The Real Deal New York

City mulling big changes to HDFC rules

De Blasio administration proposing price cap for affordable housing co-ops

September 28, 2016 12:15PM

Bill de Blasio and 601 West 136th Street

Bill de Blasio and 601 West 136th Street

The city is considering implementing major rule changes governing Housing Development Fund Corporation co-ops before tax breaks sunset in 2029, and residents are nervous.

There are more than 30,000 HDFC units in some 1,200 buildings across the city in neighborhoods like Harlem and the Lower East Side, where tenants for as little as $250 took over properties that were being neglected by landlords.

But the city now says some of those buildings, largely funded through tax subsidies, are being mismanaged and it’s trying to make sure that HDFCs in gentrifying neighborhoods remain affordable, DNAinfo reported.

One of the proposals Mayor Bill de Blasio’s administration has put forward is setting caps on sales, limiting buyers to those who earn no more than 110 percent of the Area Median Income, or $89,760 a year for a family of three.

Nearly 84 percent of the 900 HDFC co-ops sold between 2011 and 2015 went for $500,000 or less, according to the Independent Budget Office, but there have been outliers that have sold for north of $1.5 million.

In buildings with expensive sales, owners could have their units “carved out” of the price cap if they resell the unit, so as not to unfairly punish those who bought at high prices. They would, however, be limited to selling to people who earn 165 percent of AMI, or $134,640 for a family of three.

Buildings could opt out of the price cap, but then they wouldn’t receive the valuable tax breaks.

Michael Palma Mir, an HDFC resident at 601 West 136th Street, said he fears the price cap will negatively impact the building’s ability to operate efficiently.

“We find ourselves facing a regressive policy,” he said. “This is a one-size-fits-all regulatory agreement — not something we expected from a so-called progressive mayor.” [DNAinfo] Rich Bockmann