s have 23 regulatory controls that already have expired or will soon expire. For 24 this class of HDFCs, there is a great deal of uncertainty as to their 25 legal status and their financial future. 26 7. This legislation clarifies the legal status of HDFCs with expired 27 regulatory controls in a way that protects and promotes their autonomy 28 and self-governance while strengthening the inducements for these HDFCs 29 to voluntarily agree to continue to operate as affordable housing. 30 8. An important feature of city-sponsored HDFCs is the city's use of 31 its authority to enter into a "regulatory agreement" with the HDFC. 32 Under section 576 of the private housing finance law, either the state 33 or the municipal "supervisory agency" (i.e., HPD) may enter into a regu- 34 latory agreement with an HDFC if the agency advances public funds to the 35 HDFC. Under such section of the private housing finance law, every HDFC 36 regulatory agreement must provide that: 37 (1) Households must meet income eligibility guidelines, which are 38 defined by statute as six times the annual rent plus six percent of the 39 shareholder's "original investment" in the HDFC. See paragraph b of 40 subdivision 1 of section 576 of the private housing finance law. 41 (2) Profits must be used only for capital improvements or to reduce 42 rent/maintenance. Dividends cannot be paid to owners. See paragraphs c 43 and d of subdivision 1 of section 576 of the private housing finance 44 law. 45 (3) The property may not be sold or transferred without HPD approval 46 for so long as the regulatory agreement remains in effect and/or unless 47 and until any funds or mortgages owed to the city are paid in full. See 48 paragraph e of subdivision 1 of section 576 of the private housing 49 finance law. 50 (4) The HDFC may not be dissolved without HPD approval for so long as 51 the regulatory agreement remains in effect and/or unless and until any 52 funds or mortgages owed to the city are paid in full. See paragraph e of 53 subdivision 1 of section 576 of the private housing finance law. 54 9. Thus, under section 576 of the private housing finance law certain 55 key restrictions remains in effect only for so long as a regulatory 56 agreement remains in effect. Put differently, the city's authority to 
 A. 2707 3 1 impose section 576 restrictions (including restrictions on dissolution 2 of HDFCs and on the sale and disposition of HDFC property) is limited to 3 only those HDFCs that are subject to a regulatory agreement and does not 4 extend to HDFCs in which a regulatory agreement or mortgage is no longer 5 in effect. 6 10. The city applied its section 576 authority to HDFCs in two ways: 7 i.e. (1) some of the terms of the section 576 "regulatory agreement" 8 were incorporated into various HDFC incorporation documents and in the 9 deed conveying title to the property; and (2) a regulatory agreement was 10 incorporated into mortgage documents when the city made loans to HDFCs 11 to finance capital improvements. In each case the city imposed resale 12 restrictions that had a fixed term. At the inception of the HDFC program 13 in the early 1980s, city-sponsored resale restrictions imposed by the 14 sale documents expired in ten years. By the late 1980s, city-sponsored 15 resale restrictions imposed by the sale documents ran for 25 years. 16 Furthermore, resale restrictions that were made a part of city-sponsored 17 rehabilitation loans to HDFCs ran for the life of the loan -- i.e., 18 usually 15 to 25 years. 19 11. Thus, the city used section 576 of the private housing finance law 20 as a means to impose additional terms and conditions (including resale 21 restrictions) on the operation of the HDFC for a fixed term following 22 the establishment of the housing cooperative or during the life of a 23 city-sponsored loan to the HDFC. For the vast majority of HDFCs, these 24 restrictions have expired. 25 12. There are presently over 1,100 HDFCs in New York city containing 26 approximately 25,000 apartments. Of these HDFCs, approximately 20 27 percent are subject to regulatory agreements. A substantial number of 28 non-regulated HDFCs date from the 1980s and 1990s. These older HDFCs are 29 no longer subject to city resale restrictions that expired after either 30 ten years or 25 years following the incorporation of the HDFCs. 