HOME PROPERTIES OF NEW YORK INC
S-3, 2000-08-31
REAL ESTATE INVESTMENT TRUSTS
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As filed with the Securities and Exchange Commission
               on August 31, 2000
               Registration No.

                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                            --------------------
                                 FORM S-3
                          REGISTRATION STATEMENT
                                   Under
                         THE SECURITIES ACT OF 1933
                           ----------------------
                     HOME PROPERTIES OF NEW YORK, INC.
            (Exact name of registrant as specified in charter)
                         ------------------------
Maryland                                                16-1455126
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                    Identification No.)

                       850 Clinton Square Rochester,
                               New York 14604
                              (716) 546-4900
(Address, including zip code, and telephone number, including area code, of
                 registrant's principal executive offices)

                            -------------------
                          Ann M. McCormick, Esq.
               Vice President, Secretary and General Counsel
                     Home Properties of New York, Inc.
                             850 Clinton Square
                         Rochester, New York 14604
                              (716) 246-4105
                         Facsimile (716) 232-3147
 (Name, address, including zip code, and telephone number, including area
                        code, of agent for service)
                            -------------------
                                Copies to:
                         Deborah McLean Quinn, Esq.
                             Nixon Peabody LLP
                            1300 Clinton Square
                         Rochester, New York 14604
                              (716) 263-1307
                         Facsimile (716) 263-1600
                             ----------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
/ /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /x/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration statement
number of the earlier registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier registration statement for
the same offering. / /

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /


                      CALCULATION OF REGISTRATION FEE
Title of Each     Proposed       Proposed
Class of          Amount to      Maximum             Maximum
of Securities     to be          Offering Price      Aggregate      Registra-
Registered        Registered     Per Share (1)       Offering Price tion Fee
--------------    ----------     -------------       -------------- --------
Common Stock
 par value $.01  1,868,341 sh.(2)$ 28.1875           $52,663.862   $14,640.55

(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based upon the
average of the high and low sales prices reported on the New York Stock
Exchange on August 28, 2000 of $28.1875.

(2) Pursuant to Rule 416  under the Securities Act of 1933, this
Registration Statement also relates to an indeterminate number of
additional shares of Common Stock issuable with respect to the shares
registered hereunder in the event of a stock split, stock dividend or other
similar transaction.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.




<PAGE>
                             1,868,341 Shares

                      HOME PROPERTIES OF NEW YORK, INC.

                               COMMON STOCK

     All of the shares of common stock, par value $.01 per share of Home
Properties of New York, Inc. offered by this Prospectus are being offered
by the Selling Shareholders which hold those shares.  See "Selling
Shareholders."  We will not receive any proceeds of the sale of the shares
offered hereby.  The Common Stock is listed on the New York Stock Exchange
("NYSE") under the symbol "HME."  The last reported sale price of the
Common Stock on the NYSE was $ 28.1875 on August 28, 2000.

                           ---------------------

  You should carefully consider the material risks set forth under "Risk
   Factors" beginning on page 2 of this prospectus before purchasing any
                        shares of our common stock.

  Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary
                          is a criminal offense.
                           ---------------------
              The date of this prospectus is August 31, 2000.


<PAGE>
                             TABLE OF CONTENTS

Home Properties                                        1
Recent Developments                                    1
Risk Factors                                           2
Where You Can Find More Information                    9
Special Note Regarding Forward-Looking Statements      10
Selling Shareholders                                   10
Description of Capital Stock                           12
Common Stock                                           12
Preferred Stock                                        13
Restriction on Transfer Ownership Limits               19
Ownership Reports                                      21
Certain Other Provisions of Maryland Law and
   Charter Documents                                   21
Federal Income Tax Considerations                      23
Ratio of Earnings to Combined Fixed Charges
  and Preferred Dividends                              46
Plan of Distribution                                   46
Experts                                                46
Legal Matters                                          47



<PAGE>
     THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE MORE
DETAILED INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED
HEREIN OR THEREIN BY REFERENCE. REFERENCES TO "HOME PROPERTIES," "WE" OR
"US" IN THIS PROSPECTUS MEAN, EXCEPT AS THE CONTEXT OTHERWISE REQUIRES,
HOME PROPERTIES OF NEW YORK, INC., A MARYLAND CORPORATION, HOME PROPERTIES
OF NEW YORK, L.P., A NEW YORK LIMITED PARTNERSHIP (THE "OPERATING
PARTNERSHIP"), HOME PROPERTIES TRUST, A MARYLAND TRUST (THE "TRUST"), HP
MANAGEMENT, INC., A MARYLAND CORPORATION ("HP MANAGEMENT"), CONIFER REALTY
CORPORATION, A MARYLAND CORPORATION ("CONIFER REALTY" AND, TOGETHER WITH HP
MANAGEMENT, THE "MANAGEMENT COMPANIES"), AND ALL OTHER SUBSIDIARIES OF HOME
PROPERTIES ON A CONSOLIDATED BASIS.


                              HOME PROPERTIES

     We are a fully integrated, self-administered and self-managed real
estate investment trust, a REIT, and the 11th largest apartment company in
the United States.  With operations in select Northeast, Midwest, and Mid-
Atlantic markets, we own, operate, acquire, rehabilitate, and develop
apartment communities.  Currently, we operate 311 communities containing
48,661 apartment units.  Of these, we, along with our subsidiaries,
directly own 36,835 units in 136 communities.  We partially own and manage
as general partner 8,225 units, and we manage 3,601 units for other owners.
We also manage 1.7 million square feet of commercial space.

     We were incorporated in November 1993 as a Maryland corporation. We
are the general partner of Home Properties of New York, L.P., a New York
limited partnership through which we own, acquire and operate most of our
market rate apartments.  We frequently refer to Home Properties of New
York, L.P. as the "operating partnership."  Certain of our activities, such
as residential and commercial property management for others, development
activities and construction, development and redevelopment services are
carried on through two subsidiaries: Home Properties Management Inc. and
Conifer Realty Corporation.  We own 95% of the economic interest in these
subsidiaries while certain members of our management hold the remaining 5%
in order to satisfy certain technical tax requirements.  We commonly refer
to these two subsidiaries as the "Management Companies."

                            RECENT DEVELOPMENTS

     We have announced that we are considering strategic alternatives for
our affordable housing development subsidiary, Conifer Realty Corporation,
as we evaluate the role of affordable housing development in our strategic
growth plans.  The strategic alternatives we are considering include a sale
of all or a portion of the business of our affordable housing development
subsidiary.

     We have engaged Mercury Partners LLC as our financial advisor in
evaluating these alternatives. We expect that a sale or spin-off will
strengthen our long-term performance by increasing the availability of
working capital and allowing senior management to concentrate resources on
our core business of owning and operating market-rate apartment
communities.

     The development of affordable housing has been a successful and
rewarding business for us since we merged with the Conifer organization on
January 1, 1996. However, with the tremendous growth in our owned portfolio
of market-rate properties, which has grown six-fold since January 1, 1996,
development activities for the year ended December 31, 1999 generated only
approximately 2% of annual "funds from operations," or "FFO" per share.
(FFO is a primary earnings measure for equity REITs.) These development
activities have required a disproportionate allocation of our financial and
management resources. We plan to reach a decision regarding our affordable
housing development segment by year end 2000.


                               RISK FACTORS

     An  investment  in the common stock of Home Properties  involves
various  risks.  In addition to general  investment  risks and those
factors set forth  elsewhere in this Prospectus,  prospective investors
should consider, among other things, the following factors:

ASSIMILATION OF A SUBSTANTIAL NUMBER OF NEW ACQUISITIONS.

     Since our formation, we have undertaken a strategy of aggressive
growth through acquisitions.  Our ability to manage its growth effectively
requires us, among other things, to successfully apply our experience in
managing our existing portfolio to an increased number of properties.  In
addition, we will be required to successfully manage the integration of a
substantial number of new personnel.  There can be no assurances that we
will be able to integrate and manage these operations effectively or
maintain or improve on their historical financial performance.

REAL ESTATE FINANCING RISKS

     GENERAL.  Home Properties is subject to the customary risks associated
with debt financing including the potential inability to refinance existing
mortgage indebtedness upon maturity on favorable terms.  If a property is
mortgaged to secure payment of indebtedness and we are unable to meet its
debt service obligations, the property could be foreclosed upon.  This
could adversely affect Home Properties' cash flow and, consequently, the
amount available for distributions to stockholders.

     NO LIMITATION ON DEBT.  The Board of Directors has adopted a policy of
limiting Home Properties' indebtedness to approximately 50% of its total
market capitalization (i.e., the market value of issued and outstanding
shares of Common Stock and limited partnership interests in the Operating
Partnership ("Units") plus total debt), but the organizational  documents
of Home Properties do not contain any limitation on the amount or
percentage of indebtedness, funded or otherwise, we may incur.
Accordingly, the Board of Directors could alter or eliminate its current
policy on borrowing.  If this policy were changed, Home Properties could
become more highly leveraged, resulting in an increase in debt service that
could adversely affect our ability to make expected distributions to its
stockholders and an  increased risk of default on our indebtedness.  Home
Properties' debt to total market capitalization ratio fluctuates based on
many factors, including the timing of acquisitions and financings as well
as the market value for our equity securities.  Our bank agreements and
certain agreements with holders of our preferred stock limit the amount of
indebtedness Home Properties may incur without adverse economic effects
such as increased preferred dividends, termination of our credit line and
possible defaults.

     EXISTING DEBT MATURITIES.   Home Properties is subject to the risks
normally associated with debt financing, including the risk that our cash
flow will be insufficient to meet the required payments of principal and
interest.  Because much of the financing is not fully self-amortizing, we
anticipate that only a portion of the principal of Home Properties'
indebtedness will be repaid prior to maturity.  So, we will need to
refinance debt.  Accordingly, there is a risk that we will not be
successful in refinancing existing indebtedness or that the terms of such
refinancing will not be as favorable as the terms of the existing
indebtedness.  Home Properties aims to stagger its debt maturities with the
goal of minimizing the amount of debt which must be refinanced in any year.

REAL ESTATE INVESTMENT RISKS

     GENERAL RISKS.  Real property investments are subject to varying
degrees of risk.  If our communities do not generate revenues sufficient to
meet operating expenses, including debt service and capital expenditures,
Home Properties' cash flow and ability to make distributions to its
stockholders will be adversely affected.  A multifamily apartment
community's revenues and value may be adversely affected by the general
economic climates; the local economic climate; local real estate
considerations (such as over supply of or reduced demand for apartments);
the perception by prospective residents of the safety, convenience and
attractiveness of the communities or neighborhoods in which they are
located and the quality of local schools and other amenities; and
increased operating costs (including real estate taxes and utilities).
Certain significant fixed expenses are generally not reduced when
circumstances cause a reduction in income from the investment.

     OPERATING RISKS.  Home Properties is dependent on rental income from
our apartment communities to pay operating  expenses and to make cash
distributions to our stockholders.  If we are unable to attract and retain
residents or if our residents are unable, due to an adverse change in the
economic condition of the region or otherwise, to pay their rental
obligations, our ability to make expected distributions will be adversely
affected.

     ILLIQUIDITY OF REAL ESTATE.  Real estate investments are relatively
illiquid and,  therefore, Home  Properties has limited ability to vary its
portfolio quickly in response to changes in economic or other conditions.
In addition, the prohibition in the Internal Revenue Code on REITs  holding
property for sale and related regulations may affect our ability to sell
properties without adversely affecting distributions to stockholders.  A
significant number of our properties were acquired using Units under
agreements which restrict our ability to sell such properties in
transactions which would create current taxable income to the former
owners.

COMPLIANCE WITH LAWS AND REGULATIONS.

     Many laws and governmental regulations are applicable to our
properties and changes in these laws and regulations,  or their
interpretation by agencies and the courts, occur frequently. Under the
Americans with Disabilities Act of 1990 (the "ADA"), all places of public
accommodation are required to meet certain federal requirements related to
access and use by disabled persons. These requirements became effective in
1992. Compliance with the ADA requires removal of structural barriers to
handicapped access in certain public areas of the Properties, where such
removal is "readily achievable." The ADA does not, however, consider
residential  properties,  such as  apartment  communities,  to be public
accommodations or commercial facilities, except to the extent portions of
such facilities, such as a leasing office, are open to the public. A number
of additional federal, state and local laws exist which also may require
modifications to the Properties, or restrict certain further renovations
thereof, with respect to access thereto by disabled persons. For example,
the Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment
communities first occupied after March 13, 1990 to be accessible to the
handicapped. Noncompliance with the ADA or the FHAA could result in the
imposition of fines or an award of damages to private litigants. Although
management believes that the Properties are substantially in compliance
with present requirements,  Home Properties may incur additional costs in
complying with the ADA for both existing properties and properties acquired
in the future. Home Properties believes that the Properties that are
subject to the FHAA are in compliance with such laws.

     Under the federal Fair Housing Act and state fair housing  laws,
discrimination on the basis of certain protected classes is prohibited.
Home Properties has a policy against any kind of discriminatory behavior
and trains its employees to avoid discrimination or the appearance of
discrimination. There is no assurance, however, that an employee will not
violate Home Properties' policy against discrimination and violate the fair
housing laws. Such a violation could subject Home Properties to legal
action and the possible awards of damages.

     Under various laws, ordinances and regulations relating to the
protection of the environment, a current or previous owner or operator of
real estate may be held liable for the costs of removal or remediation of
certain hazardous or toxic substances located on, under or in the property.
These laws often impose liability without regard to whether the owner or
operator was responsible for, or even knew of, the presence of such
substances. The presence of contamination from hazardous or toxic
substances, or the failure to remediate such contaminated property
properly, may adversely affect the owner's ability to rent or sell the
property or use the property as collateral.  Independent environmental
consultants conducted "Phase  I"  environmental audits (which involve
visual inspection but not soil or groundwater analysis) of substantially
all of the Properties owned by Home Properties prior to their acquisition
by Home Properties.  The Phase I audit reports did not reveal any
significant issues of environmental concern, nor are we aware of any
environmental liability that we believe would have a material adverse
effect on  Home Properties.  There is no assurance that Phase I reports
would reveal all environmental liabilities or that environmental conditions
not known to us may exist now or in the future on existing properties or
those subsequently acquired which would result in liability to Home
Properties for remediation or fines, either under existing laws and
regulations or future changes to such requirements.  If compliance with the
various laws and regulations, now existing or hereafter adopted, exceeds
our budgets for such items, our ability to make expected distributions
could be adversely affected.

     COMPETITION.  Home Properties plans to continue to acquire additional
multifamily  residential properties in the Northeast, Midwest and Mid-
Atlantic regions of the United States. There are a number of multifamily
developers and other real estate companies that compete with Home
Properties in seeking properties for acquisition, prospective residents and
land for development. Most of our Properties are in developed areas where
there are other properties of the same type. Competition from other
properties may affect Home Properties' ability to attract and retain
residents, to increase rental rates and to minimize expenses of operation.
Virtually all of the leases for the Properties are short-term leases
(generally, one year or less).

     UNINSURED LOSSES. Certain extraordinary losses may not be covered by
Home Properties' comprehensive liability, fire, extended and rental loss
insurance. If an uninsured loss occurred, we could lose our investment in
and cash flow from the affected Property (but would be required to repay
any indebtedness secured by that Property and related taxes and other
charges).

FEDERAL INCOME TAX RISKS.

     General. We believe that we have been organized and have operated in
such manner so as to qualify as a REIT under the Internal Revenue Code,
commencing with our taxable year ended December 31, 1994. A REIT generally
is not taxed at the corporate level on income it currently distributes to
its shareholders as long as it distributes currently at least 95% of its
taxable income (excluding net capital gain).  This requirement will be
reduced to 90% in years beginning after December 31, 2000.  No assurance
can be provided, however, that we will qualify as a REIT or that new
legislation, Treasury Regulations, administrative interpretations or court
decisions will not significantly change the tax laws with respect to our
qualification as a REIT or the federal income tax consequences of such
qualification.

     Required distributions and payments.  In order to continue to qualify
as a REIT, we currently are required each year to distribute to our
shareholders at least 95% of our taxable income (excluding net capital
gain), and we will be required to distribute 90% of this amount for years
beginning after December 31, 2000.  In addition, we will be subject to a 4%
nondeductible excise tax on the amount, if any, by which certain
distributions made by us with respect to the calendar year are less than
the sum of 85% of our ordinary income, 95% of our capital gain net income
for that year, and any undistributed taxable income from prior periods.  We
intend to make distributions to our shareholders to comply with the 95%
distribution requirement and to avoid the nondeductible excise tax and will
rely for this purpose on distributions from the Operating Partnership.
However, differences in timing between taxable income and cash available
for distribution could require us to borrow funds or to issue additional
equity to enable us to meet the 95% distribution requirement (and therefore
to maintain our REIT status) and to avoid the nondeductible excise tax.
The Operating Partnership is required to pay (or reimburse us, as its
general partner, for) certain taxes and other liabilities and expenses that
we incur, including any taxes that we must pay in the event we were to fail
to qualify as a REIT.  In addition, because we are unable to retain
earnings (resulting from our distribution requirements), we will generally
be required to refinance debt that matures with additional debt or equity.
There can be no assurance that any of these sources of funds, if available
at all, would be available to meet our distribution and tax obligations.

