11 thoughts on “City Pushes to Regulate Low-Income Coops Amid Some Shareholders’ Opposition

  1. As an HDFC shareholder who has attended a number of public meetings on this issue, I can report that I have not heard of a single HDFC that would consider signing on to this agreement as it is. Therefore, rather than preserving affordable housing, under this proposal HDFCs that don’t agree to these ruinous provisions will be left in a kind of limbo, with no real incentive to maintain the homes as affordable. Most HDFCs are committed to their mission and would likely continue as before, but market forces might eventually prevail. The city must stick to its original agreements with HDFCs: leave the DAMP tax cap as it is, and only intervene in cases where HDFCs are in trouble. This proposal would hurt thousands of low- and middle-income New York homeowners who bought their units in good faith, and do the most damage to the most vulnerable existing homeowners.

  2. It is important to note that there are major problems with forcing these buildings to pay for monitors and managers, many of whom have proven to be bad managers, and some, dishonest ones. There is no HPD staff to hold managers accountable and no way for HDFCs to protect themselves from bad management other than paying for lawyers, an added expense. My HDFC has fired four managing companies over the the last several years and in the end managing the building ourselves was healthier for us. Also note that UHAB is not a disinterested party, since they would be one of those managers and/or monitors. Having lost a long term contract with the city last year, they need this proposal to go through. The fact is that the vast majority of HDFC apartments have not sold. Original shareholders who have put in 30 years of more of sweat equity in their apartments and coops are forced by this proposal to turn over that equity to new buyers.

  3. I live in an HDFC Co-op for 30 years. Our story is compelling. There were no floors, no roof, and no systems. The building had a giant X on it as condemned. We replaced over 30 wood beems , the steel , electric , plumbing, everything . Took us over three years to make habitable. Then police raids mistakenly raided my apartment with my infant son in my hands instead of the correct address of crack dealers next door. The police department apologized and I accepted.
    Mayor de Blasio had been a wonderful mayor on many issues. Rent stabilization is now only 1% a year for the past 2 years, free after school for all middle school students, Pre K for all , ending stop and frisk the list goes on . Yet, this proposal is far too complicated and will never reach its goal. It will have unintended consequences of actually hurting home ownership and stable communities. The HDFC residents who this is targeted are actually the back bone of many communities.
    The best way to do affordable housing is to reenergize the Mitchell Lama program. The former administration ended much of it. Time to build not take away hard fought efforts of working New Yorkers. Take this proposal off the table and rework it for a new generation.

  4. At the end of the day… for those who are designated “poor” “low income” etc. are not considered as equal members of “society”. The desires of the elitists plutocrats, aristocrats, reign supreme. In the name of “affordable housing” concepts and definitions such as low income, poor, poverty, disadvantaged, have been taken out of the lexicon. It is evident that in general society is ruled by sociopaths and psychopaths with various degrees of greed and need for power and control. Its the same generation of BS from generation to generation. How much can achieved with the ends justifying the means is the hallmark of the cultural thesis which lies at the core of America’s claim to being a democratic society. At the end of the day, greed vs. need. America is good at pointing the finger at the short comings of other nations, societies in the world…. It is time for America to look at itself… To be concise.. if we lived in a society which is base on justice, equality, and freedom….This article would not have been published….

    • I stumbled upon this article, and I’m surprised. I organized the building at 86 W 119th Street for four years while we went through rehab, unit sales, and co-op conversion. My comments are less about the very necessary conversation regarding resale restrictions, HDFC monitors, (lack of / too much) City support, wealth creation, politics, etc etc., and more about the way this property was presented as a case study. If it was meant to illustrate this topic, in my opinion, it was poorly chosen and presented.

      I believe it’s important to root this conversation in specific and correct information. Pulling from the publicly available record on ACRIS BBL 1717/69, (I encourage people to get familiar with how to use this publicly available tool! Google Oasis map and enter your address if you don’t know your buildings block and lot), the building was transferred from the private owner to Neighborhood Restore in 2001, and later to a combination of Settlement Housing and UHAB (SHUHAB) in 2004. Meaning: landlord out in 2001, not 2010. The property then went through an admittedly too long slog through an extensive stabilization and rehabilitation. During this time and the active existing resident body (the ones who went through the “hole in the roof” days) took several training courses while the property was rehabbed line by line. The final stage of this project involved them organizing a shareholder selection committee and selling to “outsiders,” who purchased and moved in to rehabbed apartments in a rehabbed building in late 2013. This is when Vern and Evi, along with about a dozen other families, moved into the 37(ish?) unit building. See, there were twelve years between the old landlord and the new people purchasing, and during those twelve years a lot happened.

      To me as a reader, this article presents 2010 like a pivot point. It was not. That type of thing is more consistent with the TIL or squat co-ops of the 70s, 80s, 90s, not the TPT co-ops of later years, the HDFCs that often contain stricter resale restrictions. These clarifications do make a difference when considering how to value “sweat equity,” who deserves what when it comes to capitalistic wealth creation vs. decommodification of housing as a human right (the far poles, with many possible points along the spectrum available), etc. The story of HDFC Co-ops is varied, and so are the housing law and general regulations that accompany them. That’s not necessarily a bad thing or a mistake. The history of HDFCs and HDFC owners in New York is fascinating and super varied.

