Will Co-op Disclosure Bills Finally Pass This Year?

Cracks continue to appear in the armor New York City co-op boards have worn for more than a century. There are now two bills before the State Legislature that would dent that armor by requiring co-op boards to reveal their reason(s) for rejecting any purchase application, and to do so within a set time frame. Currently, boards can reject buyers for any or no reason – which they are not required to divulge – provided they don’t discriminate against members of numerous “protected classes.” While these bills promoting transparency have failed for years, it now appears they have a chance for passage in Democrat-controlled Albany.

A report in California News Times explains why some people believe the bills should pass: because, they contend, discrimination by co-op boards, though rare, persists – and it’s almost impossible to prove discrimination in court.

Ask Stefani Berkin, president of the brokerage R New York. Berkin spent much of 2019 visiting apartments with two of her clients, a gay couple in their 30s. After the pair looked at about 50 units, they thought they struck gold with a $6.8 million co-op in Chelsea – until the board turned them down.

“It definitely wasn’t because they didn’t have the financial wherewithal,” Berkin says. “They could have bought out the entire building.” She says she’d been warned by the listing agent that the seller, also gay, was known to throw loud parties that upset the neighbors. Even after Berkin’s clients offered to pay for the $250,000 lobby renovation, the board refused to budge.

“Did they get turned down because they were gay?” Berkin asks. “Maybe. Probably, in my opinion.” But there was no way to prove it, and since the board wasn’t required to explain its rejection, Berkin’s clients had little recourse. They went shopping elsewhere.

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In one sensational discrimination case covered extensively by Habitat a quarter century ago, an interracial couple, Shannon and Gregory Broome, sued the co-op board of the Beekman Hill House, at 425 E. 51st Street, after being turned down for a sublet. During the interview, court documents revealed, board president Nick Biondi scrawled “black man” on a notepad. A jury awarded the couple $640,000 in damages and found Biondi personally liable for $124,000.

Biondi gave up his apartment and moved to Long Island, where he died in 2018. On his blog he described himself as “a successful businessman, family man and community leader who nearly lost it all – just for being a ‘good neighbor.’”

For years, the influential co-op lobby has successfully stymied efforts by advocates and lawmakers to make the purchase process more transparent, even as Westchester, Suffolk and Nassau counties have adopted such measures. Opponents argue that discrimination is rare and these laws amount to government overreach that could unleash a torrent of lawsuits from rejected buyers. The laws, they contend, are a solution in search of a problem.

Now, a national reckoning around race and social justice has brought the issue back to the fore, bolstered by a progressive shift in New York politics. That’s giving momentum to the co-op disclosure bills pending in Albany. So despite failing to get previous iterations of the bill through the legislature, its sponsor, Sen. Brian Kavanagh, is hopeful that increased attention on fair-housing issues this year will make the difference. “It’s been a long road,” Kavanagh says. “The co-op boards and their representatives have been pretty well organized and really have resisted.”

Those lobbying against proposed changes include the Westchester-based Building & Realty Institute and the Council of New York Cooperatives & Condominiums (CNYC), which counts more than 2,300 buildings as members. Mary Ann Rothman, the CNYC’s executive director, summed up the group’s stance succinctly: “We feel co-ops have functioned very, very nicely for a very, very long time without this sort of government imposition.”