Action in Albany and Manhattan A Legislative Update

Action in Albany and Manhattan

As the legislative session in Albany winds down, with the Legislature passing the budget on time for the first time in two decades and the City Council continuing with its business, now is a good time to take a look at some of the housing-related legislation our elected officials considered during the year.

The roughly $106 billion state budget includes provisions for nearly $1 billion in new taxes and fees, including increases in automobile title fees, sales tax surcharges and increased mortgage recording taxes on certain residents.

An Overview

It is also important to look behind the scenes at some of the organizations representing different sectors of the housing world--co-op and condo owners, landlords, tenants and so on--and how they affect the legislative process.

In Albany, not all housing-related bills go through the Housing Committees in the Assembly and Senate, says Jonathan Harkavy, chief of staff for Assemblyman Vito Lopez (D-Brooklyn), who chairs the state Assembly Committee on Housing. Co-op and condo-related legislation sometimes goes through the Judiciary Committees. At any rate, he says, "We don't get a lot of stuff related to condos and co-ops--as long as their boards are working fairly."

For example, says Harkavy, several bills have been proposed to preserve buildings in the Mitchell-Lama program. (A related City Council resolution, No. 388-A, which called upon the state Legislature to extend the tax exemption on these properties from 20 to 50 years, passed last January.)

However, they mainly would affect Mitchell-Lama rental buildings, where landlords now have the right to "buy out" of the program after 20 years -- a move that often leaves rental tenants without a place to live as their rents skyrocket to market rates. In Mitchell-Lama co-ops, the boards have to vote on any such change in status, thus giving the co-op owners more protection.

Going back to last year, observers applaud the fact that the tax abatement program for condo and co-op owners program was extended for four years, a measure of great importance.

"We consider that resident homeowners of co-ops and condos are homeowners and should have the protection and privileges that one-, two- and three-family homeowners receive," said Mary Ann Rothman, executive director of the Council of New York Cooperatives and Condominiums (CNYC). Until the 1996 co-op and condo tax law, she said, "co-ops and condos were assessed the same way as rental properties."

Some bills in Albany impact co-ops and condos because they affect apartment houses in general. "Someone has given us a bill requiring fire extinguishers in every apartment," says Harkavy. "One of the associations is looking to see if it's reasonable--who's going to responsible? Will it be the co-op board, or will it be each individual tenant?"

When talking about state Legislature, by the way, one must remember that because the Assembly is Democratic and the Senate is Republican, many bills pass the Assembly year after year, only to get shot down in the Senate.

Taking it to the House

There are a bevy of housing related bills under consideration by the Assembly, many of which have been repeatedly proposed year after year, only to die after failing to gain a consensus. Bills (see

sidebar story) have been proposed to require applications to purchase a co-op or condo to be acted upon within 45 days, or else that would result in an automatic approval. A companion bill would require cooperative housing corporations to provide prospective purchasers with a written statement of reasons if the purchaser's application is denied. Another proposal would prohibit landlords from evicting tenant/shareholders if they refuse to purchase their co-op or condo unit after a buyout. Another bill seeks to create a special subpart of the housing court exclusively to handle cases involving co-ops and condominiums. And another bill proposes to amend the real estate tax code to reclassify co-ops and condos as Class 1 property--the same as single-family homes are categorized. There are bills relating to special assessments, filing of liens, property disclosures in reference to hazards and mold contamination, and even, a bill permitting residents 62 years of age and older to keep companion pets. Another bill which the New York Association of Realty Managers (NYARM), and the Federation of New York Housing Cooperatives and Condominiums (FNYHC) is following closely is a measure calling for the licensing of building managers of multiple dwellings. According to NYARM executive director Margie Russell, that proposal would certainly garner their support and they are monitoring its movement through the Assembly.

Rezoning Efforts

As far as the city legislative process is concerned, among the most important housing-related measures, according to Michael Slattery, senior vice president of the Real Estate Board of New York (REBNY), are two affecting development in specific neighborhoods. In such cases, condos would surely be included, but would be part of a mix with office towers and other types of buildings.

These are the proposed, well-publicized rezoning of West Chelsea in Manhattan and of the Greenpoint-Williamsburg waterfront in Brooklyn. They are not bills per se, but "land use items" that have to work their way through the city's Uniform Land Use Review Process (ULURP)--from the community boards to the borough president's office to the City Planning Commission, and finally to the City Council and the mayor.

The Greenpoint-Williamsburg waterfront rezoning bill would impact 84 blocks of both waterfront and upland--formerly a manufacturing zone--by permitting new housing and more parkland along the waterfront. It would encourage affordable housing by giving developers a bonus of adding more floor area for every unit of affordable housing they build.

The City Council on May 11 voted to approve the mayor's rezoning plan, which had been ardently opposed by many local Brooklyn officials and local groups in Williamsburg, who want more guaranteed affordable housing. "This plan protects the fabric of the inland neighborhoods, preserving their mixed use character, preventing noxious, heavy industrial uses and further out-of-scale development," praised Mayor Bloomberg after the council's action. "The plan will result in the creation of 11,000 construction jobs and over 600 permanent jobs over the next 10 years."

The West Chelsea rezoning would cover the area west of 10th Avenue. It would change parts of the area's designation from manufacturing to encourage residential and commercial development, and would acquire the High Line, a long-unused elevated freight line, to facilitate its reuse as open space.