     Adverse consequences of our failure to qualify as a REIT.  If we fail
to qualify as a REIT, we will be subject to federal income tax (including
any applicable alternative minimum tax) on our taxable income at regular
corporate rates.  In addition, unless entitled to relief under certain
statutory provisions, we will be disqualified from treatment as a REIT for
the four taxable years following the year during which REIT qualification
is lost.  The additional tax burden on us would significantly reduce the
cash available for distribution by us to our shareholders.  Our failure to
qualify as a REIT could reduce materially the value of our common stock and
would cause all our distributions to shareholders to be taxable as ordinary
income to the extent of our current and accumulated earnings and profits
(although, subject to certain limitations under the Internal Revenue Code,
corporate distributees may be eligible for the dividends received deduction
with respect to these distributions).  See "Failure to Qualify."

     The Operating Partnership's failure to qualify as a partnership.  We
believe that the Operating Partnership qualifies as a partnership for
federal income tax purposes.  No assurance can be provided, however, that
the IRS will not challenge its status as a partnership for federal income
tax purposes, or that a court would not sustain such a challenge.  If the
IRS were to treat the Operating Partnership as an entity that is taxable as
a corporation, we would cease to qualify as a REIT because the value our
ownership interest in the Operating Partnership would exceed 5% of our
assets and because we would be considered to hold more than 10% of the
voting securities of another corporation.  See "Taxation of Home Properties
- Asset Tests."  Also, the imposition of a corporate tax on the Operating
Partnership would reduce significantly the amount of cash available for
distribution to its limited partners.  See "Tax Aspects of the Operating
Partnership."  Finally, the classification of the Operating Partnership as
a corporation would cause its limited partners to recognize gain (upon the
event that causes the Operating Partnership to be classified as a
corporation) at least equal to their "negative capital accounts" (and
possibly more, depending upon the circumstances).

LIMITS ON OWNERSHIP

     OWNERSHIP LIMIT. In order for Home Properties to maintain its
qualification  as a REIT, not more than 50% in value of our outstanding
stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities) at any time during the
last half of its taxable year.  Home Properties has limited actual and
beneficial ownership of the issued and outstanding shares of common stock
by any single stockholder to 8.0% of the outstanding shares. Shares of
common stock held by certain entities, such as qualified pension plans, are
treated as if the beneficial owners of such entities were the holders of
the Common Stock.  These restrictions can be waived by the Board of
Directors if it were satisfied, based upon the advice of tax counsel or
otherwise, that such action would be in the best interests of Home
Properties.   Waivers have been granted to certain institutional investors
in connection with the sale of our Preferred Stock.  Shares acquired or
transferred in breach of the limitation may be redeemed by Home Properties
for the lesser of the price paid or the average closing price for the ten
trading days immediately preceding redemption or may be sold at the
direction of Home Properties. A transfer of shares of Common Stock to a
person who, as a result of the transfer, violates the ownership limit will
be void and the shares will automatically be converted into shares of
"Excess Stock", which is subject to a number of limitations. See
"Description of Capital Stock -- Restrictions on Transfer" for additional
information regarding the ownership limits.

CHANGE OF CONTROL

     The  Articles of Amendment and Restatement of the Articles of
Incorporation, as amended (the "Articles of Incorporation"), authorize the
Board of Directors to issue up to a total of 80 million shares of Common
Stock and 10 million shares of preferred stock and to establish the rights
and preferences of any shares issued. Further, under the Articles of
Incorporation, the stockholders do not have cumulative voting rights.

     The percentage ownership limit, the issuance of preferred stock in the
future and the absence of cumulative voting rights could have the effect
of: (i) delaying or preventing a change of control of Home Properties even
if a change in control were in the stockholders' interest; (ii) deterring
tender offers for the Common Stock that may be beneficial to the
stockholders; or (iii) limiting the opportunity for stockholders to receive
a premium for their Common Stock that might otherwise exist if an investor
attempted to assemble a block of Shares in excess of the percentage
ownership limit or otherwise to effect a change of control of Home
Properties.

     We have various agreements which may have the effect of discouraging a
change of control of Home Properties due to the costs involved.  The
Articles Supplementary to our Articles of Incorporation under which several
series of our outstanding preferred stock were issued provide that upon a
change of control of Home Properties or the Operating Partnership, under
certain circumstances, the holders of such preferred stock may require us
to redeem it.  Also, to assure that our management has appropriate
incentives to focus on our business and Properties in the face of a change
of control situation, we have adopted an executive retention plan which
provides some key employees with salary, bonus and certain benefit
continuation in the event of a change of control.

POTENTIAL CONFLICTS OF INTEREST

     Unlike persons acquiring Common Stock, our executive officers own most
of their interest in Home Properties through Units. As a result of their
status as holders of Units, the executive officers and other limited
partners may have interests that conflict with stockholders with respect to
business decisions affecting Home Properties and the Operating Partnership.
In particular, certain executive officers may suffer different or more
adverse tax consequence than Home Properties upon the sale or refinancing
of some of the Properties as a result of unrealized gain attributable to
certain Properties. Thus, executive officers and the stockholders may have
different objectives regarding the appropriate pricing and timing of any
sale or refinancing of Properties. In addition, executive officers of Home
Properties, as limited partners of the Operating Partnership, have the
right to approve certain fundamental transactions such as the sale of all
or substantially all of the assets of the Operating Partnership, merger or
consolidation or dissolution of the Operating Partnership and certain
amendments to the Operating Partnership Agreement.

     We manage multifamily residential properties through the Operating
Partnership and commercial and development properties and certain
multifamily residential properties not owned by Home Properties through the
Management Companies. As a result, officers of Home Properties will devote
a significant portion of their business time and efforts to the management
of properties not owned by Home Properties.  Some individuals who are both
officers and directors of Home Properties have a significant interest in
certain of the managed properties as the only stockholders of the general
partners of the partnerships that own such managed properties and as
holders of other ownership interests. Accordingly, such officers will have
conflicts of interest between their fiduciary obligations to the
partnerships that own such managed properties and their fiduciary
obligations as officers and directors of Home Properties, particularly with
respect to the enforcement of the management contracts and timing of the
sale of the managed properties.  To the extent decisions involve
significant issues for Home Properties, our independent directors will make
the determinations in the best interest of Home Properties.  In order to
comply with technical requirements of the Internal Revenue Code pertaining
to the qualification of REITs, the Operating Partnership owns all of the
outstanding non-voting common stock (990 shares) of one of the Management
Companies, Home Properties Management, Inc., and Norman and Nelson
Leenhouts own all of the outstanding voting common stock (52 shares). The
Operating Partnership also owns all of the outstanding non-voting common
stock (891 shares) of the other Management Company, Conifer Realty
Corporation, and Norman and Nelson Leenhouts and Richard Crossed own all of
the outstanding voting common stock (48 shares).  As a result, although
Home Properties will receive substantially all of the economic benefits of
the business carried on by the Management Companies through Home
Properties's right to receive dividends, Home Properties will not be able
to elect directors and officers of the Management Companies and, therefore,
Home Properties's ability to cause dividends to be declared or paid or
influence the day-to-day operations of the Management Companies will be
limited. Furthermore, although Home Properties will receive a management
fee for managing the managed properties, this fee has not been negotiated
at arm's length and may not represent a fair price for the services
rendered.

SHARES AVAILABLE FOR FUTURE SALE

     Sales of substantial amounts of shares of Common Stock in the public
market or the perception that such sales might occur could adversely affect
the market price of the Common Stock. The Operating Partnership has issued
approximately 15,784,602 Units through August 31, 2000 to persons other than
Home Properties or the Trust which may be exchanged on a one-for-one basis
for shares of Common Stock under certain circumstances.  We have issued
Series A Convertible Preferred Stock, Series B Cumulative Convertible
Preferred Stock, Series C Cumulative convertible Preferred Stock and Series
D Cumulative Convertible Preferred Stock, which are convertible into
approximately 6,163,000 shares of Common Stock in the aggregate. In
addition, as of August 31, 2000, Home Properties has granted options to
purchase approximately 2,405,000 shares of Common Stock to certain
directors, officers and employees of Home Properties.

     All of the shares of Common Stock issuable upon the exchange of Units
or the exercise of options will be "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act") and may not be transferred unless they are registered
under the Securities Act or are otherwise transferrable under Rule 144.
Home Properties has filed or expects to file registration statements with
respect to such shares of Common Stock, thereby allowing shares issuable
under our stock benefit plans and in exchange for Units to be transferred
or resold without restriction under the Securities Act.  This Prospectus
relates to the resale by the holders thereof of up to 1,868,341 shares
issuable to the selling shareholders upon exchange of their Units of
limited partnership interest in the Operating Partnership for common stock.


                    WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy reports, statements
or other information at the SEC's public reference rooms in Washington
D.C., New York, New York or Chicago, Illinois. Please call the SEC at 1-
800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from commercial document retrieval
services and at the web site maintained by the SEC at http://www.sec.gov.
You can also review copies of our SEC filings at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

     We have filed with the SEC a registration statement on Form S-3 to
register the securities.  This prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information set forth in the registration statement. For further
information you may refer to the registration statement and to the exhibits
and schedules filed as part of the registration statement. You can review
and copy the registration statement and its exhibits and schedules at the
public reference facilities maintained by the SEC as described above. The
registration statement, including its exhibits and schedules, is also
available on the SEC's web site.

     The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus and the information
that we file with the SEC later will automatically update and supersede
this information. We incorporate by reference the documents listed below
and any future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"):

     - - Annual Report on Form 10-K/A for the fiscal year ended December
     31, 1999;

     - - Quarterly Reports on Form 10-Q for the quarterly periods ended
     March 31, 2000 and June 30, 2000;

     - - Current Reports on Form 8-K with respect to Item 2, filed April 5,
     2000, and Form 8-K/A amending such filing, filed May 22, 2000; Form 8-
     K with respect to Item 5, filed May 22, 2000, Form 8-K/A amending such
     filing, filed June 9, 2000,  Form 8-K, with respect to Item 5, filed
     June 12, 2000; Form 8-K, with respect to Item 5, filed June 30, 2000;
     and Form 8-K, with respect to Item 5, filed August 31, 2000; and

     - - The description of the common stock contained in our registration
     statement on Form 8-A filed under Section 12 of the Exchange Act,
     including all amendments and reports filed for the purpose of updating
     that description.


     You may request a copy of these filings, at no cost, by writing or
telephoning us at: Home Properties of New York, Inc., Attention: Ann M.
McCormick, Secretary, 850 Clinton Square, Rochester, New York 14604;
telephone number (716) 546-4900.

     You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different or additional
information. You should not assume that the information in this prospectus
or any supplement is accurate as of any date other than the date on the
front of those documents.

             SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Prospectus contains, or incorporates by reference, statements
that may be deemed to be "forward-looking" within the meaning of Section
27A of the Securities Act, and Section 21E of the Exchange Act.  Although
Home Properties believes expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no assurance
that its expectations will be achieved. Factors that may cause actual
results to differ include general economic and local real estate
conditions, other conditions that might affect operating expenses, and the
timely completion of repositioning activities within anticipated budgets,
the actual pace of future acquisitions and developments, and continued
access to capital to fund growth.  Home Properties' actual results could
differ materially from those set forth in the forward-looking statements.
Other factors that might cause such a difference are discussed in the
section entitled "Risk Factors."

                           SELLING SHAREHOLDERS

     The partners of the Operating Partnership may from time to time tender
their Units of limited partnership interest to the Operating Partnership.
Home Properties may give notice to such partners that Home Properties will
acquire such Units in exchange for shares of Common Stock; a right which we
refer to as the LP purchase right.  All of the shares being offered hereby
are being sold by certain partners in the Operating Partnership who may
acquire shares of Common Stock in exchange for their Units pursuant to the
LP purchase right and then wish to sell those shares.  We refer to these
persons as the Selling Shareholders.  Although none of the Selling
Shareholders has indicated a present intent to tender their Units which
would trigger Home Properties's right to issue shares of Common Stock to
them under the LP Purchase Right, Home Properties is required, pursuant to
the terms of various registration rights agreements, to file the
registration statement of which this Prospectus forms a part registering
such shares for resale under the Securities Act.  Home Properties is
bearing all costs of this registration.  Home Properties will not receive
any proceeds from the sale of the shares offered hereby.

     The following table sets forth certain information regarding the
Selling Shareholders' ownership of Units and the number of shares of Common
Stock which may be issued pursuant to the LP purchase right which are
registered for resale under the registration statement of which this
Prospectus forms a part.  (Other partners of the Operating Partnership may
sell the shares of Common Stock they acquire in exchange for their Units
under separate registration statements filed with the SEC covering such
shares.)  Because the Selling Shareholders may sell all, some or none of
the shares registered for resale, no estimate can be made concerning the
number of shares of Common Stock issued in exchange for Units that will be
offered hereby or the number of shares or Units that each Selling
Shareholder will own upon completion of the offering contemplated by this
Prospectus.

                                             Number of Shares
                         Units Owned              Registered for Sale
     Name                Prior to Offering        in Offering

Herbert J. Siegel                 1,147               1,147
Louis J. Siegel                     143                 143
Andrew N. Siegel                    143                 143
Ronald Altman                   162,062             162,062
Cottonwood Associates             2,446               2,446
Estate of David M. Dolgenos     556,675             556,675
Norman Feinberg                 162,057             162,057
Gateside-Bryn Mawr Company, L.P.  5,603               5,603
King Road Associates             22,899              22,899
Sagar Points, Inc.               58,858              58,858
Staf-Arms Corp.                 225,689             225,689
Helene Sterling Trust Under
  Trust dated 4/14/89             6,398               6,398
Macomb Apartments Limited
  Partnership                   151,672             151,672
Deerfield Woods Venture
  Limited Partnership            72,684              72,684
Lois M. Brodsky                  29,324              29,324
Roni Slavin Pekins                5,865               5,865
Evelyn Schabb                    29,324              29,324
The Slavin Children Trust        58,649              58,649
Doris E. Slavin                 117,297             117,297
James M. Slavin                  14,662              14,662
Jeffrey Zane Slavin               5,865               5,865
Jonathan M. Slavin               14,662              14,662
Sanford Slavin                  158,352             158,352
SS Associates, LLC                5,865               5,865
     Total                    1,868,341           1,868,341



                       DESCRIPTION OF CAPITAL STOCK

     The authorized capital stock of Home Properties consists of:

     - 80 million shares of common stock, $0.01 par value, of which
21,137,978 shares were outstanding on August 31, 2000;

     - 10 million shares of preferred stock, $0.01 par value,

          -- 1,666,667 shares of which have been designated Series A
Convertible Preferred Stock (the "Series A preferred stock"), all of
which were outstanding as of August 31, 2000

          -- 2,000,000 shares of which have been designated Series B
Convertible Cumulative Preferred Stock (the "Series B preferred stock"), all
of which were outstanding as of August 31, 2000,

          -- 600,000 shares of which have been designated Series C
Convertible Cumulative Preferred Stock (the "Series C preferred stock"),
all of which are outstanding as of August 31, 2000; and

          --500,000 shares of which have been designated Series D
preferred stock, 250,000 of which were outstanding as of August 31, 2000

     - 10 million shares of "excess stock," $0.01 par value, of which no
shares were outstanding on such date.

For more detail about our Articles of Incorporation and the Articles
Supplementary thereto relating to the Preferred Stock (sometimes
collectively referred to as our "Articles of Incorporation" or "charter"),
and our bylaws you should refer to the charter and bylaws, which have been
filed as exhibits to other reports incorporated by reference into this
prospectus. In addition, for a discussion of limitations on the ownership
of our capital stock, you should refer to the section entitled "Risk
Factors" in this prospectus.

                               COMMON STOCK

     All of the shares of Common Stock offered by this prospectus will be
duly authorized, fully paid, and nonassessable when issued in exchange for
the Units in the Operating Partnership.  Upon conversion of the Series D
preferred stock. Holders of the Common Stock will have no conversion,
redemption, sinking fund or preemptive rights; however, shares of Common
Stock will automatically convert into shares of Excess Stock as described
below. Under the Maryland General Corporation Law ("MGCL"), stockholders
are generally not liable for Home Properties' debts or obligations, and the
holders of shares will not be liable for further calls or assessments by
Home Properties. Subject to the provisions of Home Properties' Articles of
Incorporation regarding Excess Stock described below, all shares of Common
Stock have equal dividend, distribution, liquidation and other rights and
will have no preference or exchange rights.