      I have nothing but fondness and respect for the residents on 119th street, Vern and Evi in particular, and I’m sure that no one there would intentionally provide a misleading narrative. There’s a team of three individuals working on this City Limits story, and though I generally respect City Limits as a publication, this story was disappointingly researched and I don’t think it shed much light on delineating complex HDFC issues. Many things were not clearly or correctly stated, and not just about this specific project. I would encourage the authors to start by familiarizing themselves with the basic tools surrounding understanding property history if they continue to write on these topics as I hope they will. There are several training on things like how to read ACRIS records available for free through the Association for Neighborhood Development, ANHD.

  5. There are currently NO homeownership programs coming from HPD. 99% of HPDs development resources go to rental housing. The HDFC issue needs detailed study of all long term effects of a new regulatory scheme. The initial intent was to reduce the number of buildings coming into HPDs management; in many cases this was done with lax supervision of tenants (board members). These buildings shifted responsibility but did not adequately address the long term impact. HPD is now embarking on the same path 30 years later. HPD take time to study each building and propose/amend regulations on a case by case basis. It will take more time, but your future staff and homeowners will be happy not to go through this again in 2050 when the policy winds shift again.

    • As a shareholder at a recently reformed HDFC, I couldn’t agree more with this sentiment. To take our own co-op as an example, in 2012, we were over a half million dollars in debt to the city, mostly property tax debt. The co-op was being run by a predatory management company that only cared about writing itself a check once each month, and hiring out jobs to its “preferred” vendors etc.

      A small group of shareholders organized, held board elections and took the reigns. First thing they did was meet with HPD to see how HPD might be able to help. At the time, HPD said “sorry, you’re on your own.” So they fired the bad management company and hired a good one. They worked out a real budget, they raised maintenance to meet operating expenses and they put together a plan to get the building out of debt. Most importantly, they started holding regular meetings of all shareholders and got everyone to buy into the vision. It wasn’t easy! But they slowly but surely turned things around.

      Five years later our HDFC is out of debt with a healthy reserve fund and we are meeting all of our operating expenses. When something breaks, it gets fixed. The hallways are clean. Our board meets every month and our shareholders meet at least once per quarter. We hold annual elections, and our shareholders are kept up to date with frequent mailings and newsletters.

      We did all of this ON OUR OWN. We continue to adhere to ALL of the rules set forth in our conversion documents, including strictly enforcing income restrictions on resales etc.

      My point is: Isn’t this precisely what the city wanted when they designed this program? A very healthy, self-governing low-income co-op? We continue to get a tax abatement due to our corporate status and our enforcing of the income restrictions etc., but other than that, we are not costing the city and its taxpayers anything else! We don’t require a monitor, and that should be seen as a GOOD thing. That should be the goal for ALL of these buildings.

      We will not sign on to the new RA. Even though we agree with nearly everything proposed in it, we simply have not had good experiences when forced to work with the city as partners. They don’t do a good job and they don’t pay attention to the specifics and the subtleties of our HDFC. So we would rather pay a bit more in taxes than be forced into a relationship with the city like that.

  6. The authors of this article need to do some basic fact checking. The claim that units have been sold to “asset rich” middle income buyers for “millions of dollars” is a political one made up by HPD to justify the regulatory agreement, which further is De Blasio’s last ditch effort to create affordable housing on the backs of middle and low income New Yorkers. Perhaps “asset rich” means that after 20 years of saving, you can afford a down payment on an apartment, or that you have a retirement account. Vern and Evi’s story is atypical since they are in a new HDFC. I love in a HDFC coop (btw I work for the city as a community college professor so I guess that makes me “asset rich” ) that is in good financial shape after many years of struggle, well maintained, and well managed. The regulatory agreement would undo years of hard work and the loss of the tax break would affect low income residents adversely. The apartments in my buildings are large and when an original owner leaves they require huge investments on the part of shareholders because the individual units have not been maintained. Is the city ready to subsidize these improvements for those who do not have the income to make them? I agree with an earlier comment that the city should put its efforts elsewhere, especially into the Mitchell Lama program because these apartments are money pits. As far as I know, shareholders have shown huge opposition to this plan (not “some” as the article maintains) and it has not fallen on sympathetic ears. Mayor De Blasio has lost my vote in the next election.

    • Agreed. Although I’m sure there are isolated cases where apartments sell for “millions,” this is simply not the case in the vast vast majority of HDFC sales. It seems like propaganda meant to sell the public on the idea that the beneficiaries of these resales are greedy profiteers. Doesn’t leave a good taste in the mouth that the city is resorting to such tactics. Less reason for people living in HDFCs to trust that HPD indeed has their best interests at heart.

      The cynic in me tells me this entire endeavor is heavily influenced by De Blasio’s reelection ambitions. But I’m sorry, we will be living in these buildings long after Bill De Blasio becomes a footnote in our city’s history books.

  7. There is a recent court decision from the Appellate division first department that decided that original shareholders have to income qualify (again) when a co-shareholder dies (both names on lease and stock certificate), in order to have the remaining shares transferred to the existing shareholder (even with a Will). If you don’t income “qualify” , 20 or 30 years later you can now be forced to sell and basically be displaced from your home. Most people do not have the same income from 20 or more years ago. This decision makes no sense and impacts all HDFC shareholders throughout the city, as now Board’s and the city can potentially use this decision to get rid of shareholders already in possession of the apt for years as an existing shareholder. Shareholders can now be forced from their homes and neighborhoods that they have occupied and lived in for 20, 30 and 40 years. We can thank Deblasio for his fight against HDFCS and the attorney who blindly pursued this in court and for a court with a political agenda.

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