31 13. For as long as a particular city-imposed resale restrictions 32 remained in effect, an HDFC is subject to a detailed scheme of regu- 33 lations imposed by the city pursuant to section 576 of the private hous- 34 ing finance law. In general, HPD resale restrictions govern such impor- 35 tant issues of HDFC governance as income limitations for purchasers, 36 succession rights, sublet rights, flip taxes, HPD consent as a precondi- 37 tion to the sale of an HDFC building and HPD consent to the dissolution 38 of an HDFC. Upon the expiration of the city-imposed restrictions, the 39 HDFC is no longer subject to these externally imposed regulations. 40 14. An HDFC with expired regulatory controls nevertheless remains 41 subject to Article 11 of the private housing finance law as well as to 42 various governing documents, such as its certificate of incorporation, 43 deed restrictions, proprietary lease and by-laws. Most importantly, an 44 HDFC is required to provide housing for "persons of low income," as 45 defined in paragraph a of subdivision 3 of section 573 of the private 46 housing finance law. However, once an HDFC regulatory agreement or other 47 HPD-imposed income restriction has expired, nothing in the private hous- 48 ing finance law expressly precludes these HDFC co-ops from converting to 49 a non-HDFC co-op by reincorporating as a conventional co-op (and thereby 50 opting out of the remaining statutory restrictions imposed by the 51 private housing finance law). That circumstance raised the possibility 52 that some HDFCs may opt-out of the HDFC statute and become market-rate 53 housing - which would represent a loss to the city's inventory of 54 affordable housing stock. 55 15. A city-established HDFC is eligible to receive a partial real 56 estate tax exemption granted by the city pursuant to section 577 of the 
 A. 2707 4 1 private housing finance law. Pursuant to this authority, the city in 2 1989 enacted a partial tax exemption for most city-sponsored HDFCs. The 3 tax exemption is generally referred to as the "Division of Alternative 4 Management Programs" tax exemption, or "DAMP tax exemption". 5 16. The tax exemption runs for forty years and will expire in 2029. A 6 condition of the DAMP tax exemption is that the HDFC remain an HDFC for 7 the duration of the tax exemption. Hence, an HDFC that opt-outs of the 8 HDFC statute and become market-rate housing would be required to forfeit 9 the DAMP tax exemption. 10 17. The city in 2017 proposed local legislation that would revoke the 11 DAMP tax exemption from any HDFC that declined to sign a new regulatory 12 agreement with HPD. The proposed new regulatory agreement would contain 13 many provisions that would largely deprive HDFCs of autonomy and self- 14 determination, including the imposition of external fiscal monitors paid 15 for by HDFC income, new restriction on apartment sales and subletting, 16 and limitations on the assets and other real property owned by HDFC 17 shareholders. By 2019 the city abandoned the proposed legislation in the 18 face of widespread opposition by HDFC community groups and other stake- 19 holders. 20 18. Also in 2017, the city proposed new state legislation that would 21 re-regulate HDFCs and that would change the law to ensure that all HDFCs 22 remain subject to affordability controls in perpetuity. See S2543 (2017) 23 (proposed amendment to the private housing finance law). As stated in 24 the city's memorandum in support of S2543: 25 "(T)here is a great need for an amendment to clarify that the corpo- 26 rate purpose of an HDFC -- to provide affordable housing to persons and 27 families of low income -- is perpetual in duration. Absent the checks 28 and balances provided by the (proposed amendment to private housing 29 finance law, which would subject HDFCs for the time to the requirements 30 of the not-for-profit corporation law), there may be a great loss of 31 affordable housing." 32 19. Thus, the city expressly acknowledged that, under existing law, 33 HDFCs with expired regulatory agreements have the option of remaining as 34 an HDFC or, in the alternative, the option of converting to another form 35 of housing cooperative without affordability controls. S2453 was 36 intended to eliminate the second option. Ultimately, S2453 was not 37 enacted and the statutory law governing HDFCs remains unchanged. 