     Subject to the right of holders of Preferred Stock to receive
preferential distributions, the holders of the shares of Common Stock will
be entitled to receive distributions in the form of dividends if and when
declared by the Board of Directors of Home Properties out of funds legally
available therefor, and, upon liquidation of Home Properties, each
outstanding share of Common Stock will be entitled to participate pro rata
in the assets remaining after payment of, or adequate provision for, all
known debts and liabilities of Home Properties, including debts and
liabilities arising out of its status as general partner of the Operating
Partnership, and any liquidation preference of issued and outstanding
Preferred Stock. Home Properties intends to continue paying quarterly
distributions.

     The holder of each outstanding share of Common Stock is entitled to
one vote on all matters presented to stockholders for a vote, subject to
the provisions of Home Properties' Articles of Incorporation regarding
Excess Stock described below. As described below, the Board of Directors of
Home Properties has, and may in the future, grant holders of one or more
series of Preferred Stock the right to vote with respect to certain matters
when it fixes the attributes of such series of Preferred Stock. Pursuant to
the MGCL, Home Properties cannot dissolve, amend its charter, merge with or
into another entity, sell all or substantially all its assets, engage in a
share exchange or engage in similar transactions unless such action is
approved by stockholders holding a majority of the outstanding shares
entitled to vote on such matter. In addition, the Second Amended and
Restated Partnership Agreement of the Operating Partnership, as amended
requires that any merger or sale of all or substantially all of the assets
of Operating Partnership be approved by partners holding a majority of the
outstanding Units, excluding Operating Partnership Units held by Home
Properties or Home Properties Trust. Home Properties' Articles of
Incorporation provide that its Bylaws may be amended by its Board of
Directors.

     The holder of each outstanding share of Common Stock is entitled to
one vote in the election of directors who serve for terms of one year.
Holders of the shares of Common Stock will have no right to cumulative
voting for the election of directors. Consequently, at each annual meeting
of stockholders, the holders of a majority of the shares entitled to vote
in the election of directors will be able to elect all of the directors,
subject to certain rights of the holders of Preferred Stock, described
below. Directors may be removed only for cause and only with the
affirmative vote of the holders of a majority of the shares entitled to
vote in the election of directors.

                              PREFERRED STOCK

     We may issue shares of Preferred Stock from time to time, in one or
more series, as authorized by the Board of Directors of Home Properties.
The Board of Directors will fix the attributes of any Preferred Stock that
it authorizes for issuance. Because the Board of Directors has the power to
establish the preferences and rights of each series of Preferred Stock, it
may afford the holders of any series of Preferred Stock preferences, powers
and rights, voting or otherwise, senior to the rights of holders of shares
of Common Stock. The issuance of Preferred Stock could have the effect of
delaying or preventing a change in control of Home Properties.

     Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of Home Properties, then, before any distribution or
payment shall be made to the holders of any shares of Common Stock, any
Excess Stock or any other class or series of capital stock of Home
Properties ranking junior to any outstanding Preferred Stock in the
distribution of assets upon any liquidation, dissolution or winding up of
Home Properties, the holders of shares of each series of Preferred Stock
shall be entitled to receive out of assets of Home Properties legally
available for distribution to shareholders liquidating distributions in the
amount of the liquidation preference per share, plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any
accumulation in respect of unpaid dividends for prior dividend periods if
such shares of Preferred Stock do not have cumulative dividends). After
payment of the full amount of the liquidating distributions to which they
are entitled, the holders of shares of Preferred Stock will have no right
or claim to any of the remaining assets of Home Properties. In the event
that, upon any such voluntary or involuntary liquidation, dissolution or
winding up, the available assets of Home Properties are insufficient to pay
the amount of the liquidating distributions on all outstanding shares of
Preferred Stock and the corresponding amounts payable on all shares of
other classes or series of capital stock of Home Properties ranking on a
parity with such shares of Preferred Stock in the distribution of assets,
then the holders of such shares of Preferred Stock and all other such
classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions
to which they would otherwise be respectively entitled.

Series A Convertible Preferred Stock

     We have filed Articles Supplementary to our charter creating a series
of preferred stock designated as "Series A Convertible Preferred Stock"
which has substantially the same rights, privileges and preferences as the
Class A limited partnership interest in the Operating Partnership formerly
held by the State of Michigan Retirement System. The State of Michigan
acquired the Class A limited partnership interest in December 1996 for
$35,000,000. At the request of Home Properties, the State of Michigan
Retirement System has exchanged its Class A Limited Partnership interest
for 1,666,667 shares of the Series A preferred stock as of December 22,
1999. The rights, privileges and preferences of the Series A Convertible
Preferred Stock are set forth in the Articles Supplementary to the charter
creating that class of preferred stock.

     The Series A preferred stock has a preference over the Series B
preferred stock, Series C preferred stock, the Series D preferred stock and
the Common Stock as to dividends, which are payable quarterly at a rate
equal to the greater of 9% per year or the rate declared and payable on
comparable number of shares of Common Stock through December 30, 2003 on a
cumulative basis. The Series A preferred stock also has a liquidation
preference equal to $35,000,000 in the aggregate for all outstanding shares
(or $21.00 per share).

     Pursuant to the terms of the agreement pursuant to which the State of
Michigan Retirement System invested, we agreed to elect a nominee of the
State of Michigan Retirement System to the Board of Directors of Home
Properties and to nominate such director for reelection annually. In
addition, the State of Michigan Retirement System has the right to elect up
to four directors to the Board of Directors in the event that the preferred
dividends are in arrears for six consecutive quarters.  Under the Articles
Supplementary and the agreement pursuant to which Michigan invested, Home
Properties has agreed not take certain actions without the consent of the
State of Michigan such as creating any stock senior or on a parity with the
Series A preferred stock, consolidating, merging or selling all or
substantially all of its assets to another entity except under
circumstances where the rights and preferences of the Series A preferred
stock are protected. amending its charter or by-laws in a manner adverse to
the holders of the Series A preferred stock and certain other matters
described in those documents (each of which is filed as an exhibit to one
of our filings with the Securities and Exchange Commission which is
incorporated herein by reference).

     The Series A preferred stock is convertible into Common Stock on a
one-for-one basis, subject to adjustment. Home Properties may call the
Series A preferred stock for redemption on or after December 30, 2006 but
the holders may elect to convert the shares into Common Stock prior to
redemption.

Series B Convertible Cumulative Preferred Stock

     On September 30, 1999, Home Properties issued 2,000,000 shares of its
newly authorized Series B Convertible Cumulative Preferred Stock, which we
refer to as the "Series B preferred stock." The Articles Supplementary to
the charter establishing the Series B preferred stock sets forth the
rights, privileges and preferences of that stock.  These Articles
Supplementary with respect to the Series B  preferred stock, are filed as
an exhibit to one of our filings with the Securities and Exchange
Commission, which is incorporated herein by reference.

     The Series B preferred stock is junior to the right of payment to the
Series A preferred  stock and is on parity in right of payment with the
Series C preferred stock and Series D preferred stock, is entitled to a
liquidation preference of $25.00 per share and dividends equal to the
greater of the dividends payable on the shares of Common Stock into which
the Series B Preferred Stock is convertible, or 8.36% of the liquidation
preference (or $2.09 per share) each year.

     The Series B preferred stock is redeemable at the option of Home
Properties after September 29, 2004 at the liquidation preference. Upon the
occurrence of certain events, the Series B preferred stock may be subject
to mandatory redemption at the option of the holders and, in certain
instances, at a premium over the liquidation preference. Those events
include: a change in control of Home Properties or the Operating
Partnership, a merger, consolidation or sale of all or substantially all of
the assets, incurrence of indebtedness in excess of 70% of total market
capitalization, a loss of REIT status and other events described in the
Articles Supplementary. The holders of the Series B preferred stock,
together with the holders of the Series C and Series D preferred stock,
also have the right to elect two directors to the Board of Directors of
Home Properties in the event that the preferred dividends are in arrears
for six quarters (whether consecutive or not).

     The Series B preferred stock is convertible into 1,679,543 shares of
Common Stock, subject to adjustment.

Series C Convertible Cumulative Preferred Stock

     The Articles Supplementary to the charter establishing the Series C
preferred stock sets forth the rights, privileges and preferences of that
stock.  A copy of the Articles Supplementary as well as the purchase
agreement relating to the other authorized shares of Series C preferred
stock are filed as an exhibit to one of the reports on Form 8-K which is
incorporated in this prospectus and contains the complete details of the
terms of the Series C preferred stock.  The Series C preferred stock is
junior to the right of payment to the Series A Convertible Preferred Stock
and is on a parity with the Series B preferred stock and the Series D
preferred stock described below.   These Articles Supplementary with
respect to the Series C  preferred stock, are filed as an exhibit to one of
our filings with the Securities and Exchange Commission, which is
incorporated herein by reference.

     The Series C preferred stock is entitled to a liquidation preference
equal to the greater of: (a)  $100 per share plus all accrued and unpaid
dividends to the date of liquidation, and (b) the amount the holder of the
Series C preferred stock would have received if the Series C preferred
stock were converted into common stock immediately prior to the
liquidation, dissolution or winding up.

     Dividends on the Series C preferred stock accrue quarterly and are
equal to the greater of the dividends payable on the shares of Common Stock
into which the Series C preferred stock is convertible, or 8.75% of the
liquidation preference (or $8.75 per share) each year.  Pursuant to
covenants in a purchase agreement with the institutional investors
purchasing the Series C preferred stock, if we fail to:   (i) limit our
ratio of total indebtedness to market capitalization to 70%; (ii) maintain
our ratio of earnings before interest, taxes, depreciation and amortization
(EBITDA) to fixed charges (consisting of total interest expense and
dividends on our preferred stock), to 1.75 to 1.0; or (iii) maintain a
rating on the Series C preferred stock; then the Series C preferred stock
will accrue dividends at a rate of 9.25% per year.  If we fail to pay the
full redemption price on redemption of the Series C preferred stock or the
full repurchase price on repurchase of the Series C preferred stock, both
in accordance with the purchase agreement, the Series C preferred stock
will accrue dividends at a rate of 11.25% per year.  If we fail to maintain
one of the covenants listed above and fail to make any payments described
in the preceding sentence, then the Series C preferred stock will accrue
dividends at a rate of 11.75% per year.  On the occurrence of certain
events resulting in a change of control of Home Properties, the Series C
preferred stock will accrue dividends at a rate fixed at 8% above the then
current five-year treasury note yield.

     The Series C preferred stock is redeemable at our option after the
fifth anniversary of its issuance at $100 per share, plus accrued
dividends.  We may also redeem the Series C preferred stock on or after the
first anniversary of its issuance in the event of change of control (as
defined in the Articles Supplementary) of Home Properties.  Upon the
occurrence of certain limited events, the Series C preferred stock may be
subject to mandatory repurchase at the option of the holders and, in
certain instances, at a premium over the $100 stated value per share.
Those events include: sale of all or substantially all of the assets,
incurrence of indebtedness in excess of 65% of total value (with real
estate assets valued at original, historical cost basis), a loss of REIT
status and other events described in the Articles Supplementary.  The
holders of the Series C preferred stock, together with the holders of other
classes of Preferred Stock, also have the right to elect two directors to
our Board of Directors  in the event that the preferred dividends are in
arrears for six quarters (whether consecutive or not).

     Each share of Series C preferred stock is convertible into 3.30579
shares of common stock (plus accrued and unpaid dividends), the equivalent
of a $30.25 per share conversion price, subject to adjustment.  The number
of shares of common stock issuable upon conversion and the price per share
are subject to adjustment in the event of dividends or other distributions
payable in capital stock or combinations of stock so that any holder of the
Series C preferred stock will be entitled to the same number of shares of
common stock such holder could have received if the holder had converted
immediately prior to the event.  The holders of the Series C preferred
stock may convert their shares into common stock at any time.


     If the holders of the Series C preferred stock intend to sell more
than 200,000 shares of Series C preferred stock to any person or group of
affiliated persons, such shares of Series C preferred stock must first be
offered to us.

Series D Convertible Cumulative Preferred Stock

     On June 5, 2000, Home Properties issued 250,000 shares of its Series D
Convertible Cumulative Preferred Stock, which we refer to as the "Series D
preferred stock."  The Articles Supplementary to the charter establishing
the Series D preferred stock were filed on June 2, 2000, authorize an
aggregate of 500,000 shares of Series D preferred stock, and set forth the
rights, privileges and preferences of that stock.  The Series D preferred
stock ranks junior to the Series A preferred stock, on a parity with the
Series B preferred stock and Series C preferred stock, and senior to the
common stock with respect to payment of dividends and rights upon the
liquidation, dissolution or winding up of Home Properties.   These Articles
Supplementary with respect to the Series D  preferred stock, are filed as
an exhibit to one of our filings with the Securities and Exchange
Commission, which is incorporated herein by reference.

     The Series D preferred stock is entitled to a liquidation preference
equal to $100 per share plus all accrued and unpaid dividends, whether or
not declared to the date of final distribution.

     Dividends on the Series D preferred stock accrue quarterly and are
equal to the greater of the dividends payable on the shares of Common Stock
into which the Series D preferred stock is convertible, or 8.775% of the
liquidation preference (or $8.775 per share) each year.  If, however, our
ratio of earnings before interest, taxes, depreciation and amortization
(EBITDA) to fixed charges (consisting of total interest expense and
dividends on our preferred stock) is less than 1.75 to 1.0, the dividend
rate payable on the Series D preferred stock will increase by .50% until
the last day of the calendar quarter during we comply again with the
covenant.  In addition, on the occurrence of certain events resulting in a
change of control of Home Properties, the Series D preferred stock will
accrue dividends at a rate fixed at 8% above the then current five-year
treasury note yield, but in no event  less than 8.775%

     The Series D preferred stock is redeemable at our option after the
fifth anniversary of its issuance at $100 per share, plus accrued
dividends.  In addition, we are required to redeem the Series D preferred
stock on the fiftieth anniversary of the issuance at a redemption price per
share payable at our option, either:  (i) in cash at $100 per share, plus
accrued dividends; or (ii) by issuance of shares of our common stock based
on the then current conversion price, which is described below.  We may
also redeem all of the Series D preferred stock in the event of a change of
control (as defined in the Articles Supplementary) of Home Properties at a
price per share equal to the liquidation preference ($100 per share) plus
accrued and unpaid dividends.  If, however, the redemption occurs before
the fifth anniversary of the issuance date (June 5, 2005), the redemption
price per share of Series D preferred Stock will be the amount of the
liquidation preference plus an amount necessary to provide the holders a
15% annual return on such amount from issuance to redemption.  Upon the
occurrence of certain limited events, the Series D preferred stock may be
subject to mandatory repurchase at the option of the holders at the
liquidation preference plus accrued and unpaid dividends.  If Home
Properties were to lose its REIT status prior to June 5, 2005, we must
redeem the Series D preferred stock at 105% of the $100 liquidation
preference plus accrued and unpaid dividends.  Those events include:  sale
of all or substantially all of the assets, incurrence of indebtedness in
excess of 65% of total value (with real estate assets valued at original,
historical cost basis), a loss of REIT status and other events described in
the Articles Supplementary.  The holders of the Series D preferred stock,
together with the holders of the Series B and Series C preferred stock,
also have the right to elect two directors to the Board of Directors of
Home Properties in the event that the preferred dividends are in arrears
for six quarters (whether consecutive or not).  We must redeem the Series D
preferred stock on the fiftieth (50{th}) anniversary of its issuance
either: (i) at a price per share equal to the liquidation preference ($100
per share) plus accrued and unpaid dividends, or (ii) for common stock
equal in value to the liquidation preference plus accrued and unpaid
dividends multiplied by the conversion price then in effect.

     Each share of Series D preferred stock is currently convertible into
3.33333 shares of common stock (plus accrued and unpaid dividends), the
equivalent of a $30 per share conversion price, subject to adjustment.  The
number of shares of common stock issuable upon conversion and the price per
share are subject to adjustment upon the occurrence of certain events.
Among other things, the conversion ratio will be adjusted if we sell common
stock or securities convertible into common stock for consideration less
than the $30 conversion price, or pay dividend on our common stock in the
aggregate in excess of our undistributed FFO at December 31, 1999 plus
cumulative FFO after that date, minus accrued and paid dividends on the
series D Preferred Stock.  In addition, certain common stock or other
issuances of our securities will result in an adjustment to the number of
shares of common stock issuable upon conversion of the Series D preferred
stock, including in the event of dividends or other distributions payable
in capital stock or combinations of stock so that any holder of the Series
D preferred stock will be entitled to the same number of shares of common
stock such holder could have received if the holder had converted
immediately prior to the event.  In the event of a merger, consolidation
exchange offer or tender offer, certain adjustments to the conversion price
will occur automatically. The holders of the Series D preferred stock may
convert their shares into common stock at any time.

