Pursuant to a recent amendment of the Private Housing Finance Law (PHFL) previously discussed in our January 23, 2023 client alert, owners of affordable housing properties are now permitted under certain circumstances to collect rents above the Legal Regulated Rent so long as a Regulatory Agreement is in place with a State or Municipal Agency, Public Benefit Corporation, or a Political Subdivision of the State and where a federal, state, or local program provides rental assistance for the housing accommodation.
PHFL Section 610 requires that the property be subject to a regulatory agreement with a state or municipal agency or public benefit corporation that permits the collection of such higher rents. NYC HPD has provided guidance to owners seeking to amend existing HPD regulatory agreements to enable collection of higher rental assistance rents. HPD and HDC will prioritize projects in their existing portfolio where additional rental subsidy will address urgent cash flow or repair needs or occupied rent stabilized projects in HPD’s development pipeline.
DHCR has issued the following new documents, effective immediately, concerning apartments taking advantage of the PHFL amendment:
- Form RA-LR3 Notice, to be attached to all leases as long as rental assistance is being provided
- Addendum to the Instructions for Filing Initial and Annual Rent Registrations with DHCR
In addition, DHCR has updated existing documents, effective immediately, to reflect the PHFL amendment, including its Rent Stabilization Rider, Renewal Lease Form, and Registration instructions and forms.
Interested owners of properties with HPD or HDC Regulatory Agreements may submit a request to amend existing regulatory agreements to permit collection of full subsidy rents. We will continue to update you as DHCR updates its guidance regarding requests for amendment of HFA/DHCR regulatory agreements.
If you have any questions or if you have a property subject to a Regulatory Agreement which you want to be considered for eligibility to amend your Regulatory Agreement and potentially collect subsidy amounts in excess of legal rent, please contact your trusted R&E attorney or Daniel M. Bernstein, Head of the firm’s Tax Incentives & Affordable Housing Department, and Zachary J. Rothken, Head of the firm’s Administrative Law Department, who authored the above.