As the legislature in Albany and the New York City Council are in full swing, legislation of every type is being proposed, debated, and considered. As one might expect, the budget is front and center in these recessionary times, but housing-related bills—both those specifically targeting condos and co-ops and those dealing with multifamily housing—are also a hot topic, as always. Keeping up with pending legislation and court cases can be a lot of work, but it’s incumbent upon boards and managing agents to stay abreast of changes in the law in order to administer their building communities.
Up in Albany
In the state Assembly, bills dealing with housing usually go through the Housing Committee, but often go through others, such as the Ways and Means, Judiciary and Government Operations committees.
Large numbers of housing-related bills are introduced in Albany every year. Melissa Mansfield, spokeswoman for Assembly Speaker Sheldon Silver, provided us with a list of 18 current bills dealing with housing cooperatives. They range from Assembly Bill A03553, which would require co-op boards to act on applications from prospective buyers within 45 days, to A00871, which would create a separate part in Housing Court to deal with condos and co-ops; to A01211, a version of the controversial “written rejection bill” that would require co-op boards to give applicants reasons in writing for why their application is rejected; to A08636, which would provide an income tax deduction for “monies deposited into a house, townhouse, condominium or unit in a cooperative housing corporation account.”
One bill, A05252, relating to provisions dealing with the conversion of rental buildings to condos or co-ops, seems somewhat pre-recession in its thinking; nowadays, it’s often the other way around. Also, some bills deal mainly with specific locations, such as the city of Yonkers, or specific classes of people, such as seniors.
Among the key players in the Assembly as far as housing is concerned, by the way, are, of course, Speaker Silver and Housing Chair Vito Lopez. In addition to these two, Assemblywoman Linda Rosenthal chairs the subcommittee on Mitchell-Lama, and Assemblyman Marc Alessi has been active on bills to protect mobile home park tenants. Assemblymen Keith Wright and Jonathan Bing previously chaired the subcommittee on Mitchell-Lama.
Housing-related language figures largely in the Assembly’s 2010-11 budget proposal. Most of the material has little relation to co-ops or condos. However, one of the items that is proposed is the “elimination of the foreclosure prevention program,” a measure some feel may be rather unpopular with many people throughout the state.
Another idea that has been talked about for quite some time is that of a condo or co-op owners’ “Bill of Rights.” Assemblyman Lopez has introduced such a bill A04946, and the bill has also been introduced in the state Senate under the title S05088. While these measures have a certain amount of support, many in co-op/condo organizations disagree, arguing that condos and co-ops are regulated by their own bylaws, that each building’s bylaws are different, and that these bylaws often change, making overarching regulation impractical and unenforceable.
The City Council
According to Anthony Hogrebe, spokesman for City Council Speaker Christine Quinn, recent legislation that has gone through the Council’s Housing and Buildings Committee includes a package of legislation governing building demolition, and a bill that helps incentivize owners of stalled construction sites to prevent them from falling into disrepair.
The latter, which has been covered in the past by The Cooperator, definitely applies to new condos, since so many stalled construction projects are condo buildings.
Still, a search of the City Council’s website for “housing” doesn’t reveal that many bills dealing with condos and co-ops. One, resolution 0009-2010, recommends a new “Mitchell Lama-type program” to construct buildings on vacant lots, but doesn’t specify whether these buildings would be rentals, co-ops or condos.
Councilman Lew Fidler, D-46, representing Southeast Brooklyn, has introduced a bill that is similar in some respects to then-Councilman Hiram Monserrate’s 2006 “written rejection bill,” which would have obligated co-op boards to give applicants concrete reasons for rejection, in writing. Fidler, who sits on the Housing Committee, points out that even though buildings are already forbidden to discriminate on the basis of race, ethnicity, religion or disability, “There has long been a suspicion that some co-op boards do discriminate, so I have a bill that will formalize the application process for co-ops [with the same form] so that a person of one ethnic background doesn’t get one application, and a person of another background doesn’t get a different application. The board must certify that any denial was not done for a discriminatory reason.”
“Suffolk County,” he continues, “passed a bill that was similar and actually specified that the board give the reason for denial, but I think that was unnecessarily personal.”
Al Pennisi, president of the Federation of New York Housing Cooperatives & Condominiums (FNYHC), comments, “We have civil rights laws in New York, and have had them for many years. If an applicant is turned down and feels he is discriminated against, he can file a complaint with the Civil Rights Commission and they will have to explain why they did so, if you’re talking about race, creed, color, national origin, marital status or disability.Co-ops feel they have the right to make a decision about who shares their building, shares their elevators, shares their common areas. The statutes do protect the buyers.”
As for other city legislation, Fidler says, “There are always people who introduced bills that pets be [always] allowed for certain groups of people. I don’t see it going anywhere.” Such bills have often tried to specify seniors with pets as a “protected” group. Of course, some developments approve pets, others prohibit them.
EPA Lead Paint Rule
One of the matters currently vexing many property managers and boards is neither state nor city in origin, but federal. Beginning in April, EPA regulations have required that contractors who perform renovation, repair and painting projects “that disturb more than six square feet of paint in homes, child care facilities and schools built before 1978” must be certified and specially trained. “Rule 40 CFR, Part 745” is designed to deal with lead paint.
