Bill Would Give Abatement to Unit-Owners in Land-Lease Condos
Battery Park City, where owners rent the land beneath their buildings.
March 8, 2024 — Affordability is the goal for condo unit-owners in Battery Park City.
Affordable housing may remain one of this city's most elusive dreams, but a bill now before the state Legislature would boost affordability for low- to middle-income condo unit-owners and renters in Lower Manhattan's Battery Park City neighborhood.
The bill, sponsored by Sen. Brian Kavanagh and Assembly member Charles Fall, seeks to defray housing costs for both unit-owners and renters by requiring the Battery Park City Authority (BPCA) to offer them a partial rebate on the portion of their housing costs equal to the percentage that is remitted to the Authority as ground rent, The Broadsheet reports.
The bill springs from the unusual nature of property ownership in Battery Park City. Homeowners, landlords, and developers do not own the land their buildings occupy, but instead lease the space (currently through June 2069) from the BPCA in exchange for yearly payments of ground rent. (The Authority also collects so-called “payments in lieu of taxes,” or PILOT.) The bill now under consideration in Albany would exempt low- to middle-income condo owners and renters from future ground-rent increases above the current baseline.
The bill would establish reductions in payments for both condo unit-owners and rental tenants who earn less 150% of a federal benchmark known as Area Median Income. This threshold is currently set at $148,350 for a one-person household and ranges up to $245,700 for a household of six people.
Community Board 1 has passed a resolution giving its ringing support to the bill. It reads: “CB1 urges the Senate and Assembly to pass this legislation and urges Gov. Hochul to sign it into law as soon as the bill is presented.”
U.S. Census data indicates that residents of about 740 condo units and 1,400 rental apartments in Battery Park City would meet the AMI threshold proposed in the bill.
While rare in New York City, land leases are not confined to Battery Park City. They are common on Roosevelt Island and are scattered through all five boroughs, in co-ops as well as condo and rental properties. In one monumental case, negotiators worked for a decade on the sale of the land beneath nine Bay Terrace Co-ops in Bayside, Queens, which have almost 2,000 units.
Judy Valente, a member of one of the Bay Terrace co-op boards, told Habitat that the 99-year land lease had been a "dark cloud" hanging over the co-ops.
While the Battery Park City abatement bill won't end the neighborhood's land leases, it will help thousands of New Yorkers realize one of this city's most elusive dreams.