Common Stock Purchase Warrants

     We have issued common stock purchase warrants to purchase up to
240,000 shares of common stock at a price $30.25 per share, subject to
adjustment. The warrants may be exercised from time to time for not less
than 10% of the shares of common stock issuable under the warrant at any
time prior to the fifth anniversary of the date of its issuance.  The
number of shares of common stock issuable upon exercise of any warrant and
the price per share are subject to adjustment in the event of dividends or
other distributions payable in capital stock or combinations of stock so
that the holder of the warrant will be entitled to the same number of
shares of common stock such holder could have received if the holder had
exercised the warrant immediately prior to the event.


                 RESTRICTIONS ON TRANSFER OWNERSHIP LIMITS

     Our charter contains certain restrictions on the number of shares of
capital stock that stockholders may own. For Home Properties to qualify as
a REIT under the Code, no more than 50% in value of its outstanding shares
of capital stock may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Internal Revenue Code , to include certain
entities) during the last half of a taxable year or during a proportionate
part of a shorter taxable year. The capital stock must also be beneficially
owned by 100 or more persons during at least 335 days of a taxable year or
during a proportionate part of a shorter taxable year. Because Home
Properties expects to continue to qualify as a REIT, its charter contains
restrictions on the ownership and transfer of shares of its capital stock
intended to ensure compliance with these requirements. Subject to certain
exceptions specified in the charter, no holder may own, or be deemed to own
by virtue of the attribution provisions of the Code, more than 8.0% (the
"Ownership Limit") of the value of the issued and outstanding shares of
capital stock of Home Properties. Certain entities, such as qualified
pension plans, are treated as if their beneficial owners were the holders
of the Common Stock held by such entities. Stockholders ("Existing
Holders") whose holdings exceeded the Ownership Limit immediately after
Home Properties' initial public offering of its Common Stock, assuming that
all Units of the Operating Partnership are counted as shares of Common
Stock, are permitted to continue to hold the number of shares they held on
such date and may acquire additional shares of capital stock upon (i) the
exchange of Units for Shares, (ii) the exercise of stock options or receipt
of grants of shares of capital stock pursuant to a stock benefit plan,
(iii) the acquisition of shares of capital stock pursuant to a dividend
reinvestment plan, (iv) the transfer of shares of capital stock from
another Existing Holder or the estate of an Existing Holder by devise, gift
or otherwise, or (v) the foreclosure on a pledge of shares of capital
stock; provided, no such acquisition may cause any Existing Holder to own,
directly or by attribution, more than 17.5% (the "Existing Holder Limit")
of the issued and outstanding Shares, subject to certain additional
restrictions.

     The Board of Directors of Home Properties may increase or decrease the
Ownership Limit and Existing Holder Limit from time to time, but may not do
so to the extent that after giving effect to such increase or decrease (i)
five beneficial owners of Shares could beneficially own in the aggregate
more than 49.5% of the aggregate value of the outstanding capital stock of
Home Properties or (ii) any beneficial owner of capital stock would violate
the Ownership Limit or Existing Holder Limit as a result of a decrease. The
Board of Directors may waive the Ownership Limit or the Existing Holder
Limit with respect to a holder if such holder provides evidence acceptable
to the Board of Directors that such holder's ownership will not jeopardize
Home Properties' status as a REIT.  Waivers of the Ownership Limit have
been granted to certain institutional investors in connection with the sale
of our Preferred Stock.

     Any transfer of outstanding capital stock of Home Properties
("Outstanding Stock") that would (i) cause any holder, directly or by
attribution, to own capital stock having a value in excess of the Ownership
Limit or Existing Holder Limit, (ii) result in shares of capital stock
other than Excess Stock, if any, to be owned by fewer than 100 persons,
(iii) result in Home Properties being closely held within the meaning of
section 856(h) of the Code, or (iv) otherwise prevent Home Properties from
satisfying any criteria necessary for it to qualify as a REIT, is null and
void, and the purported transferee acquires no rights to such Outstanding
Stock.

     Outstanding Stock owned by or attributable to a stockholder or shares
of Outstanding Stock purportedly transferred to a stockholder which cause
such stockholder or any other stockholder to own shares of capital stock in
excess of the Ownership Limit or Existing Holder Limit will automatically
convert into shares of Excess Stock. Such Excess Stock will be transferred
by operation of law to a separate trust, with Home Properties acting as
trustee, for the exclusive benefit of the person or persons to whom such
Outstanding Stock may be ultimately transferred without violating the
Ownership Limit or Existing Holder Limit. Excess Stock is not treasury
stock, but rather constitutes a separate class of issued and outstanding
stock of Home Properties. While the Excess Stock is held in trust, it will
not be entitled to vote, will not be considered for purposes of any
stockholder vote or the determination of a quorum for such vote and will
not be entitled to participate in dividends or other distributions. Any
record owner or purported transferee of Outstanding Stock which has
converted into Excess Stock (the "Excess Holder") who receives a dividend
or distribution prior to the discovery by Home Properties that such
Outstanding Stock has been converted into Excess Stock must repay such
dividend or distribution upon demand. While Excess Stock is held in trust,
Home Properties will have the right to purchase it from the trust for the
lesser of (i) the price paid for the Outstanding Stock which converted into
Excess Stock by the Excess Holder (or the market value of the Outstanding
Stock on the date of conversion if no consideration was given for the
Outstanding Stock)or (ii) the market price of shares of capital stock
equivalent to the Outstanding Stock which converted into Excess Stock (as
determined in the manner set forth in the Articles of Incorporation) on the
date Home Properties exercises its option to purchase. Home Properties must
exercise this right within the 90-day period beginning on the date on which
it receives written notice of the transfer or other event resulting in the
conversion of Outstanding Stock into Excess Stock. Upon the liquidation of
Home Properties, distributions will be made with respect to such Excess
Stock as if it consisted of the Outstanding Stock from which it was
converted.

     Any Excess Holder, with respect to each trust created upon the
conversion of Outstanding Stock into Excess Stock, may designate any
individual as a beneficiary of such trust; provided, such person would be
permitted to own the Outstanding Stock which converted into the Excess
Stock held by the trust under the Ownership Limit or Existing Holder Limit
and the consideration paid to such Excess Holder in exchange for
designating such person as the beneficiary is not in excess of the price
paid for the Outstanding Stock which converted into Excess Stock by the
Excess Holder (or the market value of the Outstanding Stock on the date of
conversion if no consideration was given for the Outstanding Stock). Home
Properties' redemption right must have expired or been waived prior to such
designation. Immediately upon the designation of a permitted beneficiary,
the Excess Stock, if any, will automatically convert into shares of the
Outstanding Stock from which it was converted and Home Properties as
trustee of the trust will transfer such shares, if any, and any proceeds
from redemption or liquidation to the beneficiary.

     If the restrictions on ownership and transfer, conversion provisions
or trust arrangements in Home Properties' Articles of Incorporation are
determined to be void or invalid by virtue of any legal decision, statute,
rule or regulation, then the Excess Holder of any Outstanding Stock that
would have converted into shares of Excess Stock if the conversion
provisions of the Articles of Incorporation were enforceable and valid
shall be deemed to have acted as an agent on behalf of Home Properties in
acquiring such Outstanding Stock and to hold such Outstanding Stock on
behalf of Home Properties unless Home Properties waives its right to this
remedy.

     The foregoing ownership and transfer limitations may have the effect
of precluding acquisition of control of Home Properties without the consent
of its Board of Directors. All certificates representing shares of capital
stock will bear a legend referring to the restrictions described above. The
foregoing restrictions on transferability and ownership will not apply if
the Board of Directors determines, and the stockholders concur, that it is
no longer in the best interests of Home Properties to attempt to qualify,
or to continue to qualify, as a REIT. Approval of the limited partners of
the Operating Partnership to terminate REIT status is also required.

                             OWNERSHIP REPORTS

     Every owner of more than 5% of the issued and outstanding shares of
capital stock of Home Properties must file a written notice with Home
Properties containing the information specified in the Articles of
Incorporation no later than January 31 of each year. In addition, each
stockholder shall, upon demand, be required to disclose to Home Properties
in writing such information as Home Properties may request in order to
determine the effect of such stockholder's direct, indirect and attributed
ownership of shares of capital stock on Home Properties' status as a REIT
or to comply with any requirements of any taxing authority or other
governmental agency.

CERTAIN OTHER PROVISIONS OF MARYLAND LAW AND CHARTER DOCUMENTS

     The following discussion summarizes certain provisions of MGCL and
Home Properties' Articles of Incorporation and Bylaws. This summary does
not purport to be complete and is subject to and qualified in its entirety
by reference to the Articles of Incorporation and Bylaws, copies of which
are filed as exhibits to the Registration Statement of which this
prospectus constitutes a part. See "Additional Information. - Limitation of
Liability and Indemnification." The Articles of Incorporation and Bylaws
limit the liability of directors and officers to Home Properties and its
stockholders to the fullest extent permitted from time to time by the MGCL
and require Home Properties to indemnify its directors, officers and
certain other parties to the fullest extent permitted from time to time by
the MGCL.

     BUSINESS COMBINATIONS. Under the MGCL, certain "business combinations"
(including a merger, consolidation, share exchange or, in certain
circumstances, an asset transfer or issuance or reclassification of equity
securities) between a Maryland corporation and any person who beneficially
owns 10% or more of the voting power of the outstanding voting stock of the
corporation or an affiliate or associate of the corporation who, at any
time within the two-year period immediately prior to the date in question,
was the beneficial owner, directly or indirectly, of 10% or more of the
voting power of the then-outstanding voting stock of the corporation (an
"Interested Stockholder") or an affiliate thereof, are prohibited for five
years after the most recent date on which the Interested Stockholder became
an Interested Stockholder. Thereafter, in addition to any other required
vote, any such business combination must be recommended by the board of
directors of such corporation and approved by the affirmative vote of at
least (i) 80% of the votes entitled to be cast by holders of outstanding
shares of voting stock of the corporation, voting together as a single
voting group, and (ii) two-thirds of the votes entitled to be cast by
holders of voting stock of the corporation (other than voting stock held by
the Interested Stockholder who will, or whose affiliate will, be a party to
the business combination or by an affiliate or associate of the Interested
Stockholder) voting together as a single voting group. The extraordinary
voting provisions do not apply if, among other things, the corporation's
stockholders receive a price for their shares determined in accordance with
the MGCL and the consideration is received in cash or in the same form as
previously paid by the Interested Stockholder for its shares. These
provisions of the MGCL do not apply, however, to business combinations that
are approved or exempted by the board of directors of the corporation prior
to the time that the Interested Stockholder becomes an Interested
Stockholder. The Articles of Incorporation of Home Properties contain a
provision exempting from these provisions of the MGCL any business
combination involving the Leenhoutses (or their affiliates) or any other
person acting in concert or as a group with any of the foregoing persons.
In addition, certain holders of our preferred stock have been granted
consent to their acquisition of additional stock without triggering the
protective provisions of the MGCL.

     CONTROL SHARE ACQUISITIONS. The MGCL provides that "control shares" of
a Maryland corporation acquired in a "control share acquisition" have no
voting rights except to the extent approved by the affirmative vote of two-
thirds of the votes entitled to be cast on the matter other than
"interested shares" (shares of stock in respect of which any of the
following persons is entitled to exercise or direct the exercise of the
voting power of shares of stock of the corporation in the election of
directors: an "acquiring person," an officer of the corporation or an
employee of the corporation who is also a director). "Control shares" are
shares of stock which, if aggregated with all other such shares of stock
owned by the acquiring person, or in respect of which such person is
entitled to exercise or direct the exercise of voting power of shares of
stock of the corporation in electing directors within one of the following
ranges of voting power: (i) one-fifth or more but less than one-third, (ii)
one-third or more but less than a majority, or (iii) a majority of more of
all voting power. Control shares do not include shares the acquiring person
is entitled to vote as a result of having previously obtained stockholder
approval. The control share acquisition statute does not apply to shares
acquired in a merger, consolidation or share exchange if the corporation is
a party to the transaction, or to acquisitions approved or exempted by the
charter or bylaws of the corporation. A person who has made or proposes to
make a control share acquisition, under certain conditions (including an
undertaking to pay expenses), may compel the board of directors to call a
special meeting of stockholders to be held within 50 days of demand to
consider the voting rights of the control shares upon delivery of an
acquiring person statement containing certain information required by the
MGCL, including a representation that the acquiring person has the
financial capacity to make the proposed control share acquisition, and a
written undertaking to pay the corporation's expenses of the special
meeting (other than the expenses of those opposing approval of the voting
rights). If no request for a meeting is made, the corporation may itself
present the question at any stockholders meeting. If voting rights are not
approved at the meeting or if the acquiring person does not deliver an
acquiring person statement as required by the MGCL, then, subject to
certain conditions and limitations, the corporation may redeem any or all
of the control shares (except those for which voting rights have previously
been approved) for fair value, determined without regard to the absence of
voting rights for control shares, as of the date of the last control share
acquisition or, if a stockholder meeting is held, as of the date of the
meeting of stockholders at which the voting rights of such shares are
considered and not approved. If voting rights for control shares are
approved at a stockholders' meeting before the control share acquisition
and the acquiring person becomes entitled to exercise or direct the
exercise of a majority or more of all voting power, all other stockholders
may exercise rights of objecting stockholders under Maryland law to receive
the fair value of their shares. The fair value of the shares for such
purposes may not be less than the highest price per share paid by the
acquiring person in the control share acquisition. Certain limitations and
restrictions otherwise applicable to the exercise of objecting
stockholders' rights do not apply in the context of a control share
acquisition. The Articles of Incorporation contain a provision exempting
from the control share acquisition statute any and all acquisitions to the
extent that such acquisitions would not violate the Ownership Limit or
Existing Owner Limit. There can be no assurance that such provision will
not be amended or eliminated at any point in the future.


                     FEDERAL INCOME TAX CONSIDERATIONS

The following summary of material federal income tax consequences regarding
Home Properties and the common stock we are registering is based on current
law, is for general information only and is not tax advice. The information
in this section is based on the Internal Revenue Code as currently in
effect, current, temporary and proposed Treasury Regulations promulgated
under the Internal Revenue Code, the legislative history of the Internal
Revenue Code, current administrative interpretations and practices of the
IRS, including its  practices and policies as expressed in private letter
rulings which are not binding on the IRS except with respect to the
particular taxpayers who requested and received such rulings, and court
decisions, all as of the date of this prospectus. There is no assurance
that future legislation, Treasury Regulations, administrative
interpretations and practices or court decisions will not adversely affect
existing interpretations. Any change could apply retroactively to
transactions preceding the date of the change.

     We have not requested, and do not plan to request, any rulings from
the IRS concerning our tax treatment and the statements in this prospectus
are not binding on the IRS or a court. Thus, we can provide no assurance
that these statements will not be challenged by the IRS or sustained by a
court if challenged by the IRS. The tax treatment to holders of common
stock will vary depending on a holder's particular situation and this
discussion does not purport to deal with all aspects of taxation that may
be relevant to a holder of common stock in light of his or her personal
investments or tax circumstances, or to stockholders subject to special
treatment under the federal income tax laws except to the extent discussed
under the headings "Taxation of Tax-Exempt Stockholders" and "Taxation of
Non-U.S. Stockholders." Stockholders subject to special treatment include,
without limitation, insurance companies, financial institutions or broker-
dealers, tax-exempt organizations, stockholders holding securities as part
of a conversion transaction or hedge or hedging transaction or as a
position in a straddle for tax purposes, foreign corporations and persons
who are not citizens or residents of the United States.

     In addition, the summary below does not consider the effect of any
foreign, state, local or other tax laws that may be applicable to holders
of the common stock. If we meet the detailed requirements in the Internal
Revenue Code for qualification as a REIT, which are summarized below, we
will be treated as a REIT for federal income tax purposes. In this case, we
generally will not be subject to federal corporate income taxes on our net
income that is currently distributed to our stockholders. This treatment
substantially eliminates the "double taxation" that generally results from
investments in a corporation. Double taxation refers to the imposition of
corporate level tax on income earned by a corporation and taxation at the
shareholder level on funds distributed to a corporation's shareholders. If
we fail to qualify as a REIT in any taxable year, we would not be allowed a
deduction for dividends paid to our stockholders in computing taxable
income and would be subject to federal income tax at regular corporate
rates. Unless entitled to relief under specific statutory provisions, we
would be ineligible to be taxed as a REIT for the four succeeding tax
years. As a result, the funds available for distribution to our
stockholders would be reduced. Each prospective purchaser should consult
his or her own tax advisor regarding the specific tax consequences of the
purchase, ownership and sale of common stock, including the federal, state,
local, foreign and other tax consequences of such purchase, ownership and
sale and of potential changes in applicable tax laws.

