City Council Approves COPA, Housing Bills

“You fucked us over good!”

That’s what one audience member at Thursday’s City Council meeting yelled after the Committee on Housing and Buildings voted to approve several bills. The parting shot likely captures the sentiment felt by many landlords as well as others in the industry.

Indeed, on their way out the door, the City Council left its mark on the city’s housing market, a move that some believe will stunt housing construction and scare away investment.

The Council, at its final meeting with its current membership, approved a package of bills that housing groups claim will hamstring Mayor-elect Zohran Mamdani’s housing plan before he even takes office. It also signed off on the Community Opportunity to Purchase Act, or COPA, a measure that landlords and brokers warn will upend the city’s residential market.

Supporters of the housing regulation bills, however, believe that the measures will better steer public financing to the types of housing most needed by New Yorkers, including family-sized rentals.

“Today’s items reflect a shared commitment of this Council that when we use public resources to shape our housing market, we do so with intention, equity and real accountability to New Yorkers,” City Council Majority Leader Amanda Farías said ahead of the Committee on Land Use’s vote. “Taken together, these bills reflect a clear principle: When the city provides financial assistance, the public should see public benefit in affordability, unit mix and opportunity.”

Three of the bills set new rules for the kinds of housing the city finances, implementing minimum thresholds for the percentage of rental units dedicated to very-low, and extremely-low income tenants, as well as for the percentage of units with two- and three-bedrooms and those designated as homeownership units.

The Council additionally voted in favor of a measure that sets a minimum $40 an hour wage and benefit package for construction workers on housing projects with 150 units or more that are funded by at least $1.5 million in city financing.

The Department of Housing Preservation and Development estimates that those bills alone would cost $600 million a year (out of a capital budget of $2 billion) to maintain its current level of housing production and preservation, or result in 3,275 fewer housing units being financed if that money is not procured. During a press conference ahead of the full City Council meeting, Speaker Adrienne Adams didn’t dispute those estimates, but said the Council “stands with our information.”

A City Hall spokesperson would not say if the mayor plans to veto the measures, but indicated that the mayor is exploring his options. If he does, it will be up to the next City Council — and its presumed next speaker, Julie Menin — to decide whether to override the vetoes. Notably, Menin abstained from voting on COPA, which did not secure a veto-proof majority.

“These short-sighted bills will not only worsen the affordability crisis, but will also sandbag the incoming mayor and speaker,” a spokesperson for the mayor said in a statement. “Irresponsible actions like these demonstrate the importance of Mayor Adams’ efforts to modernize the housing approval process through the ballot measures that passed this November.”

Housing groups argue that these measures threaten to deflate the effect of the various initiatives approved this year aimed at increasing the city’s housing stock, including the just-passed housing ballot measures and City of Yes for Housing Opportunity.

The New York Housing Conference has warned that the new regulations could complicate Mamdani’s plan to build 200,000 affordable housing units over the next decade. Though Mamdani hasn’t taken a public position on the measure, a group that supports him, the Tenant Bloc, has spoken out against the bills that set thresholds for units with two- and three-bedroom units and for deeply affordable housing.

The Council on Thursday also approved COPA, which applies to multifamily buildings with four or more units that are considered distressed (defined by various criteria) or that have affordability requirements expiring within the next two years.

Under the bill, certain city-approved entities are given the right of first offer and refusal on these multifamily properties, meaning they get first crack to bid on the properties and then a chance to match any competing offer.

Opponents of the measure argue that it will scare away would-be buyers and delay deals. The bill also underscores a long-simmering tension over assumptions that nonprofits, by virtue of being nonprofit, are more responsible owners than their for-profit counterparts. Landlord groups have pushed back on this notion and argued that HPD doesn’t have the capacity to oversee COPA.

HPD representatives expressed similar concerns during a June hearing, suggesting that the Council should narrow the pool of eligible buildings. The bill has undergone a number of amendments, including limiting the types of buildings eligible and shrinking the exclusivity period for so-called qualified entities. These changes, however, failed to win over the measure’s biggest critics.

