CONTRIBUTION AGREEMENT



     THIS CONTRIBUTION AGREEMENT ("this Agreement") made as of the 7th day of

September, 2000, by and between Elk Grove Terrace II and III, L.P. an Illinois

limited partnership (the "Project Partnership"), having its principal office at

3235 Vollmer Road, Suite 204, Flossmoor, IL 60422, Elk Grove Terrace, L.P. an

Illinois limited partnership (the "Upper Tier Partnership") having its

principal office at 3235 Vollmer Road, Suite 204, Flossmoor, IL 60422 and Home

Properties of New York, L.P., a New York limited partnership ("Home

Properties") and Home Properties of New York, Inc., a Maryland Corporation

("HME"), both having their principal office at 850 Clinton Square, Rochester,

New York 14604.



                             W I T N E S S E T H:



     This Agreement is made with reference to the following facts and

objectives:



     (a)   Trust No. 2006 with Amalgamated Trust and Savings Bank as Trustee

under Trust Agreement dated September 2, 1968, an Illinois land trust (the

"Trust") owns a 100% fee simple interest in an Illinois apartment property

known as Cypress Place Apartments (the "Property").



     (b)   The Property comprises 192 dwelling units and is situated upon land

owned in fee simple by the Trust.



     (c)   The beneficiary of the Trust is the Project Partnership.



     (d)   The general partners of the Project Partnership are Dr. Martin Gecht

and Bernard Wolf (the "General Partner") and the limited partner is the Upper

Tier  Partnership.



     (e)   The General Partner is the general partner of the Upper Tier

Partnership and the other individuals listed on Schedule 1 are the limited

partners of the Upper Tier Partnership (the "Investors").



     (f)   Upon the terms and conditions set forth in this Agreement, Home

Properties desires to obtain 100% of the general and limited partnership

interests in the Project Partnership and 100% of the general and limited

partnership interests in the Upper Tier Partnership (the "Interests" and each

an "Interest") together with the related Personal Property, Service Contracts

and Trade Names (all as hereinafter defined), in exchange for limited

partnership interests (the "OP Units") in Home Properties and cash.



(a)        The Consideration (as herein defined), whether in OP

Units or cash, is to be allocated among the General Partner and the Investors

in accordance with SCHEDULE 1 attached hereto.



     (h)   It is expected that the exchange of the Interests for OP Units (but

not the cash portion of the Consideration) will qualify for Federal income tax

purposes, as a tax free transfer, pursuant to Section 721 of the Code.



     (i)   As used in this Agreement with initial capital letters, the

following terms, in each instance, shall have the meaning ascribed thereto:



     "Capital Account Deficit" shall mean and refer to the negative Capital

Account amount of each Unit Partner (as hereinafter defined) for Federal income

tax purposes, as at the relevant date;



     "Code" shall mean and refer to the Internal Revenue Code of 1986, as

amended;



     "Environmental Law" shall mean and refer to any Federal, state, county or

municipal environmental, health, chemical use, safety or sanitation law,

statute, ordinance or code currently in effect relating to the protection of

the environment, and/or governing the use, storage, treatment, generation,

transportation, processing, handling, production or disposal of any Hazardous

Materials, and the rules, regulations and orders promulgated and/or issued

thereunder;



     "Existing Lender" shall mean and refer to Reilly Mortgage Capital

Corporation/Federal National Mortgage Association;



     "Existing Loan" shall mean the Mortgage Note in favor of the Existing

Lender, which has a principal balance as of December 31, 1999 of approximately

$6,589,340 and which is secured by a mortgage or deed of trust on the Property;



     "General Partner" shall mean and refer to Dr. Martin Gecht and Bernard

Wolf;



     "Hazardous Materials" shall mean and refer to any hazardous substances

described or defined in (i) the Comprehensive Environmental Response,

Compensation and Liability Act of 1980, as amended; (ii) the Hazardous

Materials Transportation Act, as amended; (iii) the Resource Conservation and

Recovery Act, as amended; (iv) the Toxic Substances Control Act, as amended;

and (v) any applicable Illinois Environmental Laws, and the regulations

promulgated thereunder, in each case, as at the date of this Agreement;



     "HME" shall mean and refer to Home Properties of New York, Inc., a

Maryland corporation (which operates as a self-administered, and self-managed,

equity real estate investment trust);



     "HME Common Shares" shall mean and refer to the shares of common stock in

HME, which are traded on the New York Stock Exchange;



     "Home Properties" shall mean and refer to Home Properties of New York,

L.P., a New York limited partnership (in which HME is the sole general partner,

and through which HME conducts its operational, management and investing

activities);



     "Investors" shall mean the limited partners of Elk Grove Terrace, L.P., an

Illinois limited partnership;



     "OP Units" shall mean and refer to limited partnership interests in Home

Properties, which are, subject to restrictions and are exchangeable, on a one-

to-one basis, for HME Common Shares pursuant to the terms of the Operating

Partnership Agreement;



     "Partner" shall mean  the General Partner and the  Investors and

"Partners" shall refer to both of them;



     "Partnerships" shall mean and refer collectively to the Project

Partnership and the Upper Tier Partnership and "Partnership" shall mean and

refer to each of the  Partnerships;



     "Project Partnership" shall refer to Elk Grove Terrace II and III, L.P.,

an Illinois limited partnership.



     "Property" shall mean and refer to the apartment project known as Cypress

Place Apartments, including: (i) the land occupied by such apartment project

(the "Land"), as more particularly described on Exhibit A attached hereto,

together with (a) all and singular the easements, rights-of-way, rights,

privileges, benefits, tenements, hereditaments and appurtenances thereunto

belonging or in anywise appertaining, and (b) all right, title and interest of

the Trust and the Partnerships in and to any land lying in the bed of any

street, road, avenue or alley, open or proposed, public or private, in front

of, behind, or otherwise adjoining the Land, or any part of the Land,

including, without limitation, all right, title and interest of the Partnership

in and to (1) any award made after the date of this Agreement as a result of

condemnation, or in lieu thereof, and (2) any unpaid award as at the date of

this Agreement as a result of condemnation, or in lieu thereof subject to the

terms of Section 19(a) hereof; and (ii) all buildings, structures, fixtures,

facilities, installations and other improvements of every kind and description

now or hereafter in, on, over and under the Land (the "Improvements"),

including, without limitation, any and all plumbing, air conditioning, heating,

ventilating, mechanical, electrical and other utility systems, and fixtures,

parking lots and facilities, landscaping, roadways, fences, mail boxes,

sidewalks, maintenance buildings, clubhouse, office, swimming pools and other

recreational facilities, security devices, signs and light fixtures;

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