If changing part of the 2019 rent law saves affordable units from going market-rate, will lawmakers get on board?
The 2019 Housing Stability and Tenant Protection Act changed the rules around rental to condo/co-op conversions. Before the law, existing tenants had to agree to buy 15 percent of the units for the conversion to move forward. The HSTPA bumped that threshold to 51 percent. The number of conversions quickly plummeted.
Two years ago, Sen. Cordell Cleare introduced a bill that would undo that change for certain projects built after 1996 with 100 or more units. Such projects could convert market-rate rentals using the 15 percent threshold if they keep affordable units permanently affordable or, in some cases, increase the number of affordable units.
The idea is to keep units income-restricted where affordability requirements are about to expire. For example, projects that received the property tax break 421a or those that used low-income housing tax credits in the 1990s have affordable apartments that are poised to go market-rate. The affordability requirements on such projects typically last 30-plus years. (The latest version of 421a, dubbed 485x, requires permanent affordability.)
Projects that already have permanently affordable rental units, such as those that included the apartments as part of the city’s inclusionary housing program, must increase the number of affordable units to take advantage of the eased conversion rules.
Cleare re-introduced the bill this year, and Assembly member Harvey Epstein is expected to re-introduce his chamber’s version.
Habitat for Humanity’s Matthew Dunbar says the bill has multiple benefits: It preserves affordable units, creates homeownership opportunities and would be a revenue generator (sales taxes, filing fees, etc.). Under the bill, nonprofits like Habitat would oversee the rental portions of buildings.
Not many lawmakers are keen to throw their support behind something that would reverse any element of the HSTPA. Still, it’s not impossible: In last year’s state budget, lawmakers changed the rules around how much landlords can increase rents on stabilized apartments when they complete unit renovations. Landlord groups said the changes did not go far enough.
Dunbar is hopeful that lawmakers will see the bill as a tweak to similar to a measure approved in 2022, that changed the purchase agreement threshold back to 15 percent for buildings with five or fewer units. He thinks the bill stays true to the intent of the 2019 rent law in that it doesn’t encourage the deregulation of rent-stabilized units through condo conversions.
What we’re thinking about: Landlords and tenant advocates support a proposal to create a state-based housing voucher program. Lawmakers have said this is a priority this year, but the governor did not include the proposal in her executive budget. Will the governor get on board this year? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Los Angeles once had a mass transit system, the Red Car, which ran on 1,100 miles of track, according to the podcast “99% Invisible.” Its downfall inspired the scheme in the film “Who Framed Roger Rabbit.”
Elsewhere in New York…
— Next month Mayor Eric Adams is slated to testify before the House Oversight Committee on NYC’s status as a “sanctuary city,” Politico New York reports. The mayors of Chicago, Denver and Boston will also join the March 5 panel.
— A new study found a link between climate change and increases in rat populations in 16 cities, including NYC, the City reports. Temperatures in NYC increased increased about 0.3 degrees each decade since the 1950s, and the city saw the fourth highest spike in rat populations of the cities studied.
— NYC is under a winter weather advisory for part of Thursday due to snow, sleet and freezing rain forecasted, Pix11 reports. Stay safe out there!
Closing Time
Residential: The priciest residential sale Wednesday was $3.37 million for a 1,628-square-foot, sponsor-sale condominium unit at 29 Huron Street in Greenpoint. Kayla Lee and Lancelot Watson-Taffe of Serhant had the listing.
Commercial: The most expensive commercial closing of the day was $28.2 million for a 50,908-square-foot, 18-unit, mixed-use apartment building at 2283 Third Avenue, AKA The Bridges NYC North, in East Harlem. The Rockfeld Group sold the property to Slate Property Group.
New to the Market: The highest price for a residential property hitting the market was $28 million for a 7,348-square-foot co-op unit at 740 Park Avenue in Lenox Hill. Kathryn Steinberg and Serena Boardman of Sotheby’s International Realty have the listing.
Breaking Ground: The largest new building application filed was for a combined two mixed-use buildings at 281-311 Marcus Garvey Blvd., Bedford-Stuyvesant. Permits were filed by Fernando Villa of Magnusson Architecture and Planning.
— Matthew Elo