38 20. Contrary to the city's 2017 statement, the New York Attorney 39 General issued an opinion in 2015 to the effect that HDFC cooperatives 40 could never opt-out of the PHFL and that they were subject to the 41 perpetual regulation of the HPD Commissioner. See New York Attorney 42 General, "Guidance on Housing Development Fund Corporations Seeking to 43 Transfer or Sell Property for, or Otherwise Convert Property to Market- 44 Rate Use" (hereafter "Guidance"). HPD joined in the Guidance. The Attor- 45 ney General reached this conclusion based on their determination that 46 the statutory term "amendment" - as used in subdivision 5 of section 573 47 of the private housing finance law - encompassed and implied the commis- 48 sioner's additional authority to consent to the dissolution of an HDFC. 49 The Attorney General's Guidance is incorrect as a matter of law, in that 50 it misconstrues the plain text of the HDFC statute as well as ignores 51 the distinct treatment of the concepts of "amendment" and "dissolution" 52 in other New York corporate law settings, including the business corpo- 53 ration law. 54 21. Consistent with the city's 2017 statement, HDFCs always have had 55 the right under the private housing finance law -- and continue to have 56 the right under the private housing finance law -- to dissolve and rein- 
 A. 2707 5 1 corporate under the business corporation law or other applicable law, 2 provided that the housing development fund company: (1) was formerly 3 subject to a regulatory agreement but such regulatory agreement has 4 expired and/or was formerly subject to contractual restrictions imple- 5 menting the requirements of section 576 of the private housing finance 6 law but that such contractual restrictions have expired; and (2) had 7 formerly received a tax exemption under section 577 of the private hous- 8 ing finance law but such tax exemption either has expired or is other- 9 wise no longer being received. 10 22. This legislation squarely addresses the legal uncertainty that 11 threatens the future of many city-sponsored HDFCs. More particularly, 12 this legislation has three overriding goals: (1) to protect and promote 13 the self-determination of HDFC co-ops; (2) to provide strong incentives 14 for HDFC co-ops with expired controls to agree to remain as affordable 15 housing; and (3) to ensure that the HDFC co-ops that agree to remain as 16 affordable housing are in sound condition and are economically self-suf- 17 ficient. These three overriding objectives are complementary. 18 23. The current HDFC tax exemption for most city-sponsored HDFCs 19 co-ops is scheduled to expire in 2029. Already, many financial insti- 20 tutions have indicated a reluctance to lend to HDFCs in light of the 21 financial uncertainty associated with the scheduled expiration of the 22 HDFC tax exemption in five years. This legislation will eliminate this 23 uncertainty by providing a permanent tax incentive for HDFCs. 24 24. Currently, HDFC co-ops receive a partial tax exemption - known as 25 "the DAMP tax benefit". The DAMP tax benefit takes the form of a cap on 26 assessed valuation per dwelling unit - currently $12,542. As previously 27 noted, this legislation removes the sunsetting of the DAMP tax exemption 28 and makes the tax exemption permanent. Furthermore, the legislation 29 allows HDFC co-ops to receive the greater of the DAMP tax exemption or 30 twice the tax abatement that most market-rate co-ops presently currently 31 receive under section 467-a of the real property tax law (but which HDFC 32 co-ops presently are ineligible to receive). This increased tax benefit 33 to HDFCs is a recognition that income-restricted HDFC co-ops are enti- 34 tled to greater benefits than market-rate co-ops. This increased tax 35 benefit is a vital means to promote and protect housing affordability 36 and to provide financial stability to HDFCs. The benefit also is 37 intended as an inducement for current HDFC co-ops (with expired regula- 38 tory controls) to make a long-term commitment to remain as income-res- 39 tricted HDFCs - rather than exercising their right to reincorporate as 40 another form of housing cooperative that is not subject to income 41 restrictions. 42 25. This legislation also establishes a mechanism to ensure that HDFCs 43 that receive the tax benefit comply with the new affordability require- 44 ments. As a condition of the continuing receipt of the tax benefit, each 45 HDFC is required to file an annual certification stating that it has 46 complied with the affordability requirements. HPD is authorized to 47 review and audit the sales records of the HDFC in order to ensure 48 compliance with these requirements. Furthermore, HPD has the right to 49 suspend or revoke the tax exemption and tax abatement if HPD determines 50 that HDFC has willfully not complied with the affordability require- 51 ments. 52 26. For the vast majority of HDFC co-ops, the proposed enhanced real 53 estate tax benefit -- together with the availability of below-market 54 interest financing available through HPD -- would be sufficient to 55 ensure both affordability and fiscal stability. However, for perhaps 10 56 to 20 percent of HDFCs -- which are in fair to poor financial condition 