                        TAXATION OF HOME PROPERTIES

     GENERAL. We elected to be taxed as a REIT under Sections 856 through
860 of the Internal Revenue Code, commencing with our taxable year ended
December 31, 1994. We believe we have been organized and have operated in a
manner which qualifies for taxation as a REIT under the Internal Revenue
Code commencing with our taxable year ended December 31, 1994. We intend to
continue to operate in this manner. However, our qualification and taxation
as a REIT depends upon our ability to meet, through actual annual operating
results, asset diversification, distribution levels and diversity of stock
ownership, the various qualification tests imposed under the Internal
Revenue Code. Accordingly, there is no assurance that we have operated or
will continue to operate in a manner so as to qualify or remain qualified
as a REIT. Further, legislative, administrative or judicial action may
change, perhaps retroactively, the anticipated income tax treatment
described in this prospectus. See "Failure to Qualify."

     Home Properties was organized in conformity with the requirements for
qualification as a REIT, and its method of operation has enabled it to meet
the requirements for qualification and taxation as a REIT under the Code.
This opinion is based on certain assumptions and is conditioned upon
certain representations made by Home Properties as to certain factual
matters relating to Home Properties' organization, manner of operation,
income and assets. Nixon Peabody LLP is not aware of any facts or
circumstances that are inconsistent with these assumptions and
representations. Home Properties' qualification and taxation as a REIT will
depend upon Home Properties' satisfaction of the requirements necessary to
be classified as a REIT, discussed below, on a continuing basis. Nixon
Peabody LLP will not review compliance with these tests on a continuing
basis. Therefore, no assurance can be given that Home Properties will
satisfy such tests on a continuing basis.

     The sections of the Internal Revenue Code that relate to the
qualification and operation as a REIT are highly technical and complex. The
following sets forth the material aspects of the sections of the Internal
Revenue Code that govern the federal income tax treatment of a REIT and its
stockholders. This summary is qualified in its entirety by the applicable
Internal Revenue Code provisions, relevant rules and regulations
promulgated under the Internal Revenue Code, and administrative and
judicial interpretations of the Internal Revenue Code, and these rules and
these regulations.

     If we qualify for taxation as a REIT, we generally will not be subject
to federal corporate income taxes on our net income that is currently
distributed to our stockholders. This treatment substantially eliminates
the "double taxation" that generally results from investment in a
corporation. However, Home Properties will be subject to federal income tax
as follows:

     First, we will be taxed at regular corporate rates on any
undistributed REIT taxable income, including undistributed net capital
gains; provided, however, that properly designated undistributed capital
gains will effectively avoid taxation at the stockholder level. A REIT's
"REIT taxable income" is the otherwise taxable income of the REIT subject
to certain adjustments, including a deduction for dividends paid.

     Second, we may be subject to the "alternative minimum tax" on our
items of tax preference under some circumstances.

     Third, if we have (a) net income from the sale or other disposition of
"foreclosure property" which is held primarily for sale to customers in the
ordinary course of business or (b) other nonqualifying income from
foreclosure property, we will be subject to tax at the highest corporate
rate on this income. Foreclosure property is defined generally as property
we acquired through foreclosure or after a default on a loan secured by the
property or a lease of the property.

     Fourth, we will be subject to a 100% tax on any net income from
prohibited transactions. Prohibited transactions generally include sales or
other dispositions of property held primarily for sale to customers in the
ordinary course of business, other than the sale or disposition of
foreclosure property.

     Fifth, we will be subject to a 100% tax on an amount equal to (a) the
gross income attributable to the greater of the amount by which we fail the
75% or 95% test multiplied by (b) a fraction intended to reflect our
profitability, if we fail to satisfy the 75% gross income test or the 95%
gross income test but have maintained our qualification as a REIT because
we satisfied other requirements. The gross income tests are discussed
below.

     Sixth, we would be subject to a 4% excise tax on the excess of the
required distribution over the amounts actually distributed if we fail to
distribute during each calendar year at least the sum of: 85% of our REIT
ordinary income for the year, 95% of our REIT capital gain net income for
the year, and any undistributed taxable income from prior periods.

     Seventh, if we acquire any asset from a corporation which is or has
been a C corporation in a transaction in which the basis of the acquired
asset in our hands is determined by reference to the basis of the asset in
the hands of the C corporation, and we subsequently recognize gain on the
disposition of the asset during the ten-year period beginning on the date
on which we acquired the asset, then we will be subject to tax at the
highest regular corporate tax rate on this gain to the extent of the
"built-in-gain" of the asset. The built-in- gain of an asset equals the
excess of (a) the fair market value of the asset over (b) our adjusted
basis in the asset, determined as of the date we acquired the asset from
the C corporation. A C corporation is generally a corporation subject to
full corporate-level tax. The results described in this paragraph with
respect to the recognition of built-in gain assume that we will make an
election pursuant to IRS Notice 88-19.

     REQUIREMENTS FOR QUALIFICATION AS A REIT. The Internal Revenue Code
defines a REIT as a corporation, trust or association that:

     (1) is managed by one or more trustees or directors;

     (2) uses transferable shares or transferable certificates to evidence
beneficial ownership;

     (3) would be taxable as a domestic corporation, but for Sections 856
through 860 of the Internal Revenue Code;

     (4) is not a financial institution referred to in Section 582(c) of
the Internal Revenue Code or an insurance company to which subchapter L of
the Internal Revenue Code applies;

     (5) is beneficially owned by 100 or more persons;

     (6) during the last half of each taxable year not more than 50% in
value of its outstanding stock is owned, actually or constructively, by
five or fewer individuals, as defined in the Internal Revenue Code to
include the entities set forth in Section 542(a)(2) of the InternalRevenue
Code; and

     (7) meets other tests, described below, regarding the nature of its
income and assets and the amount of its distributions.

     The Internal Revenue Code provides that conditions (1) to (4),
inclusive, must be met during the entire taxable year and that condition
(5) must be met during at least 335 days of a taxable year of twelve
months, or during a proportionate part of a taxable year of less than
twelve months. Conditions (5) and (6) do not apply until after the first
taxable year for which an election made to be taxed as a REIT. For purposes
of condition (6), pension funds and some other tax-exempt entities are
treated as individuals, subject to a "look-through" exception in the case
of pension funds. We have satisfied condition (5) and believe that we have
issued sufficient shares to satisfy condition (6). In addition, our
articles of incorporation provides for restrictions regarding ownership and
transfer of shares. These restrictions are intended to assist us in
continuing to satisfy the share ownership requirements described in (5) and
(6) above. These ownership and transfer restrictions are described in the
accompanying prospectus in "Description of Capital Stock- Restrictions on
Transfer." Primarily, though not exclusively, as a result of fluctuations
in value among the different classes of our stock, these restrictions may
not ensure that we will, in all cases, be able to satisfy the share
ownership requirements described in conditions (5) and (6) above. If we
fail to satisfy these share ownership requirements, our status as a REIT
will terminate. However, if we comply with the rules contained in
applicable Treasury Regulations that require us to ascertain the actual
ownership of our shares and we do not know, or would not have known through
the exercise of reasonable diligence, that we failed to meet the
requirement described in condition (6) above, we will be treated as having
met this requirement. See "Failure to Qualify."

     In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. We have and will continue to have a
calendar taxable year.

     OWNERSHIP OF SUBSIDIARIES. Internal Revenue Code Section 856(i)
provides that a corporation which is a "qualified REIT subsidiary" shall
not be treated as a separate corporation, and all assets, liabilities, and
items of income, deduction and credit of a "qualified REIT subsidiary"
shall be treated as assets, liabilities and items of income of the REIT for
all purposes of the Internal Revenue Code, including the REIT qualification
tests. A "qualified REIT subsidiary" is defined for taxable years beginning
on or before August 5, 1997, as any corporation if 100 percent of the stock
of the corporation is held by the REIT at all times during the period the
corporation was in existence.

     A "qualified REIT subsidiary" is defined for taxable years beginning
after August 5, 1997, as any corporation 100 percent of the stock of which
is owned by the REIT, without regard to prior ownership, and that is not a
taxable REIT subsidiary. Each of our subsidiaries qualifies as a "qualified
REIT subsidiary." Thus, in applying the requirements described herein, our
subsidiaries are ignored, and all of our subsidiaries, assets, liabilities
and items of income, deduction and credit are treated as our assets,
liabilities and items of income, deduction, and credit for all purposes of
the Internal Revenue Code, including the REIT qualification tests. For this
reason, references under "Federal Income Tax Consequences" to our income
and assets include the income and assets of the our subsidiaries. Because
our subsidiaries are treated as "qualified REIT subsidiaries" they will not
be subject to federal income tax.

     In addition, our ownership of the voting securities of the
subsidiaries will not violate the restrictions against ownership of
securities of any one issuer which constitutes more than 10% of such
issuer's voting securities or more than 5% in value of our assets,
described below under "Asset Tests."

     OWNERSHIP OF A PARTNERSHIP INTEREST. In the case of a REIT which is a
partner in a partnership, IRS regulations provide that the REIT will be
deemed to own its proportionate share of the assets of the partnership.
Also, a partner in a partnership will be deemed to be entitled to the
income of the partnership attributable to its proportionate share. The
character of the assets and gross income of the partnership retains the
same character in the hands of Home Properties for purposes of Section 856
of the Internal Revenue Code, including satisfying the gross income tests
and the asset tests. Thus, our proportionate share of the assets,
liabilities and items of income of the Operating Partnership, including the
Operating Partnership's share of these items for any partnership or limited
liability company, are treated as our assets, liabilities and items of
income for purposes of applying the requirements described in this
prospectus.

     We have included a summary of the rules governing the Federal income
taxation of partnerships and their partners below in "Tax Aspects of the
Operating Partnership." We have direct control of the Operating Partnership
and will continue to operate it consistent with the requirements for
qualification as a REIT.

     INCOME TESTS. We must satisfy two gross income requirements annually
to maintain our qualification as a REIT. First, each taxable year we must
derive directly or indirectly at least 75% of our gross income from
investments relating to real property or mortgages on real property,
including "rents from real property" and, in specific circumstances,
interest, or from particular types of temporary investments. Gross income
from prohibited transactions is excluded for purposes of determining if we
satisfy this test. Second, each taxable year we must derive at least 95% of
our gross income from these real property investments, dividends, interest
and gain from the sale or disposition of stock or securities, or from any
combination of the foregoing. Gross income from prohibited transactions is
excluded for purposes of determining if we satisfy this test.

     The term "interest" generally does not include any amount received or
accrued, directly or indirectly, if the determination of the amount depends
in whole or in part on the income or profits of any person. However, an
amount received or accrued generally will not be excluded from the term
"interest" solely by reason of being based on a fixed percentage or
percentages of receipts or sales. Rents we receive will qualify as "rents
from real property" in satisfying the gross income requirements for a REIT
described above only if several conditions are met.

     First, the amount of rent must not be based in whole or in part on the
income or profits of any person. However, an amount received or accrued
generally will not be excluded from the term "rents from real property"
solely by reason of being based on a fixed percentage or percentages of
receipts or sales.

     Second, the Internal Revenue Code provides that rents received from a
"related party tenant" will not qualify as "rents from real property" in
satisfying the gross income tests. A related party tenant is a tenant of
Home Properties that Home Properties, or one or more actual or constructive
owners of 10% or more of Home Properties, actually or constructively own in
the aggregate 10% or more of such tenant. As a result of the passage of the
Ticket to Work and Work Incentives Act of 1999 as enacted on December 17,
1999 (we refer to this as the "REIT Modernization Act"), for taxable years
after December 31, 2000, Home Properties will be able to lease its
properties to a taxable REIT subsidiary and the rents received from that
subsidiary will not be disqualified from being "rents from real property"
by reason of Home Properties' ownership interest in the subsidiary so long
as the property is operated on behalf of the taxable REIT subsidiary by an
"eligible independent contractor." A taxable REIT subsidiary is a
corporation other than a REIT in which a REIT directly or indirectly holds
stock and that has made a joint election with the REIT to be treated as a
taxable REIT subsidiary. A taxable REIT subsidiary will be subject to
federal income tax.

     Third, if rent attributable to personal property, leased in connection
with a lease of real property, is greater than 15% of the total rent
received under the lease, then the portion of rent attributable to personal
property will not qualify as "rents from real property." Under currently
effective law, this 15% test is based on relative adjusted tax bases. As a
result of the passage of the REIT Modernization Act, however, for taxable
years beginning after December 31, 2000, the test will be based on relative
fair market values.

     Finally, for rents received to qualify as "rents from real property,"
Home Properties generally must not operate or manage the property or
furnish or render "impermissible services" to the tenants of the property,
other than through an independent contractor from whom Home Properties
derives no revenue. Home Properties may, however, directly perform services
that are "usually or customarily rendered" in connection with the rental of
space for occupancy only and are not otherwise considered "rendered to the
occupant" of the property. For Home Properties' taxable years beginning
after December 31, 2000, impermissible services can be provided to tenants
at a property by a taxable REIT subsidiary.

     It is expected that Home Properties' real estate investments will
continue to give rise to income that will enable it to satisfy all of the
income tests described above. Substantially all of Home Properties' income
will be derived from its interest in the Operating Partnership, which will,
for the most part, qualify as "rents from real property" for purposes of
the 75% and the 95% gross income tests. We generally do not and do not
intend to:

      - charge rent for any property that is based in whole or in part on
the income or profits of any person, except by reason of being based on a
percentage of receipts or sales, as described above;

     - rent any property to a related party tenant (except for leases to a
taxable REIT subsidiary after December 31, 2000);

     - derive rental income attributable to personal property, other than
personal property leased in connection with the lease of real property,
the amount of which is less than 15% of the total rent received under
the lease; or

     - perform services considered to be rendered to the occupant of the
property, other than through an independent contractor from whom we derive
no revenue.

Notwithstanding the foregoing, we may have taken and may continue to take
the actions set forth above to the extent these actions will not, based on
the advice of our tax counsel, jeopardize our status as a REIT.

     The Operating Partnership owns all of the non-voting common stock of
the Management Companies, corporations that are taxable as regular
corporations. The Management Companies will perform management,
development, construction and leasing services for certain properties which
Home Properties owns, holds general partnership interests in or manages.
The income earned by and taxed to the Management Companies would be
nonqualifying income if earned by Home Properties through the Operating
Partnership. As a result of the corporate structure, the income will be
earned by and taxed to the Management Companies and will be received by the
Operating Partnership only indirectly as dividends that qualify under the
95% test, but not the 75% gross income test. We believe that the aggregate
amount of any non-qualifying income in any taxable year has not exceeded
and will not exceed the limit on non- qualifying income under the gross
income tests.

     If we fail to satisfy one or both of the 75% or 95% gross income tests
for any taxable year, we may nevertheless qualify as a REIT for the year if
we are entitled to relief under specific provisions of the Internal Revenue
Code. Generally, we may avail ourselves of the relief provisions if:

     - our failure to meet these tests was due to reasonable cause and not
due to willful neglect;

     - we attach a schedule of the sources of our income to our federal
income tax return; and

     - any incorrect information on the schedule was not due to fraud with
intent to evade tax.

It is not possible, however, to state whether in all circumstances we would
be entitled to the benefit of these relief provisions. For example, if we
fail to satisfy the gross income tests because nonqualifying income that we
intentionally incur exceeds the limits on nonqualifying income, the IRS
could conclude that our failure to satisfy the tests was not due to
reasonable cause.

     If these relief provisions do not apply to a particular set of
circumstances, we will not qualify as a REIT. As discussed above in
"Taxation of Home Properties -General," even if these relief provisions
apply, and we retain our status as a REIT, a tax would be imposed with
respect to our excess net income. We may not always be able to maintain
compliance with the gross income tests for REIT qualification despite our
periodic monitoring of our income.

     PROHIBITED TRANSACTION INCOME. Any gain realized by us on the sale of
any property held as inventory or other property held primarily for sale to
customers in the ordinary course of business, including our share of any
such gain realized by the Operating Partnership, will be treated as income
from a prohibited transaction that is subject to a 100% penalty tax. This
prohibited transaction income may also adversely effect our ability to
satisfy the income tests for qualification as a REIT. Under existing law,
whether property is held as inventory or primarily for sale to customers in
the ordinary course of a trade or business is a question of fact that
depends on all the facts and circumstances surrounding the particular
transaction.

     The Operating Partnership intends to hold the properties for
investment with a view to long- term appreciation, to engage in the
business of acquiring, developing, owning, and operating its properties and
to make occasional sales of the properties as are consistent with the
Operating Partnership's investment objectives. However, the IRS may contend
that one or more of these sales is subject to the 100% penalty tax.

     ASSET TESTS. At the close of each quarter of our taxable year, we also
must satisfy three tests relating to the nature and diversification of our
assets.

