City to Co-ops: Sign on the Dotted Line...Or Else

In the April issue of Habitat we’ll dissect one of New York City’s hottest political issues. As part of Mayor Bill de Blasio’s promise to protect and create 200,000 units  of affordable housing, the city wants 30,000 formerly derelict apartments that have been turned into affordable co-ops under the Housing Development Fund Corporation (HDFC) to sign a new Regulatory Agreement. But many healthy HDFC co-op shareholders are furious about the terms of the agreement, especially its low ceiling on sale prices, its requirement that co-ops hire professional management companies, and its imposition of city-chosen monitors that the co-ops would have to pay for. As a carrot and stick, the city would terminate tax breaks for co-ops that refuse to sign on, while improving tax breaks for those that agree to sign.

The New York Post reports that Joseph Center, the former associate director of the nonprofit Urban Homesteading Assistance Board (UHAB), says the proposed Regulatory Agreement includes oversight rules he proposed more than a decade ago. “It...is an updated and somewhat changed version of what I did,” says Center, who left UHAB in 2005.

UHAB, which has been instrumental in helping convert derelict buildings into functioning co-ops, has said it will apply for monitoring contracts, which would cost each co-op between $3,500 and $7,500 a year. This has led critics to charge that UHAB has a “vested interest” in seeing the Regulatory Agreement win the approval of the City Council.

UHAB is part of the HDFC Task Force, which has been pushing for greater oversight of HDFC co-ops. While some 27 percent of HDFCs are in bad physical shape and in arrears on taxes and water bills, according to the city, other HDFC apartments have sold for more than $1 million. Critics say attempts to rectify problems with these “outliers” would punish the majority of healthy HDFC co-ops. Get the full story in the April issue of Habitat.