 A. 2707 6 1 - something more is needed. In recognition of this special need of 2 economically distressed HDFCs, the legislation extends the authority of 3 the city of New York to offer special tax relief to HDFC co-ops that are 4 in severe fiscal distress and that are in danger of tax foreclosure by 5 reason of unpaid real estate taxes. Such tax relief is conditioned on 6 the HDFC co-op agreeing to enter into a special regulatory agreement in 7 which the city exercises appropriate oversight and monitoring of the 8 HDFC. Current legislation was enacted in 2002 and authorized tax 9 forgiveness only for HDFCs that "(as of) January 1, 2002 had outstanding 10 municipal real estate taxes relating to any period prior to January 1, 11 2001." This baseline year for tax forgiveness (i.e., tax arrears as of 12 2001) has never been updated to a more current tax year. The legislation 13 updates the baseline year so that the city has the flexibility to offer 14 tax forgiveness (in appropriate cases and subject to strict controls set 15 forth in current law) for HDFC co-ops that are at risk of tax foreclo- 16 sure. In this way an economically distressed HDFC co-op is saved from 17 tax foreclosure, and may thereby provide sustainable and affordable 18 housing for years to come. This is critically important - not just for 19 the HDFC shareholders themselves - but also for neighborhood stability. 20 27. In summary, this legislation provides a much needed permanent tax 21 incentive for HDFCs -- as well as targeted tax relief for economically 22 distressed HDFCs. The permanent tax benefit will eliminate the current 23 uncertainty surrounding the expiration of the DAMP tax exemption in 2029 24 - and will thereby ease the availability of mortgage financing for 25 HDFCs. Furthermore, the permanent tax benefit will serve as a strong 26 incentive for HDFCs with expired regulatory controls to affirmatively 27 choose to remain as affordable HDFC housing subject to income 28 restrictions -- consistent with democratic principles of self-gover- 29 nance. This approach is a matter of basic fairness and justice; is 30 consistent with the promises given to HDFCs over the past thirty years; 31 and is in full accord with how all other government-sponsored private 32 housing under the private housing finance law is treated (such as Mitc- 33 hell-Lama housing and Article V redevelopment companies). Most impor- 34 tantly, this approach will ensure the long-term economic viability of 35 affordable HDFC co-ops. 36 § 3. Subdivision 5 of section 573 of the private housing finance law, 37 as amended by chapter 410 of the laws of 1984, is amended to read as 38 follows: 39 5. The secretary of state shall not file the certificate of incorpo- 40 ration of any such corporation or any amendment thereto unless the 41 consent or approval of the commissioner or the supervising agency, as 42 the case may be, is affixed thereon or attached thereto. Consent to the 43 filing of such certificate of incorporation shall be based upon findings 44 by the commissioner or supervising agency as to the character and compe- 45 tence of the sponsor. For purposes of this subdivision, the term 46 "amendment" as applied to such corporation shall mean and include any 47 changes in a certificate of incorporation as authorized in section eight 48 hundred one of the business corporation law but shall not be deemed to 49 include a dissolution of such corporation pursuant to section eight 50 hundred five of the business corporation law. The dissolution of such 51 corporation does not require the consent or approval of the commissioner 52 or the supervising agency. A housing development fund company has the 53 right under this section and section five hundred seventy-six of this 54 article to dissolve and re-incorporate under the business corporation 55 law or other applicable law, provided that the housing development fund 56 company: 
 A. 2707 7 1 a. was formerly subject to a regulatory agreement but such regulatory 2 agreement has expired and/or was formerly subject to contractual 3 restrictions implementing the requirements of section five hundred 4 seventy-six of this article but such contractual restrictions have 5 expired; and 6 b. had formerly received a tax exemption and/or tax abatement pursuant 7 to section five hundred seventy-seven of this article and such tax 8 exemption and/or tax abatement has either expired or is otherwise no 9 longer being received. 