     First, at least 75% of the value of our total assets must be
represented by real estate assets, cash, cash items and government
securities. For purposes of this test, real estate assets include stock or
debt instruments held for one year or less that are purchased with the
proceeds of a stock offering or a long-term (at least five years) debt
offering.

     Second, not more than 25% of our total assets may be represented by
securities, other than those securities includable in the 75% asset test.

     Third, of the investments included in the 25% asset class, the value
of any one issuer's securities may not exceed 5% of the value of our total
assets and we may not own more than 10% of any one issuer's outstanding
voting securities.

     The Operating Partnership owns 100% of the nonvoting preferred stock
of the Management Companies. The Operating Partnership does not and will
not own any of the voting securities of the Management Companies. Therefore
we will not be considered to own more than 10% of the voting securities of
the Management Companies. In addition, we believe that the value of our pro
rata share of the securities of the Management Companies held by the
Operating Partnership did not exceed at any time up to and including the
date of this prospectus 5% of the total value of our assets and will not
exceed this amount in the future. No independent appraisals have been
obtained. Counsel, in rendering its opinion as to the qualification of Home
Properties as a REIT, is relying on the conclusions of management regarding
the value of such securities of the Management Companies.

     As previously discussed, Home Properties is deemed to own its
proportionate share of the assets of a partnership in which it is a partner
so that the partnership interest, itself, is not a security for purposes of
this asset test. After initially meeting the asset tests at the close of
any quarter, we will not lose our status as a REIT for failure to satisfy
the asset tests at the end of a later quarter solely by reason of changes
in asset values. If we fail to satisfy the asset tests because we acquire
additional securities of the Management Companies or other securities or
other property during a quarter, including an increase in our interests in
the Operating Partnership, we can cure this failure by disposing of
sufficient nonqualifying assets within 30 days after the close of that
quarter. We have maintained and will continue to maintain adequate records
of the value of our assets to ensure compliance with the asset tests and to
take such other actions within the 30 days after the close of any quarter
as may be required to cure any noncompliance. If we fail to cure
noncompliance with the asset tests within this time period, we would cease
to qualify as a REIT.

     As a result of the REIT Modernization Act, for taxable years beginning
after December 31, 2000, the 5% value test and the 10% voting security test
will be modified in two respects. First, the 10% voting security test will
be expanded so that Home Properties also will be prohibited from owning
more than 10% of the value of the outstanding securities of any one issuer.
Second, an exception to these tests will be created so that Home Properties
will be permitted to own securities of a subsidiary that exceed the 5%
value test and the new 10% vote or value test if the subsidiary elects to
be a taxable REIT subsidiary. The Operating Partnership currently owns more
than 10% of the total value of the outstanding securities of each of the
non-controlled subsidiaries. The expanded 10% vote or value test, however,
will not apply to a subsidiary unless either of the following occurs:

     - the subsidiary engages in a substantial new line of business or
acquires any substantial asset after August 12, 1999; or

     - Home Properties has acquired, or acquires, additional securities of
the subsidiary after August 12, 1999.

     At the present time, a final decision has not been made regarding
which non-controlled subsidiaries, if any, will elect to be treated as
taxable REIT subsidiaries. For taxable years beginning after December 31,
2000, not more than 20% of the value of our total assets will be permitted
to be represented by securities of taxable REIT subsidiaries.

     It should be noted that the REIT Modernization Act contains two
provisions that will ensure that taxable REIT subsidiaries will be subject
to an appropriate level of federal income taxation. First, taxable REIT
subsidiaries will be limited in their ability to deduct interest payments
made to an affiliated REIT. Second, if a taxable REIT subsidiary pays an
amount to a REIT that exceeds the amount that would be paid to an unrelated
party in an arm's length transaction, the REIT generally will be subject to
an excise tax equal to 100% of such excess.

     Annual Distribution Requirements. To maintain our qualification as a
REIT, we are required to distribute dividends, other than capital gain
dividends, to our stockholders in an amount at least equal to: the sum of:

     - 95% (90% for taxable years beginning after December 31, 2000) of our
"REIT taxable income," computed without regard to the dividends paid
deduction and our net capital gain, and

     - 95% (90% for taxable years beginning after December 31, 2000) of the
after tax net income, if any, from foreclosure property, minus:

     - the excess of the sum of particular items of noncash income over 5%
of "REIT taxable income" as described above.

These distributions must be paid in the taxable year to which they relate,
or in the following taxable year if they are declared before we timely file
our tax return for such year and if paid on or before the first regular
dividend payment after such declaration. These distributions are taxable to
holders of common stock and convertible preferred stock, other than tax-
exempt entities, as discussed below, in the year in which paid. This is so
even though these distributions relate to the prior year for purposes of
our 95% (90% for taxable years beginning after December 31, 2000)
distribution requirement. The amount distributed must not be preferential
(e.g., every shareholder of the class of stock to which a distribution is
made must be treated the same as every other shareholder of that class, and
no class of stock may be treated otherwise than in accordance with its
dividend rights as a class).

     To the extent that we do not distribute all of our net capital gain or
distribute at least 95% (90% for taxable years beginning after December 31,
2000), but less than 100%, of our "REIT taxable income," as adjusted, we
will be subject to tax thereon at regular ordinary and capital gain
corporate tax rates. We have made and intend to make timely distributions
sufficient to satisfy these annual distribution requirements. We expect
that our REIT taxable income will be less than our cash flow due to the
allowance of depreciation and other non-cash charges in computing REIT
taxable income. Accordingly, we anticipate that we will generally have
sufficient cash or liquid assets to enable us to satisfy the distribution
requirements described above. In this regard, the Partnership Agreement of
the Operating Partnership authorizes Home Properties, as general partner,
to take such steps as may be necessary to cause the Operating Partnership
to distribute to its partners an amount sufficient to permit Home
Properties to meet these distribution requirements. However, from time to
time, we may not have sufficient cash or other liquid assets to meet these
distribution requirements due to timing differences between the actual
receipt of income and actual payment of deductible expenses, and the
inclusion of income and deduction of expenses in arriving at our taxable
income. If these timing differences occur, in order to meet the
distribution requirements, we may need to arrange for short-term, or
possibly long-term, borrowings or need to pay dividends in the form of
taxable stock dividends. Under specific circumstances identified in the
Internal Revenue Code, we may be able to rectify a failure to meet the
distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year, which may be included in our deduction for
dividends paid for the earlier year. Thus, we may be able to avoid being
taxed on amounts distributed as deficiency dividends. However, we will be
required to pay interest based upon the amount of any deduction taken for
deficiency dividends.

     Furthermore, we would be subject to a 4% excise tax on the excess of
the required distribution over the amounts actually distributed if we
should fail to distribute during each calendar year, or in the case of
distributions with declaration and record dates falling in the last three
months of the calendar year, by the end of January immediately following
such year, at least the sum of:

     - 85% of our REIT ordinary income for such year,

     - 95% of our REIT capital gain income for the year,

     - and any undistributed taxable income from prior periods.

Any REIT taxable income and net capital gain on which this excise tax is
imposed for any year is treated as an amount distributed during that year
for purposes of calculating such tax.

                            FAILURE TO QUALIFY

     If we fail to qualify for taxation as a REIT in any taxable year, and
the relief provisions do not apply, we will be subject to tax, including
any applicable alternative minimum tax, on our taxable income at regular
corporate rates. Distributions to stockholders in any year in which we fail
to qualify will not be deductible by us and we will not be required to
distribute any amounts to our stockholders. As a result, our failure to
qualify as a REIT would reduce the cash available for distribution by us to
our stockholders.

     In addition, if we fail to qualify as a REIT, all distributions to
stockholders will be taxable as ordinary income to the extent of our
current and accumulated earnings and profits, and subject to limitations
identified in the Internal Revenue Code, corporate distributees may be
eligible for the dividends received deduction. Unless entitled to relief
under specific statutory provisions, we will also be ineligible to be taxed
as a REIT for the four tax years following the year during which we lost
our qualification. It is not possible to state whether in all circumstances
we would be entitled to this statutory relief.

                   TAXATION OF TAXABLE U.S. STOCKHOLDERS

     As used below, the term "U.S. stockholder" means a holder of shares of
common stock who, for United States federal income tax purposes: is a
citizen or resident of the United States; is a corporation, partnership, or
other entity created or organized in or under the laws of the United States
or of any state thereof or in the District of Columbia, unless, in the case
of a partnership, Treasury Regulations provide otherwise; is an estate the
income of which is subject to United States federal income taxation
regardless of its source; or is a trust whose administration is subject to
the primary supervision of a United States court and which has one or more
United States persons who have the authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the
extent provided in Treasury Regulations, some trusts in existence on August
20, 1996, and treated as United States persons prior to this date that
elect to continue to be treated as United States persons, are also
considered U.S. stockholders.

     DISTRIBUTIONS GENERALLY. As long as we qualify as a REIT,
distributions out of our current or accumulated earnings and profits, other
than capital gain dividends discussed below, will constitute dividends
taxable to our taxable U.S. stockholders as ordinary income. These
distributions will not be eligible for the dividends-received deduction in
the case of U.S. stockholders that are corporations. To the extent that we
make distributions, other than capital gain dividends discussed below, in
excess of our current and accumulated earnings and profits, these
distributions will be treated first as a tax-free return of capital to each
U.S. stockholder. This treatment will reduce the adjusted basis which each
U.S. stockholder has in his shares of stock for tax purposes by the amount
of the distribution. This reduction will not, however, reduce a holder's
adjusted basis below zero. Distributions in excess of a U.S. stockholder's
adjusted basis in his shares will be taxable as capital gain, provided that
the shares have been held as a capital asset. In addition, these
distributions will be taxable as long-term capital gain if the shares have
been held for more than one year.

     Dividends that we declare in October, November, or December of any
year and that are payable to a stockholder of record on a specified date in
any of these months shall be treated as both paid by us and received by the
stockholder on December 31 of that year, provided we actually pay the
dividend on or before January 31 of the following calendar year.
Stockholders may not include in their own income tax returns any of our net
operating losses or capital losses.

     CAPITAL GAIN DISTRIBUTIONS. Distributions that we properly designate
as capital gain dividends will be taxable to U.S. stockholders as gains, to
the extent that they do not exceed our actual net capital gain for the
taxable year, from the sale or disposition of a capital asset. Depending on
the period of time we have held the assets which produced these gains, and
on designations which we may make, these gains may be taxable to non-
corporate U.S. stockholders at a 20% or 25% rate. U.S. stockholders that
are corporations may, however, be required to treat up to 20% of some
capital gain dividends as ordinary income.

     PASSIVE ACTIVITY LOSSES AND INVESTMENT INTEREST LIMITATIONS.
Distributions we make and gain arising from the sale or exchange by a U.S.
stockholder of our shares will not be treated as passive activity income.
As a result, U.S. stockholders generally will not be able to apply any
"passive losses" against this income or gain. Distributions we make, to the
extent they do not constitute a return of capital, generally will be
treated as investment income for purposes of computing the investment
income limitation. Gain arising from the sale or other disposition of our
shares, however, will not be treated as investment income under some
circumstances.

     Retention of Net Long-Term Capital Gains. We may elect to retain,
rather than distribute as a capital gain dividend, our net long-term
capital gains. If we make this election, we would pay tax on our retained
net long-term capital gains. In addition, to the extent we designate, a
U.S. stockholder generally would: include its proportionate share of our
undistributed long-term capital gains in computing its long-term capital
gains in its return for its taxable year in which the last day of our
taxable year falls subject to limitations as to the amount that is
includable; be deemed to have paid the capital gains tax imposed on us on
the designated amounts included in the U.S. stockholder's long-term capital
gains; receive a credit or refund for the amount of tax deemed paid by it;
increase the adjusted basis of its common stock by the difference between
the amount of includable gains and the tax deemed to have been paid by it;
and in the case of a U.S. stockholder that is a corporation, appropriately
adjust its earnings and profits for the retained capital gains in
accordance with Treasury Regulations to be prescribed by the IRS.

                       DISPOSITIONS OF COMMON STOCK

     If you are a U.S. stockholder and you sell or dispose of your shares
of common stock, you will recognize gain or loss for federal income tax
purposes in an amount equal to the difference between the amount of cash
and the fair market value of any property you receive on the sale or other
disposition and your adjusted basis in the shares for tax purposes. This
gain or loss will be capital if you have held the common stock as a capital
asset and will be long- term capital gain or loss if you have held the
common stock for more than one year. In general, if you are a U.S.
stockholder and you recognize loss upon the sale or other disposition of
common stock that you have held for six months or less, after applying
holding period rules set forth in the Internal Revenue Code, the loss you
recognize will be treated as a long-term capital loss, to the extent you
received distributions from us which were required to be treated as long-
term capital gains.

                            BACKUP WITHHOLDING

     We report to our U.S. stockholders and the IRS the amount of dividends
paid during each calendar year, and the amount of any tax withheld. Under
the backup withholding rules, a stockholder may be subject to backup
withholding at the rate of 31% with respect to dividends paid unless the
holder is a corporation or comes within other exempt categories and, when
required, demonstrates this fact, or provides a taxpayer identification
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with applicable requirements of the backup withholding
rules. A U.S. stockholder that does not provide us with his correct
taxpayer identification number may also be subject to penalties imposed by
the IRS. Any amount paid as backup withholding will be creditable against
the stockholder's income tax liability. In addition, we may be required to
withhold a portion of capital gain distributions to any stockholders who
fail to certify their non-foreign status. See "Taxation of Non-U.S.
Stockholders."


                    TAXATION OF TAX-EXEMPT STOCKHOLDERS

     The IRS has ruled that amounts distributed as dividends by a qualified
REIT do not constitute unrelated business taxable income when received by a
tax-exempt entity. Based on that ruling, provided that a tax-exempt
shareholder, except tax-exempt shareholders described below, has not held
its shares as "debt financed property" within the meaning of the Internal
Revenue Code and the shares are not otherwise used in a trade or business,
dividend income from us will not be unrelated business taxable income to a
tax-exempt shareholder. Similarly, income from the sale of shares will not
constitute unrelated business taxable income unless a tax-exempt
shareholder has held its shares as "debt financed property" within the
meaning of the Internal Revenue Code or has used the shares in its trade or
business.

     For tax-exempt shareholders which are social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts, and
qualified group legal services plans exempt from federal income taxation
under Internal Revenue Code Section 501(c)(7), (c)(9), (c)(17) and (c)(20),
respectively, income from an investment in our shares will constitute
unrelated business taxable income unless the organization is able to
properly deduct amounts set aside or placed in reserve for certain purposes
so as to offset the income generated by its investment in our shares. These
prospective investors should consult their own tax advisors concerning
these "set aside" and reserve requirements.

     Notwithstanding the above, however, the Omnibus Budget Reconciliation
Act of 1993 provides that, effective for taxable years beginning in 1994, a
portion of the dividends paid by a "pension held REIT" shall be treated as
unrelated business taxable income as to any trust which: is described in
Section 401(a) of the Internal Revenue Code; is tax-exempt under Section
501(a) of the Internal Revenue Code; and holds more than 10%, by value, of
the interests in a REIT. Tax-exempt pension funds that are described in
Section 401(a) of the Internal Revenue Code are referred to below as
"qualified trusts." A REIT is a "pension held REIT" if: it would not have
qualified as a REIT but for the fact that Section 856(h)(3) of the Internal
Revenue Code provides that stock owned by qualified trusts shall be
treated, for purposes of the "not closely held" requirement, as owned by
the beneficiaries of the trust, rather than by the trust itself; and either
at least one such qualified trust holds more than 25%, by value, of the
interests in a REIT, or one or more such qualified trusts, each of which
owns more than 10%, by value, of the interests in a REIT, holds in the
aggregate more than 50%, by value, of the interests in the REIT.

     The percentage of any REIT dividend treated as unrelated business
taxable income is equal to the ratio of: the unrelated business taxable
income earned by Home Properties, treating Home Properties as if it were a
qualified trust and therefore subject to tax on unrelated business taxable
income, to the total gross income of Home Properties. A de minimis
exception applies where the percentage is less than 5% for any year. The
provisions requiring qualified trusts to treat a portion of REIT
distributions as unrelated business taxable income will not apply if Home
Properties is able to satisfy the "not closely held" requirement without
relying upon the "look-through" exception with respect to qualified trusts.
As a result of the limitations on the transfer and ownership of stock
contained in our articles of incorporation, we are not and do not expect to
be classified as a "pension held REIT."