This bill was recently reviewed by the City Planning Commission, according to CPC spokesperson Rachaele Raynoff, and is scheduled to be before the City Council sometime this month. Both proposals are sponsored by the administration.

Input from Housing Groups

When considering housing issues, both city and state legislators pay attention to constituent groups such as the aforementioned REBNY and CNYC and the Federation.

"We seek their advice on issues--they have a certain perspective," says Harkavy of Assemblyman Lopez's staff. "It's impossible for us to go to every co-op owner or every renter. One of these organizations is usually there at hearings, depending upon the issue.

"We would ask them for feedback [on new bills], just the same way we'd listen if a citizen said, "I read this bill and it's not going to protect my apartment!"

Speaking for the CNYC, Rothman says, "We are advocates of the needs of our constituents. We make certain that the lawmakers receive our newsletter. We meet with [the lawmakers] ourselves, and we remind our members to know the lawmakers for their own districts."

When a bill is introduced that the organization takes an interest in, whether positive or negative, the group contacts its members. "They then get in touch with their representatives and tell them why they feel strongly about the particular bill," she says.

Not Just Upstate-Downstate

Are most lawmakers north of, say, Yonkers indifferent to condo or co-op-related legislation? After all, a town like Binghamton has a much smaller percentage of such housing than the Big Apple.

The answer to this question is, "not necessarily." As Rothman reminds us, "It's not only New York City that has co-ops and condos. There are growing numbers of them throughout the state, sometimes vacation homes. Outside the city, more often than not, condos and co-ops are `starter homes.'"

This means, of course, that a young couple may move into a condo, but once their family starts to grow, they look to move into a single-family house because they need more room.

Harkavy also thinks condos and co-ops are "more of an urban issue, not Upstate-Downstate. You'll see them in Rochester, in Buffalo also." When some municipalities run out of land, he says, it is easier to build multiple dwellings--which nowadays usually means co-ops and condos.

Closer to home, he says, "Nassau and Suffolk have no real undeveloped land left, so the developers take advantages of what opportunities there are by building condos and co-ops."

What Legislation They're Tracking

In Albany, the real estate and owners' associations, as well as Legislature-watchers, are following several initiatives--some of which haven't even been introduced yet.

Harkavy says the city's tough new lead paint law has inspired similar efforts in the Legislature. Assemblyman David Gantt of Rochester has introduced such a measure (A04201). The bill establishes tax credits and a loan fund to help property owners; requires registration of affected properties; provides standards for accreditation inspections; and calls for the appointment of a deputy commissioner to oversee lead-safe provisions.

Harkavy says "The amendments are still being worked on," but adds that "this will be a major issue in the next few years."

Ralph Perfetto, head of the Brooklyn Co-op and Condo Coalition, says his organization is concerned with the practices of some aggressive management companies that "Take over a building, install their own fee increases and take over responsibilities that belong to the boards." His group is now gathering information, and plans to request a bill to remedy the situation.

Perfetto would also like to see legislation that would protect co-op and condo owners from sponsors who "over-mortgage" the building and default. In these cases, he says, "The bank takes over the building, and the shareholders become tenants."

Rothman also mentions several existing measures, both in Albany and in the City Council. As far as the Legislature is concerned, she mentions a bill introduced by Westchester's Assemblyman Richard Brodsky (A5162) that would fine co-ops that don't distribute the STAR property tax exemption applications. "His bill goes very far in punishing [boards and buildings]. It would authorize shareholders to withhold maintenance. That's going down a dangerous and slippery slope," she says.

Turning to the City Council, Rothman criticizes as "ill-advised" the "Plaza Hotel bill," introduced in March, that would prevent hotels from converting more than 20 percent of their rooms to condominiums. She also criticizes a bill known as Intro 189-A introduced by Councilwoman Melinda Katz, that would legalize "successor pets"--meaning that once apartment building management or the board waives the no-pet clause in a lease, the tenant can replace a pet who has died, or is no longer in the apartment, with another pet.

"Lots of people choose to live in pet-friendly buildings; other like buildings that have a no-pet policy," she says. "It seems wrong to reward someone for sneaking in a pet."

The New Budget: Not Just Housing

With the new state budget on the table, Harkavy of Assemblyman Lopez's staff says that among its most important aspects is allocating funding to the Department of Housing and Community Renewal (DHRC).

"They didn't eliminate any positions, but with a state hiring freeze, they didn't add any either," he says. "If a lead paint inspector leaves, they'll replace him the next day, but if a secretary leaves, they'll wait a while."

Brian Franke, a spokesperson for state Assembly Speaker Sheldon Silver, points out that the budget includes $24 million in the housing capital program, including $10 million for the DHCR's Housing Trust Fund, and $10 million for the New York State Affordable Housing Corporation (AHC), a subsidiary of the New York State Housing Finance Agency (HFA). In addition, he says, the budget continues to make low-cost financing available, through the Housing Finance Authority and the State of New York Mortgage Agency.

More Concerns

But housing isn't the only budget concern of real estate, housing, and co-op and condo groups. When asked about the budget, Slattery of REBNY says, surprisingly, that the group is mainly focused on how to fund the MTA's five-year capital plan, which just goes to show that when it comes to the city's housing situation, no consideration is too far afield for lawmakers--transportation, services, education, and the job market all directly or indirectly impact housing in the city.

"The mass transit system is the lifeblood for the city, bringing residents to and from their jobs," he explained. For property owners, this becomes a valuable consideration."

Raanan Geberer is a freelance writer living in New York City.

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