The Daily Dirt: Lawmakers pass ground lease co-op bill. No, not that one

Senate and Assembly approve milder measure, sans rent cap 

New York State Lawmakers Pass Co-op Ground Lease Bill
Sen. Toby Ann Stavisky and Assembly member Linda Rosenthal with 100 West 57th Street (NYS, Google Maps)

Well, that was anticlimactic. 

I’m speaking of the state legislative session, which concluded last week. Many real estate people would probably prefer a lack of last-minute action. (Remember the two rent stabilization bills that passed at the bitter end of last year’s session?)

Many of the housing and real estate-related proposals we were watching closely were addressed in the state budget. But in the final weeks of the session, one measure in particular concerned real estate professionals. It would have capped rent increases on ground lease co-ops.

The bill did not garner enough support. The Senate and Assembly did, however, sign off on a separate bill sponsored by Sen. Toby Ann Stavisky and Assembly member Linda Rosenthal. It allows ground lease co-ops to renew or extend their lease terms (so long as their contract has provisions allowing such extensions or renewals) at any point, as a way to provide more certainty for shareholders.

Not all co-ops own the ground under them. Those that don’t have to lease it from the owner. But once there is less than 30 years left on a lease, shareholders can have trouble selling their units because prospective buyers can’t secure a mortgage with the lease expiration hanging over the building.

Real estate attorney Stuart Saft, who regarded the other co-op bill unconstitutional, said the approved measure likewise interferes in existing private contracts. The approved bill, however, creates more flexibility in existing contract terms rather than inserting new provisions.

“That, too, is changing a term of an expiring contract, but it’s not inventing a term,” Saft said.

The legislature also approved a measure to create a statewide registry for short-term rentals and another that established a timeline for selecting the downstate casinos. Lawmakers did not manage to expand a pilot program for basement apartments that inexplicably excluded parts of the city that wanted in.

Keep an eye out Tuesday for my roundup of where state bills landed!

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What we’re thinking about: Are you planning to attend the broker fee bill rally Wednesday? Send a note to kathryn@therealdeal.com.

A thing we’ve learned: The development of ranch-style homes with open floor plans is often credited with accelerating the death of the formal dining room, Vox reports. “Taking away walls creates a certain psychological shift,” Melinda Fakuade writes. “The dining ‘room’ no longer exists, so everywhere is the dining room: the living room, the kitchen table, wherever the need or urge strikes.”

Elsewhere in New York…

— Gov. Kathy Hochul on Monday tapped Felicia A. B. Reid as the executive deputy director and acting executive director of the state Office of Cannabis Management, Spectrum News reports. The state will work with a recruitment firm to conduct a nationwide search for a permanent agency head.

— ICYMI, former Rep. Mondaire Jones endorsed George Latimer’s bid to unseat Rep. Jamaal Bowman. Jones spoke to Politico New York about the swift backlash he faced from progressives over the endorsement, telling the publication that he has no regrets. “I just have been through so much, growing up the way I did, unlike these trust-fund socialists in Williamsburg and elsewhere suggesting that I’m not progressive enough,” he told Politico. “More than anything, I’m focused on the most important election of our lifetimes.”

— Gov. Kathy Hochul says state officials will figure out how to fund the MTA’s capital projects without the revenue it had been expecting from congestion pricing, Gothamist reports. “To assume that the only funding source had to be congestion pricing shows a lack of imagination about understanding other opportunities to fund these projects,” she told reporters. She said she remains committed to congestion pricing, noting that there’s “a big difference between a pause and an elimination.”

Closing Time 

Residential: The priciest residential sale Monday was $7.7 million for a 5,160-square-foot townhouse at 10 Remsen Street in Brooklyn Heights. Deborah Rieders and Tita Omeze of the Corcoran Group had the listing.

Commercial: The largest commercial sale of the day was $9.1 million for a 19-story, 99-unit residential building at 133-36 Sanford Avenue in Flushing.

New to the Market: The highest price for a residential property hitting the market was $24.5 million for a co-op unit at 2 East 88th Street on the Upper East Side. Sophia Elghanayan of Compass has the listing.Breaking Ground: The largest new building application filed was for a 38,378-square-foot, eight-story residential building at 2282 Bronx Park East in Bronxwood. Fernando Geremia of Fred Geremia Architects & Planners filed the permit. — Matthew Elo