                     TAXATION OF NON-U.S. STOCKHOLDERS

     When we use the term "non-U.S. stockholders," we mean holders of
shares of common stock that are nonresident alien individuals, foreign
corporations, foreign partnerships or foreign estates or trusts. The rules
governing United States federal income taxation of the ownership and
disposition of stock by persons that are non-U.S. stockholders are complex.
No attempt is made in this prospectus to provide more than a brief summary
of these rules. Accordingly, this discussion does not address all aspects
of United States federal income tax and does not address state, local or
foreign tax consequences that may be relevant to a non-U.S. stockholder in
light of its particular circumstances. In addition, this discussion is
based on current law, which is subject to change, and assumes that we
qualify for taxation as a REIT. Prospective non- U.S. stockholders should
consult with their own tax advisers to determine the impact of federal,
state, local and foreign income tax laws with regard to an investment in
stock, including any reporting requirements.

     DISTRIBUTIONS. If we make a distribution that is not attributable to
gain from the sale or exchange of United States real property interests and
is not designated as capital gains dividends, then the distribution will be
treated as dividends of ordinary income to the extent it is made out of
current or accumulated earnings and profits. These distributions ordinarily
will be subject to withholding of United States federal income tax on a
gross basis at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. However, if the dividends are treated as
effectively connected with the conduct by the non-U.S. stockholder of a
United States trade or business, or if an income tax treaty applies, as
attributable to a United States permanent establishment of the non-U.S.
stockholder, the dividends will be subject to tax on a net basis at
graduated rates, in the same manner as domestic stockholders are taxed with
respect to such dividends and are generally not subject to withholding. Any
such dividends received by a non-U.S. stockholder that is a corporation may
also be subject to an additional branch profits tax at a 30% rate or such
lower rate as may be specified by an applicable income tax treaty. Under
current Treasury Regulations, dividends paid to an address in a country
outside the United States are generally presumed to be paid to a resident
of the country for purposes of determining the applicability of the
withholding rules discussed above and the applicability of a tax treaty
rate. Under some treaties, lower withholding rates generally applicable to
dividends do not apply to dividends from a REIT. Certification and
disclosure requirements must be satisfied to be exempt from withholding
under the effectively connected income and permanent establishment
exemptions discussed above.

     Distributions we make in excess of our current or accumulated earnings
and profits will not be taxable to a non-U.S. stockholder to the extent
that they do not exceed the adjusted basis of the stockholder's stock, but
rather will reduce the adjusted basis of such stock. To the extent that
these distributions exceed the adjusted basis of a non-U.S. stockholder's
stock, they will give rise to gain from the sale or exchange of his stock.
The tax treatment of this gain is described below. If it cannot be
determined at the time a distribution is made whether or not a distribution
will be in excess of current or accumulated earnings and profits, the
distribution will generally be treated as a dividend for withholding
purposes. However, the IRS will generally refund amounts that are withheld
if it is subsequently determined that the distribution was, in fact, in
excess of our current or accumulated earnings and profits.

     Distributions to a non-U.S. stockholder that we designate at the time
of distribution as capital gains dividends, other than those arising from
the disposition of a United States real property interest, generally will
not be subject to United States federal income taxation, unless: investment
in the stock is effectively connected with the non-U.S. stockholder's
United States trade or business, in which case the non-U.S. stockholder
will be subject to the same treatment as domestic stockholders with respect
to such gain, except that a stockholder that is a foreign corporation may
also be subject to the 30% branch profits tax, as discussed above; or the
non-U.S. stockholder is a nonresident alien individual who is present in
the United States for 183 days or more during the taxable year and has a
"tax home" in the United States, in which case the nonresident alien
individual will be subject to a 30% tax on the individual's capital gains.

     Distributions to a non-U.S. stockholder that are attributable to gain
from our sale or exchange of United States real property interests will
cause the non- U.S. stockholder to be treated as recognizing this gain as
income effectively connected with a United States trade or business. Non-
U.S. stockholders would thus generally be taxed at the same rates
applicable to domestic stockholders, subject to a special alternative
minimum tax in the case of nonresident alien individuals. Also, this gain
may be subject to a 30% branch profits tax in the hands of a non-U.S.
stockholder that is a corporation, as discussed above. We are required to
withhold 35% of any such distribution. That amount is creditable against
the non-U.S. stockholder's United States federal income tax liability. We
or any nominee (e.g., a broker holding shares in street name) may rely on a
certificate of non-foreign status on Form W-8 or Form W-9 to determine
whether withholding is required on gains realized from the disposition of
United States real property interests. A domestic person who holds shares
of common stock on behalf of a non-U.S. stockholder will bear the burden of
withholding, provided that we have properly designated the appropriate
portion of a distribution as a capital gain dividend.

     SALE OF STOCK. If you are a non-U.S. stockholder and you recognize
gain upon the sale or exchange of shares of stock, the gain generally will
not be subject to United States taxation unless the stock constitutes a
"United States real property interest" within the meaning of FIRPTA. If we
are a "domestically controlled REIT," then the stock will not constitute a
"United States real property interest." A "domestically-controlled REIT" is
a REIT in which at all times during a specified testing period less than
50% in value of its stock is held directly or indirectly by non-U.S.
stockholders. Because our shares of stock are publicly traded, there is no
assurance that we are or will continue to be a "domestically-controlled
REIT." Notwithstanding the foregoing, if you are a non-U.S. stockholder and
you recognize gain upon the sale or exchange of shares of stock and the
gain is not subject to FIRPTA, the gain will be subject to United States
taxation if: your investment in the stock is effectively connected with a
United States trade or business, or, if an income treaty applies, is
attributable to a United States permanent establishment; or you are a
nonresident alien individual who is present in the United States for 183
days or more during the taxable year and you have a "tax home" in the
United States. In this case, a nonresident alien individual will be subject
to a 30% United States withholding tax on the amount of such individual's
gain.

     If we are not or cease to be a "domestically-controlled REIT" whether
gain arising from the sale or exchange by a non-U.S. stockholder of shares
of stock would be subject to United States taxation under FIRPTA as a sale
of a "United States real property interest" will depend on whether the
shares are "regularly traded," as defined by applicable Treasury
Regulations, on an established securities market and on the size of the
selling non-U.S. stockholder's interest in our shares. If gain on the sale
or exchange of shares of stock were subject to taxation under FIRPTA, the
non-U.S. stockholder would be subject to regular United States income tax
on this gain in the same manner as a U.S. stockholder and the purchaser of
the stock would be required to withhold and remit to the IRS 10% of the
purchase price. In addition in this case, non- U.S. stockholders would be
subject to any applicable alternative minimum tax, nonresident alien
individuals may be subject to a special alternative minimum tax and foreign
corporations may be subject to the 30% branch profits tax.

     BACKUP WITHHOLDING TAX AND INFORMATION REPORTING. Backup withholding
tax generally is a withholding tax imposed at the rate of 31% on reportable
payments, as defined in Section 3406 of the Internal Revenue Code, to
persons that fail to furnish the required information under the United
States information reporting requirements. Backup withholding tax and
information reporting will generally not apply to distributions paid to
non-U.S. stockholders outside the United States that are treated as:
dividends subject to the 30%, or lower treaty rate, withholding tax
discussed above; capital gains dividends; or distributions attributable to
gain from our sale or exchange of United States real property interests. As
a general matter, backup withholding and information reporting will not
apply to a payment of the proceeds of a sale of stock by or through a
foreign office of a foreign broker. Information reporting, but not backup
withholding, will apply, however, to a payment of the proceeds of a sale of
stock by a foreign office of a broker that: is a United States person;
derives 50% or more of its gross income for specific periods from the
conduct of a trade or business in the United States; or is a "controlled
foreign corporation" for United States tax purposes. Information reporting
will not apply if the broker has documentary evidence in its records that
the holder is a non-U.S. stockholder and other conditions are met, or the
stockholder otherwise establishes an exemption. Payment to or through a
United States office of a broker of the proceeds of sale of stocks is
subject to both backup withholding and information reporting unless the
stockholder certifies under penalties of perjury that the stockholder is a
non-U.S. stockholder, or otherwise establishes an exemption. A non-U.S.
stockholder may obtain a refund of any amounts withheld under the backup
withholding rules by filing the appropriate claim for refund with the IRS.

     NEW WITHHOLDING REGULATIONS. Final regulations dealing with
withholding tax on income paid to foreign persons and related matters were
recently promulgated. In general, these new withholding regulations do not
significantly alter the substantive withholding and information reporting
requirements, but unify current certification procedures and forms and
clarify reliance standards. For example, these new withholding regulations
adopt a certification rule under which a foreign stockholder who wishes to
claim the benefit of an applicable treaty rate with respect to dividends
received from a United States corporation will be required to satisfy
certification and other requirements. In addition, these new withholding
regulations require a corporation that is a REIT to treat as a dividend the
portion of a distribution that is not designated as a capital gain dividend
or return of basis and apply the 30% withholding tax, subject to any
applicable deduction or exemption, to such portion, and to apply the FIRPTA
withholding rules, discussed above, with respect to the portion of the
distribution designated by Home Properties as capital gain dividend. These
new withholding regulations will generally be effective for payments made
after December 31, 2000, subject to transition rules. The discussion set
forth above in "Taxation of Non-U.S. Stockholders" does not take these new
withholding regulations into account. Prospective non-U.S. stockholders are
strongly urged to consult their own tax advisors with respect to these new
withholding regulations.

                 TAX ASPECTS OF THE OPERATING PARTNERSHIP

     GENERAL. Substantially all of our investments will be held indirectly
through the Operating Partnership. In general, partnerships are "pass-
through" entities which are not subject to federal income tax. Rather,
partners are allocated their proportionate shares of the items of income,
gain, loss, deduction and credit of a partnership, and are potentially
subject to tax thereon, without regard to whether the partners receive a
distribution from the partnership. We will include in our income our
proportionate share of the foregoing partnership items for purposes of the
various REIT income tests and in the computation of our REIT taxable
income. Moreover, for purposes of the REIT asset tests, we will include our
proportionate share of assets held by the Operating Partnership. See
"Taxation of Home Properties."

     ENTITY CLASSIFICATION. Our interests in the Operating Partnership
involve special tax considerations, including the possibility of a
challenge by the IRS of the status of the Operating Partnership as a
partnership, as opposed to an association taxable as a corporation, for
federal income tax purposes. If the Operating Partnership were treated as
an association, it would be taxable as a corporation and therefore be
subject to an entity-level tax on its income. In such a situation, the
character of our assets and items of gross income would change and preclude
us from satisfying the asset tests and possibly the income tests (see
"Taxation of Home Properties - Asset Tests" and "-Income Tests"). This, in
turn, would prevent us from qualifying as a REIT. See "Taxation of Home
Properties - Failure to Qualify" above for a discussion of the effect of
our failure to meet these tests for a taxable year. In addition, a change
in the Operating Partnership's status for tax purposes might be treated as
a taxable event. If so, we might incur a tax liability without any related
cash distributions.

     Treasury Regulations that apply for tax period beginning on or after
January 1, 1997 provide that an "eligible entity" may elect to be taxed as
a partnership for federal income tax purposes. An eligible entity is a
domestic business entity not otherwise classified as a corporation and
which has at least two members. Unless it elects otherwise, an eligible
entity in existence prior to January 1, 1997, will have the same
classification for federal income tax purposes that it claimed under the
entity classification Treasury Regulations in effect prior to this date. In
addition, an eligible entity which did not exist, or did not claim a
classification, prior to January 1, 1997, will be classified as a
partnership for federal income tax purposes unless it elects otherwise. The
Operating Partnership intends to claim classification as a partnership
under these regulations.

     Even if the Operating Partnership is taxable as a partnership under
these Treasury Regulations, it could be treated as a corporation for
federal income tax purposes under the "publicly traded partnership" rules
of Section 7704 of the Internal Revenue Code. A publicly traded partnership
is a partnership whose interests trade on an established securities market
or are readily tradable on a secondary market, or the substantial
equivalent thereof. While units of the Operating Partnership are not and
will not be traded on an established trading market, there is some risk
that the IRS might treat the units held by the limited partners of the
Operating Partnership as readily tradable because, after any applicable
holding period, they may be exchanged for our common stock, which is traded
on an established market. A publicly traded partnership will be treated as
a corporation for federal income tax purposes unless at least 90% of such
partnership's gross income for a taxable year consists of "qualifying
income" under the publicly traded partnership provisions of Section 7704 of
the Internal Revenue Code. "Qualifying income" under Section 7704 of the
Internal Revenue Code includes interest, dividends, real property rents,
gains from the disposition of real property, and certain income or gains
from the exploitation of natural resources. Therefore, qualifying income
under Section 7704 of the Internal Revenue Code generally includes any
income that is qualifying income for purposes of the 95% gross income test
applicable to REITs. We anticipate that the Operating Partnership will
satisfy the 90% qualifying income test under Section 7704 of the Internal
Revenue Code and, thus, will not be taxed as a corporation.

     There is one significant difference, however, regarding rent received
from related party tenants. For a REIT, rent from a tenant does not qualify
as rents from real property if the REIT and/or one or more actual or
constructive owners of 10% or more of the REIT actually or constructively
own 10% or more of the tenant. See "Taxation of Home Properties - Income
Tests." Under Section 7704 of the Internal Revenue Code, rent from a tenant
is not qualifying income if a partnership and/or one or more actual or
constructive owners of 5% or more of the partnership actually or
constructively own 10% or more of the tenant.

     As described above, as a result of the passage of the REIT
Modernization Act, for taxable years beginning after December 31, 2000, the
Operating Partnership should be able to lease its real properties to a
taxable REIT subsidiary and the rents received from that subsidiary would
not be disqualified from being "rents from real property" under the REIT
rules by reason of the Operating Partnership's ownership interest in the
subsidiary. See "Federal Income Taxation of Home Properties-Income Tests."
Home Properties and the Operating Partnership have not made a decision
whether or not to lease any properties to taxable REIT subsidiaries in the
future. If should be noted, though, that as a further result of the passage
of the REIT Modernization Act, rent received from a taxable REIT subsidiary
also would not be disqualified from being "qualifying income" under Section
7704 of the Internal Revenue Code because of the Operating Partnership's
ownership of the taxable REIT subsidiary. Accordingly, Home Properties
could lease its real property to one or more taxable REIT subsidiaries
without, by virtue of that act, causing the Operating Partnership to be
treated as a corporation for federal income tax purposes.

     Accordingly, we will need to monitor compliance with both the REIT
rules and the publicly traded partnership rules. The Operating Partnership
has not requested, nor does it intend to request, a ruling from the IRS
that it will be treated as a partnership for federal income tax purposes.
In the opinion of Nixon Peabody LLP, which is based on the provisions of
the partnership agreement of the Operating Partnership and on certain
factual assumptions and representations of Home Properties, the Operating
Partnership has a reasonable basis for its claim to be classified as a
partnership for federal income tax purposes and therefore should be taxed
as a partnership rather than an association taxable as a corporation for
periods prior to January 1, 1997. Nixon Peabody LLP's opinion is not
binding on the IRS or the courts.

     PARTNERSHIP ALLOCATIONS. A partnership agreement will generally
determine the allocation of income and losses among partners. However,
these allocations will be disregarded for tax purposes if they do not
comply with the provisions of Section 704(b) of the Internal Revenue Code
and the Treasury Regulations promulgated under this section of the Internal
Revenue Code. Generally, Section 704(b) and the Treasury Regulations
promulgated under this section of the Internal Revenue Code require that
partnership allocations respect the economic arrangement of the partners.
If an allocation is not recognized for federal income tax purposes, the
item subject to the allocation will be reallocated in accordance with the
partners' interests in the partnership. This reallocation will be
determined by taking into account all of the facts and circumstances
relating to the economic arrangement of the partners with respect to such
item. The Operating Partnership's allocations of taxable income and loss
are intended to comply with the requirements of Section 704(b) of the
Internal Revenue Code and the Treasury Regulations promulgated under this
section of the Internal Revenue Code.

     TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES. Under Section 704(c)
of the Internal Revenue Code, income, gain, loss and deduction attributable
to appreciated or depreciated property that is contributed to a partnership
in exchange for an interest in the partnership, must be allocated in a
manner so that the contributing partner is charged with the "book-tax
difference" associated with the property at the time of the contribution.
The book-tax difference with respect to property that is contributed to a
partnership is generally equal to the difference between the fair market
value of contributed property at the time of contribution and the adjusted
tax basis of the property at the time of contribution. These allocations
are solely for federal income tax purposes and do not affect the book
capital accounts or other economic or legal arrangements among the
partners. The Operating Partnership was formed by way of contributions of
appreciated property, including some of the properties. Moreover,
subsequent to the formation of the Operating Partnership, additional
persons have contributed appreciated property to the Operating Partnership
in exchange for interests in the Operating Partnership.