10 § 4. Section 576 of the private housing finance law is amended by 11 adding a new subdivision 4 to read as follows: 12 4. A housing development fund company that is no longer subject either 13 to a regulatory agreement or to deed restrictions entered into with the 14 commissioner or supervisory agency shall continue to be subject to the 15 oversight of the commissioner or supervisory agency, subject to the 16 limitation set forth in paragraph (d) of subdivision one of section five 17 hundred seventy-seven of this article, provided that the housing devel- 18 opment fund company continues to elect to receive a tax exemption and/or 19 tax abatement pursuant to section five hundred seventy-seven of this 20 article. If such housing development fund company elects not to receive 21 a tax exemption and/or tax abatement pursuant to such section, then it 22 shall cease to be subject to the regulation and oversight of the commis- 23 sioner or supervisory agency. 24 § 5. Subdivision 1 of section 577 of the private housing finance law, 25 as amended by chapter 658 of the laws of 1967, paragraph (a) as amended 26 by chapter 428 of the laws of 1980, paragraph (c) as added by chapter 27 494 of the laws of 1995, and paragraph (d) as added by chapter 73 of the 28 laws of 2009, is amended to read as follows: 29 1. (a) The local legislative body of any municipality in which a 30 project of a housing development fund company is or is to be located may 31 exempt and abate the real property in such project from local and munic- 32 ipal taxes including school taxes, other than assessments for local 33 improvements, to the extent of all or part of the value of the property 34 included in the completed project. The tax exemption and tax abatement 35 shall operate and continue for [such period as may be provided by such 36 local legislative body, but in no event for a period of more than forty 37 years, commencing] so long as a housing development fund company remains 38 in compliance with the requirements of this section, and shall commence 39 in each instance from the date on which the benefits of such exemption 40 first became available and effective. The tax exemption and tax abate- 41 ment shall be applied to: 42 (i) newly created housing development fund companies that are subject 43 to regulatory agreement and/or contractual or deed restrictions imposed 44 by the commissioner or supervisory agency; 45 (ii) housing development fund companies that are presently subject to 46 a regulatory agreement and/or contractual or deed restrictions imposed 47 by the commissioner or supervisory agency; and 48 (iii) housing development fund companies that are not presently 49 subject to a regulatory agreement and are not presently subject to 50 contractual or deed restrictions imposed by the commissioner or supervi- 51 sory agency but that agree to the conditions of the tax exemption and 52 tax abatement as hereinafter described in paragraph (b) of this subdivi- 53 sion. 54 (b) In order for a housing development fund company described in 55 subparagraph (iii) of paragraph (a) of this subdivision to be eligible 56 for a tax exemption and tax abatement pursuant to this section, such 
 A. 2707 8 1 company shall be required, for so long as it receives such tax exemption 2 and tax abatement, to not approve a sale of an apartment unless the 3 purchaser of the apartment provides satisfactory proof of income and 4 unless the income of the purchaser is no greater than the income limita- 5 tion specified herein. Such income limitation shall be, at the election 6 of the housing development fund company, either (i) the apartment resale 7 requirement of paragraph b of subdivision one of section five hundred 8 seventy-six of this article; or (ii) a requirement that the income of a 9 purchaser of an apartment not exceed one hundred sixty-five percent of 10 the area median income, as determined from time to time by the United 11 States department of housing and urban development. As a condition of 12 the continuing receipt of such tax exemption and tax abatement, the 13 housing development fund company shall file an annual certification with 14 the commissioner or supervisory agency that the company has complied 15 with the requirements of this section. Such certification shall be 16 limited to a listing of apartments sold or transferred in the prior 17 twelve months and a statement that the income of the purchaser or trans- 18 feree of the apartment complies with the income requirement of this 19 paragraph, except that a transferee who is a member of the transferor's 20 family or household need not comply with such requirement. 