The Federation believes that many managers and boards were totally unaware of the new regulation, which is characterized as dealing more with lead dust (since the paint turns to dust during construction and renovation) than paint per se. So, many contractors are scrambling to get the proper training.
Margie Russell, executive director of the New York Association of Realty Managers (NYARM) adds that the city already has its own tough rules about working in buildings with lead paint (the Lead Paint Hazard Reduction Law), so that contractors will now have to be familiar with, and certified for, both, as well as OSHA laws.
Making Their Wishes Known
Organizations such as FNYHC, NYARM, the Real Estate Board of New York (REBNY) and the Council of New York Cooperatives & Condominiums (CNYC), being membership organizations, all make their wishes known in Albany and in the New York City Council, though each group advocates in different ways.
FNYHC, for example, says that it doesn’t lobby—but it does advocate. On the other hand, REBNY does lobby, according to Mike Slattery, its senior vice president.
What’s the difference? According to the New York State Lobbying Act, actively trying to influence the vote of an elected official is considered lobbying, while preparing newspaper or magazine articles, responding to requests for comments, or participating as a witness in a public proceeding is not lobbying. The act further specifies that a lobbyist is “every person or organization retained, employed or designated by any client to engage in lobbying” and that spends, or even anticipates spending, $5,000 during the year for lobbying activities.
What are some legislative items that the organizations concerned about? Slattery, for example, is opposed to an item in Governor David Paterson’s initial budget that would make co-ops subject to taxes on mortgages. In the past, they, unlike condos, have been exempt from such a tax. Opponents of such a provision point out that cooperators don’t own real estate, they own shares, and that this would further tax cooperators in a time of economic recession.
Slattery would like a renewal of the 421-a exemption program, which grants a partial tax exemption to developers of new construction for a period of 10, 15 or 25 years. Although the exemption is for new construction, unit owners in buildings with such an exemption could see their maintenance or common charges zoom up when the exemption ends.
NYARM also is not a lobbyist, says Russell. Rather, its efforts are toward training managers how to deal with new laws and regulations that have already been passed.
However, one item that has been introduced from time to time—to establish licensing for property managers—has been actively supported by NYARM, both in the City Council and in Albany. Such a bill, she said, would not only improve the reputation and professionalism of property managers, but would contribute to public safety by making sure that managers recognize unsafe conditions when they see them.
What about lobbying in the City Council? Hogrebe says that “over the past few years, the Council has passed landmark legislation severely limiting the influence of lobbyists in New York City.” One of these bills, for example, mandates that lobbyists’ fundraising or consulting activities be made available to the public in electronic form.
For his part, Councilman Fidler says, “I deal with them respectfully, recognizing that they have a job to do but also that they have an axe to grind. Sometimes they give me helpful information, sometimes biased information that requires people to ask more.”
Attitude of Upstate Legislators
What is the attitude among state legislators in Albany toward co-op and condo legislation? After all, single-family homes are the predominant form of housing in the state. Co-ops are basically a New York City phenomenon. And although condos are more and more widespread, in many parts of the state, condo residents are presumed to be either retirees or young families waiting for the time they can buy a single-family home.
But even when you’re dealing with legislators from, say, Onondaga or Broome County, their colleagues from downstate make sure to inform them about the issues. Also, they may defer to their colleagues on local issues as long as these downstate colleagues vote with them on their issues.
Pennisi comments, “We meet with legislators who represents communities where there are not too many cooperatives through the Federation. They listen if we have something to say.”
Impact of the Recession
One factor that is influencing housing-related legislation today, whether it’s in the state legislature or the City Council, is, of course, the economic recession.
Many co-ops and condos are running into problems simply because some of their shareholders or owners are in arrears, whether because they lost their jobs or for other reason. Also, says Pennisi, boards are very sensitive on spending money on projects because they don’t want to spend down their reserve funds.
Slattery adds that in his estimation, controlling spending in Albany, reducing the state budget and reducing taxes are the most important items on the agenda. “We have to create a climate that would encourage sales, encourage buyers to purchase homes.”
Mansfield, a spokesperson for Speaker Silver, says, “Especially during these difficult economic times, the Assembly majority has continued to fight to protect tenants and homeowners throughout the state. While the financial downturn has been especially hard on working families, we remain committed to helping all New Yorkers access safe, affordable housing.”
Speaking about the city, Fidler said that in today’s economic climate, “the city is very careful not to take actions that unnecessarily cost money. That’s the first thing that people ask about. In the area of housing, we are making sure that affordability is emphasized whenever a benefit is being provided.”
One recent program proposed by Speaker Quinn, says Hogrebe, is the Housing Asset Renewal Program, or HARP. Through this program, HPD is currently evaluating proposals from developers and property owners who have had a difficult time filling units or finishing construction after the burst of the housing bubble. In exchange for agreeing to make a percentage of units affordable for working New Yorkers, the city can offer moderate subsidies that will help make these price corrections more financially viable.
Ranaan Geberer is an editor and freelance writer living in New York City.