     The partnership agreement requires that these allocations be made in a
manner consistent with Section 704(c) of the Internal Revenue Code. In
general, limited partners of the Operating Partnership who acquired their
limited partnership interests through a contribution of appreciated
property will be allocated depreciation deductions for tax purposes which
are lower than these deductions would be if determined on a pro rata basis.
In addition, in the event of the disposition of any of the contributed
assets which have a book-tax difference all income attributable to the
book-tax difference will generally be allocated to the limited partners who
contributed the property, and we will generally be allocated only our share
of capital gains attributable to appreciation, if any, occurring after the
time of contribution to the Operating Partnership. This will tend to
eliminate the book-tax difference over the life of the Operating
Partnership. However, the special allocation rules of Section 704(c) do not
always entirely eliminate the book-tax difference on an annual basis or
with respect to a specific taxable transaction such as a sale. Thus, the
carryover basis of the contributed assets in the hands of the Operating
Partnership may cause us to be allocated lower depreciation and other
deductions. Possibly we could be allocated an amount of taxable income in
the event of a sale of these contributed assets in excess of the economic
or book income allocated to us as a result of the sale. This may cause us
to recognize taxable income in excess of cash proceeds, which might
adversely affect our ability to comply with the REIT distribution
requirements. See "Taxation of Home Properties - Annual Distribution
Requirements."

     Treasury Regulations issued under Section 704(c) of the Internal
Revenue Code provide partnerships with a choice of several methods of
accounting for book- tax differences, including retention of the
"traditional method" or the election of other methods which would permit
any distortions caused by a book-tax difference to be entirely rectified on
an annual basis or with respect to a specific taxable transaction such as a
sale. We and the Operating Partnership have determined to use the
"traditional method" for accounting for book-tax differences for the
properties initially contributed to the Operating Partnership and for some
assets acquired subsequently. We and the Operating Partnerships have not
yet decided what method will be used to account for book-tax differences
for properties acquired by the Operating Partnership in the future. Any
property acquired by the Operating Partnership in a taxable transaction
will initially have a tax basis equal to its fair market value, and Section
704(c) of the Internal Revenue Code will not apply.

     BASIS IN THE OPERATING PARTNERSHIP INTEREST. The adjusted tax basis in
our interest in the Operating Partnership generally will be equal to: the
amount of cash and the basis of any other property we contribute to the
Operating Partnership, increased by our allocable share of the Operating
Partnership's income and our allocable share of indebtedness of the
Operating Partnership, and reduced, but not below zero, by our allocable
share of losses suffered by the Operating Partnership, the amount of cash
distributed to us and constructive distributions resulting from a reduction
in our share of indebtedness of the Operating Partnership. If the
allocation of our distributive share of the Operating Partnership's loss
exceeds the adjusted tax basis of our partnership interest in the Operating
Partnership, the recognition of this excess loss will be deferred until
such time and to the extent that we have adjusted tax basis in our interest
in the Operating Partnership. We will recognize taxable income to the
extent that the Operating Partnership's distributions, or any decrease in
our share of the indebtedness of the Operating Partnership, exceeds our
adjusted tax basis in the Operating Partnership. A decrease in our share of
the indebtedness of the Operating Partnership is considered a cash
distribution.

     SALE OF PARTNERSHIP PROPERTY. Generally, any gain realized by a
partnership on the sale of property held by the partnership for more than
one year will be long-term capital gain, except for any portion of such
gain that is treated as depreciation or cost recovery recapture. However,
under the REIT Requirements, Home Properties' share as a partner of any
gain realized by the Operating Partnership on the sale of any property held
as inventory or other property held primarily for sale to customers in the
ordinary course of a trade or business will be treated as income from a
prohibited transaction that is subject to a 100% penalty tax. See "Taxation
of Home Properties." Such prohibited transaction income will also have an
adverse effect upon Home Properties' ability to satisfy the income tests
for REIT status. Under existing law, whether property is held as inventory
or primarily for sale to customers in the ordinary course of a trade or
business is a question of fact that depends on all the facts and
circumstances with respect to the particular transaction.

     A safe harbor to avoid classification as a prohibited transaction
exists as to real estate assets held for the production of rental income by
a REIT for at least four years where in any taxable year the REIT has made
no more than seven sales of property or, in the alternative, the aggregate
of the adjusted bases of all properties sold does not exceed 10% of the
adjusted bases of all of the REIT's properties during the year and the
expenditures includable in a property's basis made during the four-year
period prior to disposition must not exceed 30% of the property's net sales
price. The Operating Partnership intends to hold its properties for
investment with a view to long- term appreciation, to engage in the
business of acquiring, developing, owning, and operating and leasing the
properties and to make such occasional sales of the properties, including
adjoining land, as are consistent with Home Properties' and the Operating
Partnership's investment objectives. No assurance can be given, however,
that every property sale by the Operating Partnership will constitute a
sale of property held for investment.

                          OTHER TAX CONSEQUENCES

     STATE AND LOCAL TAX CONSIDERATIONS. We may be subject to state or
local taxation in various state or local jurisdictions, including those in
which we transact business and our stockholders may be subject to state or
local taxation in various state or local jurisdiction, including those in
which they reside. Our state and local tax treatment may not conform to the
federal income tax consequences discussed above. In addition, your state
and local tax treatment may not conform to the federal income tax
consequences discussed above. Consequently, you should consult your own tax
advisors regarding the effect of state and local tax laws on an investment
in our shares.

     THE MANAGEMENT COMPANIES. A portion of the cash to be used by the
Operating Partnership to fund distributions to partners is expected to come
from the Management Companies, through interest payments and dividends on
non-voting preferred stock to be held by the Operating Partnership. The
Management Companies will pay federal and state tax on their net income at
full corporate rates, which will reduce the cash available for distribution
to stockholders. Home Properties expects that the Management Companies'
income, after deducting its expenses, will not give rise to significant
corporate tax liabilities. The amount of corporate tax liability will
increase if the IRS disallows the items of expense which Home Properties
expects to be allocated to the Management Companies.

     As described above in "Taxation of Home Properties -  Income Tests"
and " - Asset Tests," some of the non-controlled subsidiaries may elect to
be treated as a taxable REIT subsidiary for years commencing after December
31, 2000. The non-controlled subsidiaries that make this election will be
restrained in their ability to reduce their tax liability for two reasons.
First, taxable REIT subsidiaries will be limited in their ability to deduct
interest payments made to an affiliated REIT. Accordingly, if a non-
controlled subsidiary elects to be treated as a taxable REIT subsidiary, it
will be limited significantly in its ability to deduct interest payments on
notes issued to the Operating Partnership. Second, if a taxable REIT
subsidiary pays an amount to a REIT that exceeds the amount that would be
paid in an arm's length transaction, the REIT generally will be subject to
an excise tax equal to 100% of the excess. This rule generally will apply
to amounts paid to the Operating Partnership by a non-controlled subsidiary
that elects to be treated as a taxable REIT subsidiary.

     POSSIBLE FEDERAL TAX DEVELOPMENTS. The rules dealing with federal
income taxation are constantly under review by the IRS, the Treasury
Department and Congress. New federal tax legislation or other provisions
may be enacted into law or new interpretations, rulings or Treasury
Regulations could be adopted, all of which could affect the taxation of
Home Properties or of its stockholders. No prediction can be made as to the
likelihood of passage of any new tax legislation or other provisions either
directly or indirectly affecting Home Properties or its stockholders.
Consequently, the tax treatment described herein may be modified
prospectively or retroactively by legislative, judicial or administrative
action.
             RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
                            PREFERRED DIVIDENDS

     For purposes of computing the ratio of earnings to combined fixed
charges, "earnings" consists of income from operations before Federal income
taxes and fixed charges.  "Fixed charges" consists of interest expense,
capitalized interest, amortization of debt expense, such portion of rental
expense as can be demonstrated to be representative of the interest factor
in the particular case and preferred stock dividend requirements.  Please
refer to Exhibit 12.1 for detailed computation.


                           PLAN OF DISTRIBUTION

     The shares offered hereby may be offered and sold from time to time as
market conditions permit on the New York Stock Exchange, or otherwise, at
prices and terms then prevailing, at prices related to the then-current
market price, or in negotiated transactions by the holders thereof, which
may include donees and pledgees.  The shares may be sold by one or more of
the following methods, without limitation:  (a) a block trade in which a
broker or dealer so engaged will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate a
transaction; (b) purchases by a broker or a dealer as principal and resale
by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (d) face-to-face transactions between sellers and
purchasers without a broker or dealer.  In effecting sales, brokers or
dealers engaged by one or more of the Selling Shareholders may arrange for
other brokers or dealers to participate.  The Selling Shareholders and such
brokers or dealers may receive commissions or discounts from Selling
Shareholders in amounts to be negotiated.  Such brokers and dealers and any
other participating brokers or dealers may be deemed "underwriters" under
the Securities Act.

                                  EXPERTS

     The consolidated balance sheets as of December 31, 1999 and 1998, and
the consolidated statements of operations, comprehensive income,
stockholders' equity and cash flows for each of the three years in the
period ended December 31, 1999, incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.

                               LEGAL MATTERS

     The validity of the securities offered hereby will be passed upon by
Nixon Peabody LLP, Rochester, New York.  Certain partners of Nixon Peabody
LLP own Units equal to less than 1% of the equity of Home Properties on a
fully diluted basis.  Nixon Peabody LLP has also provided an opinion with
respect to certain tax matters which form the basis of the discussion under
the heading "Federal Income Tax Matters."


<PAGE>
                                  PART II
                  INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table is an itemized listing of expenses to be incurred by
Home  Properties in connection with the issuance and distribution of the
shares of Common Stock being registered hereby, other than discounts and
commissions:

SEC Registration Fee ...........................      $ 14,640.55
NYSE Listing Fee ...........................             2,000.00*
Legal Fees and Expenses ....................             3,500.00*
Accounting Fees and Expenses ...............             1,500.00*
Miscellaneous ..............................             2,000.00*
                                                       ----------
Total ................................                $ 23,640.55*
*Estimate

Item 15. Indemnification of Directors and Officers

      Home  Properties' officers and directors are and will be indemnified
under Maryland law, the Articles of Incorporation of Home Properties and
the Partnership Agreement ("Operating Partnership Agreement") of Home
Properties of New York, L.P., a New York limited partnership of which  Home
Properties is the general partner, against certain liabilities. The
Articles of Incorporation require  Home  Properties to indemnify its
directors and officers to the fullest extent permitted from time to time by
the laws of Maryland. The Bylaws contain provisions which implement the
indemnification provisions of the Articles of Incorporation.

     The Maryland General Corporation Law ("MGCL") permits a corporation to
indemnify its directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by
them in connection with any proceeding to which they may be made a party by
reason of their service in those or other capacities unless it is
established that the act or omission of the director or officer was
material to the matter giving rise to the proceeding and was committed in
bad faith or was the result of active and deliberate dishonesty, or the
director or officer actually received an improper personal benefit in
money, property or services, or in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or
omission was unlawful. No amendment of the Articles of Incorporation of
Home Properties shall limit or eliminate the right to indemnification
provided with respect to acts or omissions occurring prior to such
amendment or repeal. Maryland law permits Home Properties to provide
indemnification to an officer to the same extent as a director, although
additional indemnification may be provided if such officer is not also a
director.

     The MGCL permits the articles of incorporation of a Maryland
corporation to include a provision limiting the liability of its directors
and officers to the corporation and its stockholders for money damages,
subject to specified restrictions.  The MGCL does not however, permit the
liability of directors and officers to the corporation or its stockholders
to be limited to the extent that (1) it is proved that the person actually
received an improper benefit or profit in money, property or services (to
the extent such benefit or profit was received) or (2) a judgment or other
final adjudication adverse to such person is entered in a proceeding based
on a finding that the person's action, or failure to act, was the result of
active and deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding. The Articles of Incorporation of Home
Properties contain a provision consistent with the MGCL limiting the
liability of directors and officers to Home Properties. No amendment of the
Articles of Incorporation shall limit or eliminate the limitation of
liability with respect to acts or omissions occurring prior to such
amendment or repeal.

     The Operating Partnership Agreement also provides for indemnification
of Home Properties and its officers and directors to the same extent
indemnification is provided to officers and directors of  Home  Properties
in its Articles of Incorporation, and limits the liability of Home
Properties and its officers and directors to the Operating Partnership and
its partners to the same extent liability of officers and directors of
Home  Properties to Home Properties and its stockholders is limited under
Home Properties' Articles of Incorporation.

     Home Properties has entered into indemnification agreements with each
of Home Properties' directors and certain of its officers. The
indemnification agreements require, among other things, that Home
Properties indemnify its directors and those officers to the fullest extent
permitted by law, and advance to the directors and officers all related
expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. Home Properties also must indemnify and
advance all expenses incurred by directors and officers seeking to enforce
their rights under the indemnification agreements, and cover directors and
officers under Home Properties' directors' and officers' liability
insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by provisions in the
Articles of Incorporation and the Bylaws and the Operating Partnership
Agreement of the Operating Partnership, it provides greater assurance to
directors and officers that indemnification will be available, because, as
a contract, it cannot be modified unilaterally in the future by the Board
of Directors or by the stockholders to eliminate the rights it provides.
Home Properties has purchased insurance under a policy that insures both
Home Properties and its officers and directors against exposure and
liability normally insured against under such policies, including exposure
on the indemnities described above.

Item 16. Exhibits

5.1  Opinion of Nixon Peabody LLP as to legality of Common Stock*
8.1  Opinion of Nixon Peabody as to certain tax matters*
12.1 Computation of Ratios to Earnings to Combined Fixed Charges and
     Preferred Stock Dividend*
23.1 Consent of Nixon Peabody LLP (included as part of Exhibits 5.1
     and 8.1)
23.2 Consent of PricewaterhouseCoopers LLP*
24   Power of Attorney (included on signature page)

* Included with this filing.



<PAGE>
Item 17. Undertakings

     Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

     The undersigned Registrant hereby undertakes that:

     (1) To file, during any period in which offers or sales are being
made, a post- effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.

     (2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

     (3) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating

to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

(1) To remove from registration by means of a post-effective amendment any
   of the securities being registered which remain unsold at the
   termination of the offering.

<PAGE>
                                SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Rochester, New York, on the
31{st} day of August, 2000.

                              HOME PROPERTIES OF NEW YORK, INC.

                               By: /s/ Amy L. Tait
                              ---------------------------
                              Amy L. Tait
                              Executive Vice President

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Norman P.
Leenhouts, Nelson B. Leenhouts, Richard J. Crossed and Amy L. Tait, and
each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post- effective amendments filed pursuant to Rule 462(b) of the Securities
Act of 1933 or otherwise) to the Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto such
attorney-in-fact and agents, and each of them, full power and authority to
do and person each and every act and thing requisite or necessary that he
might do in person. Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.

Signature                          Title                    Date

/S/ NORMAN P. LEENHOUTS  Director, Chairman                 August 31, 2000
Norman P. Leenhouts      and Co-Chief Executive Officer
                         (Principal Executive Officer)

/S/ NELSON B. LEENHOUTS  Director, President                August 31, 2000
Nelson B. Leenhouts      and Co-Chief Executive Officer
                         (Principal Executive Officer)
/S/ RICHARD J. CROSSED   Director, Executive Vice           August 31, 2000
Richard J. Crossed       President

/S/ AMY L. TAIT          Director, Executive Vice           August 31, 2000
Amy L. Tait              President and Chief Operating Officer



/S/ DAVID P. GARDNER     Vice President,Chief               August 31, 2000
David P. Gardner         Financial Officer and Treasurer
                         (Principal Financial and Accounting Officer)

/S/ BURTON S. AUGUST, SR      Director                      August 31, 2000
Burton S. August, Sr

/S/ WILLIAM BALDERSTON, III   Director                      August 31, 2000
William Balderston, III

/S/ LEONARD F. HELBIG, III    Director                      August 31, 2000
Leonard F. Helbig, III

/S/ ALAN L. GOSULE            Director                      August 31, 2000
Alan L. Gosule

/S/ ROGER W. KOBER            Director                      August 31, 2000
Roger W. Kober

/S/ ALBERT H. SMALL           Director                      August 31, 2000
Albert H. Small

/S/ CLIFFORD W. SMITH, JR     Director                      August 31, 2000
Clifford W. Smith, Jr.

/S/ PAUL L. SMITH             Director                      August 31, 2000
Paul L. Smith














<PAGE>
                               EXHIBIT INDEX
                     Home Properties of New York, Inc.
                              (the "Company")
             Registration Statement on Form S-3 No. 333-______

NUMBER    DESCRIPTION                                  LOCATION


5.1       Opinion of Nixon Peabody LLP regarding the       *
          legality of the Common Stock being registered

8.1       Opinion of Nixon Peabody LLP regarding           *
          certain tax matters

12.1      Computation of Ratios to Earnings to Combined    *
          Fixed Charges And Preferred Stock Dividend

23.1      Consent of Nixon Peabody LLP                Included with
                                                      Exhibits 5.1
                                                      and 8.1

23.2      Consent of PricewaterhouseCoopers LLP             *


24        Power of Attorney                            Included on
                                                       signature page

*  Filed herewith


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