6 thoughts on “CityViews: The Case for New Regs for the City’s Affordable Co-ops

  1. They should stop the process where trust fund kids have their parents turn these units into mini illegal hotels or allow them to be turned into boarding houses.
    That said, the lawbiding, decent shareholders who are 99% percent of those effected shouldn’t be penalized. Monitors and managers culled from the real estate industry won’t fix this problem. The city should inspect these buildings from time to time to find out if the tenants have been approved and that the boards abide by the rules. The HDFC laws say nothing about “roommates” or boarders and this is the only thing that needs to be fixed. HPD is using this to try to boost DeBlasio’s numbers for low income housing while the real estate sharks are salivating over these units.
    Don’t punish those of us who are doing the right thing.

  2. UHAB seems to have morphed over the years from an organization that helps HDFCs to an organization that profits from HDFCs. When we asked UHAB for help obtaining an 8-A loan from the city. They offered to prepare the documentation for a fee of $40,000. We did it ourselves in two days. Repeated requests for assistance with co-op governance issues and with energy-saving measures were met with either no action, or free introductory sessions that urged us to sign up with expensive consultants.

    Apparently, UHAB recently lost its HPD contract for reasons that have not been made clear. No wonder it is seeking a new mission.

  3. Andrew Reicher’s article has a lot of misinformation and distortions. He can reach out to the HDFC Steering committee to get some facts to comment on. Sylvia Tyler

  4. UHAB is not a friend of HDFCs nor affordable housing. They are in bed with the DeBlasio administration and talk the talk, but can’t walk the walk.

  5. Fallacies in City Limits article

    http://citylimits.org/2017/03/21/cityviews-the-case-for-new-regs-for-the-citys-affordable-co-ops/

    This article wrote by Andrew Reicher the executive director of the UHAB Urban Homesteading Assistance Board and a part that have conflict of interest with this agreement, (if the agreement is singed UHAB will sign also contracts as monitors) have so many fallacies:

    I. False For decades, Housing Development Fund Corporation (HDFC) co-ops have been providing affordable homeownership opportunities for low-income families across New York City.
    Truth These buildings already existed with different incomes
    They were abandoned by landlords, banks, and the City, which sold them to tenants who represented a range of incomes and classes (middle, lower-middle, low) and who, as owners, saved their buildings to sweat equity and sound management. Income restrictions apply to new buyers in HDFCs.
    “HDFCs are affordable housing, not low-income housing: Many or most HDFCs have income restrictions at 120% to 165% AMI ($108,720 to $149,490/year-family of four), which is moderate- to middle-income affordable housing. HDFCs are formerly abandoned buildings that often still need expensive repairs that must be paid for by the shareholders. Price caps & lower AMI levels threaten financial viability.” (John McBride)

    II. False “Eligible for special tax abatements and government grants”…
    Truth These buildings already have a tax exemption they are not elegible.

    III. False “To tackle these challenges, the city has proposed a deeper property tax break for
    Truth These buildings already have a tax exemption. HPD by proposing this agreement is Breaking a contract with HDFCs
    The City has a contract with HDFCs including — the DAMP tax exemption — which lasts until 2029. Thousands of HDFC shareholders bought their property knowing this exemption was in place until 2029. The Mayor and HPD wish to break that contract and offer one that has a slew of stunningly punitive regulations attached, including unheard-of sales caps. It’s as if HPD said, “First we break the contract, then we break their backs!”

    IV. False “The future of this housing stock is in jeopardy”
    Truth HPD There is no a problem that needs to be solved, except for distressed HDFCs this is a fake problem dreamed up by HPD. We can’t buy into their loaded language. That’s why we should NOT use the word “solution.”

    V. False ” Apartments in some HDFCs are beginning to sell for market-like prices, ”
    Truth ” HDFC sales prices are affordable: HDFC apartments not only sell for less than market rate, they typically sell for less than the maximum price that buyers within allowable AMI levels could afford without additional assets. In 2011-2015, 32% of HDFC apts. sold at less than $100,000 & 75% sold for less than $326,000, with a median price of $270,000 vs. market-rate $760,000 (NYC) and $1,209,500 Manhattan (John McBride)”

    VI False “The future of this housing stock is in jeopardy”
    Truth HPD There is no a problem that needs to be solved, except for distressed HDFCs this is a fake problem dreamed up by HPD. We can’t buy into their loaded language. That’s why we should NOT use the word “solution.”

    VII. False “opportunities for low-income families across New York City”
    Truth Affordability for life is the HDFC goal, not low sales prices
    Indeed, HDFCs count on high flip-tax income from rising sales prices; this income pays for capital improvements and upkeep, and holds maintenance low for everyone.