21 (c) (i) The commissioner or supervisory agency may review and audit 22 the sales records of a housing development fund company in order to 23 ensure compliance with the requirements of this section. The commission- 24 er or supervisory agency shall have the authority to suspend or revoke 25 the tax exemption and tax abatement applicable to any housing develop- 26 ment fund company, in proportion to the percentage of dwelling units at 27 a housing development fund corporation not in compliance with this 28 section, if the commissioner determines that the company has willfully 29 violated the provisions of this section, so long as the housing develop- 30 ment fund company is provided with prior written notification as to each 31 specific instance of noncompliance and to which dwelling unit such non- 32 compliance is alleged. 33 (ii) A housing development fund company shall have the right to rebut 34 allegations of a willful violation of this section, and also to charge 35 and collect additional monies from any shareholder, including successors 36 and assigns, found by the commissioner or supervisory agency to have 37 willfully not complied with the requirements of this section so as to 38 recover expenses for all losses of tax exemptions and tax abatements and 39 so as to recover all expenses associated with responding to such allega- 40 tions by the commissioner or supervisory agency. 41 (iii) Any annual certification submitted pursuant to this section that 42 has been accepted for filing and that has not been subject to a suspen- 43 sion or revocation action by the commissioner or supervisory agency for 44 a period of five years shall be deemed correct and shall not be subject 45 to further audit or review by the commissioner or supervisory agency. 46 (d) The conditions set forth in paragraph (b) of this subdivision 47 shall be the sole and exclusive conditions governing the eligibility of 48 a housing development fund company described in subparagraph (iii) of 49 paragraph (a) of this subdivision for receipt of the tax exemption and 50 tax abatement authorized in paragraph (e) of this subdivision. 51 (e) For each eligible housing development fund company, the annual 52 amount of the tax exemption and tax abatement authorized pursuant to 53 this section shall be the greater of: 54 (i) twelve thousand five hundred forty-two dollars, equivalent to the 55 cap on assessed value per apartment of fifty thousand dollars in the two 
 A. 2707 9 1 thousand twenty-four tax year, and which shall increase by two and a 2 half percent per year in each subsequent tax year; or 3 (ii) the net reduction in real estate taxes resulting from two hundred 4 percent of the tax abatement for housing cooperatives authorized by 5 section four hundred sixty-seven-a of the real property tax law. 6 (f) Where a municipality acts on behalf of another taxing jurisdiction 7 in assessing real property for the purpose of taxation, or in levying 8 taxes therefor, the action of the local legislative body of such munici- 9 pality in granting such tax exemption shall have the effect of exempting 10 the real property in such project from local and municipal taxes includ- 11 ing school taxes, other than assessments for local improvements, levied 12 by or in behalf of both such taxing jurisdictions. 13 [(c)] (g) The local legislative body of any municipality may grant an 14 exemption under paragraph (a) of this subdivision to the real property 15 of a project of any entity to which it is authorized to make a loan 16 pursuant to section five hundred seventy-six-c of this article. 17 [(d)] (h) In a city having a population of one million or more, within 18 one hundred twenty days following receipt of a written submission from 19 the supervising agency requesting a tax exemption pursuant to paragraph 20 (a) of this subdivision for the real property containing the project of 21 a housing development fund company, the local legislative body shall 22 approve or disapprove by resolution the requested tax exemption. If the 23 local legislative body fails to take such action within one hundred 24 twenty days following receipt of such written submission from such 25 supervising agency, then the tax exemption requested by the supervising 26 agency shall be deemed approved pursuant to paragraph (a) of this subdi- 27 vision. 28 § 6. Paragraph (b) of subdivision 1 of section 577-b of the private 29 housing finance law, as amended by chapter 225 of the laws of 2004, is 30 amended to read as follows: 31 (b) on January first, two thousand [two] twenty-four, had outstanding 32 municipal real estate taxes relating to any period prior to January 33 first, two thousand [one] twenty-three. 34 § 7. This act shall take effect on the first of January next succeed- 35 ing the date on which it shall have become a law.