    VIII. False ” some shareholders have felt left out of the process of creating it”
    Truth Shareholders (with the exception of those in agreement with UHAB ideology) have been left out of the agreement. The agreement was discussed not with shareholders but with Not-For-Profits who have a (thir party interest) in the agreement.
    Only submissive shareholders (as the one in the picture) who were willing to follow the agenda of UHAB were allow to take part of the proposal
    The agreement was drafted by J.C. who works at UHAB and discussed by the (The Task Force). The Task Force on HDFC’s membership is primarily made up of organizations that receive funds to develop, manage and service affordable housing in New York City, along with representation from the offices of some elected officials. As of September 2016, such organizations include ANHD, Brooklyn Law School Corporate & Real Estate Clinic, Brooklyn Legal Services Corp A, Cooper Square Committee, Council Member Torres’ Office, Goldstein Hall PLLC, The Housing Partnership, The Legal Aid Society (Harlem Community Law Office), Manhattan Borough President’s Office, RAIN Community Land Trust, Urban Homesteading Assistance Board (UHAB), and the Urban Justice Center.)

    IX. False ” Many (HDFC) are already under the kind of regulation that the city hopes to implement across the board, and the success rate of these cooperatives is high”

    Truth The only buildings that have regulatory agreements with the city are those who have financial or construction problems and need a loan, these are not doing well, because different from the rest were not self sufficient. 207 Coops that received loans from the City have additional regulatory agreements and oversight by the City.
    1,048 Coops in HPD’s Portfolio with a total of ~30,000 apartments
    A great majority (~75%) in good financial health with no oversight, nor assistance from the City
    A minority (~25%) in financial distress (defined by The City criteria of having a debt over $3,000 per unit)

    X. False “Most affordable housing that receives government subsidies operates under a regulatory agreement to ensure that the residents, the community, and taxpayers all benefit. ”

    Truth Regulatory agreement are proposed only in exchange for goods, but there is no benefit offered in this agreement
    The government grants give money and in exchange put regulation on you. And that there are no precedents for signing a regulation (giving you nothing) just to keep tax exemptions. In this case, the government takes something away from you and you have to sign a regulation just to get it back. There is something forceful about having to sign an agreement to keep what one has. This is an inversion of procedure: taking the exemption away is a way to force into regulation.

    This agreement is written from a negative perspective, starts by taking something away not by giving something. Preserving implies time and care, and this agreement is being rushed into place. The frame of the agreement is forceful: the threat of deleting the existing tax exemption (valid until 2029) will force into regulation: sign or sale. The agreement is a form of “moving”.

    XI. False ” Among the most controversial elements of the proposed new regulatory agreement is the price caps on HDFC co-op re-sales. Some shareholders ask, “Why shouldn’t I be allowed to get market value for my apartment when I move out?
    Truth The most controversial element of the proposed new regulatory agreement is Autonomy, as it is now buildings have the choice depending of their situation to cap or not cap prices. We are not against cap prices we are against the city putting cap flat prices on all of us.
    HDFCs, have the choice to regulate the following:
    -To cap sale prices or not to cap sale prices
    -Flip tax percentage
    -To lower an AMI that can fluctuate under a 165% limit
    In our by-laws there is no mandatory:
    -Sale Price
    -Assets restrictions
    -Primary residency is 183 days per year as in federal laws and rent-stabilized apartments. Primary residency is 2 years every 4 as in rent-stabilized apartments

    XII False Monitoring has proven to be a useful and proactive way for affordable housing nonprofits to work with HDFCs to help their boards and other shareholders… while 27 percent of unmonitored and unregulated HDFC co-ops are in financial distress.

    Truth The UHAB has applied to be the monitor and get paid. The whole existence of UHAB is dependent of having monitors. The buildings that have monitors now are those in distress and ask a loan to the city with came with a monitor. There is no proof that monitored buildings functioned better. I have been into many UHAB meetings where shareholder complains the monitors do nothing. And how can they no enforcement or oversight capacity. The monitors now don´t have the right to approve sales. But the monitors in the new proposed regulatory agreement have capacity to approve sale, same name two different functions.

    XIII False HPD is Helping HDFCs
    Truth HPD is Punishing HDFCs
    HPD’s proposal will not help distressed buildings or improve everyday governance. This proposal interferes with privacy, creates bureaucracy, and fiscally punishes successful HDFCs, yet doesn’t address gaps in existing regulations and offers no tools to help to resolve problems in buildings that struggle. Our
    owner’s rights are revoked by this proposal, leaving us only with the rights of tenants.

    XIV. False ” Preserving Affordable Home Ownership”
    Truth HPD is Moving Affordability
    HPD’s strategy is not about “preserving” but about “moving” — moving us out and bringing others in. Maintenance will go up and force lower-income shareholders to leave the city, thus making their apart-ments available. These new units will be counted as new “affordable housing units.” (The “units” will change hands, no new units will be built.) Elections are coming up and Mayor de Blasio’s administration, so far unable to fulfill its promise of 200,000 affordable housing units, will add ours to his count.

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