COPA supporters argue that the measure helps level the playing field for nonprofit owners who prioritize affordable housing. Council member Sandy Nurse, the bill’s sponsor, noted that she met with various stakeholders, including the Real Estate Board of New York, which led to extensive changes to the bill. She also noted that she inherited the bill, which was first introduced in 2020.

“We made a lot of compromises based on feedback from all of those stakeholders,” Nurse said.

The City Council did not vote on another bill that would have limited the percentage of city-funded studio apartments in senior housing projects. Members also didn’t consider a bill that would have allowed owners of one- and two-family homes to rent out their homes short-term, through services like Airbnb, without having to be present in the home.

The Council approved other bills followed by the real estate industry, including a measure that will allow the city to sell tax liens to a land bank, rather than a private trust. Another sets minimum wages for office security guards, a change proposed after the fatal shootings at Rudin Management’s 345 Park Avenue.

COPA

When owners decide to sell a multifamily building with four or more units that has a certain level of unpaid bills or violations or has affordability requirements expiring within the next two years, they must first notify the city, which will alert “qualified entities” — certain nonprofits and joint ventures between nonprofits and private companies — that the property is available.

Those city-approved entities would then have 25 days to notify an owner that they are interested in bidding on a property. Once that time runs out, the interested qualified entities have 80 days to submit an offer. Qualified entities also have 15 days after a competing bid comes in to match it.

HPD will determine the criteria for qualified entities, which must demonstrate a commitment to managing affordable housing. The bill is slated to go into effect one year after becoming law.

Construction Justice Act

Developers of housing projects with 150 units or more that have construction costs of $3 million or more and receive $1.5 million or more in city financing (not including as-of-right tax breaks such as 485x), must pay construction workers a minimum of $40 per hour in wages and benefits (with at least $25 going specifically to wages). The city’s Comptroller will determine annual increases to this rate.

Developers must also make “best efforts” to ensure that at least 30 percent of construction workers hired on these city-funded projects reside in the city. That is less stringent than earlier version of the bill.

The bill excludes supportive housing projects. The Real Estate Board of New York and HPD testified last year that the measure would be too expensive. Still, the measure, which was backed by the city’s laborers’ union, was viewed as more favorable than another minimum wage bill pushed by the carpenters’ union.

The new rules are slated to go into effect January 1, 2027.

Two-, three-bedroom bill

This measure requires that, over a five-year period starting July 1, 2027, at least 25 percent of the new dwelling units financed by the city are two-bedroom units and at least 15 percent have three bedrooms or more.

HPD can change these thresholds if federal housing funding is cut by 50 percent or more, compared to the prior four years, or if the city sees a “complete loss of availability of such resources to fund newly constructed affordable housing.”

The measure excludes some projects from counting toward “covered projects” that would be used to calculate the minimum percentages. Projects where at least 50 percent of the units are reserved for seniors, have fewer than 20 units, where more than 30 percent are supportive housing units and projects that have received key approvals by a certain date won’t count toward those thresholds.

Administration sources have, however, pointed out an apparent technical error in this bill: Rather than separating the list of exclusions with an “or” the bill uses an “and.” If applied literally, the bill would result in fewer exclusions, and according to the administration, further drive up the bill’s costs (HPD’s calculations are based on what they believe to be the Council’s intent).

Affordability thresholds bill

Beginning July 1, 2027, over a five-year period, at least 50 percent of new units funded by the city must be affordable for extremely low-income households (those earning no more than 30 percent of the area median income) and very low-income households (those earning no more than 50 percent AMI). At least 30 percent must be affordable to extremely low-income households.

Buildings with fewer than 75 units wouldn’t count toward the percentage calculation.

Homeownership bill

Over a five-year period, at least 4 percent of new housing units financed by the city must be homeownership units. This requirement goes into effect July 1, 2026.

Air conditioning mandate

Landlords, at the request of their tenants, are required to provide cooling systems (between June 15 and Sept. 12) to keep “covered rooms” at a maximum air temperature of 78 degrees Fahrenheit. “Covered rooms” apply to a tenant’s primary sleeping space, rather than the whole unit. In a win for rent-stabilized owners, the latest version of the bill requires tenants in regulated units to first consent to improvements needed to comply with the measure, as well as the related charges. Those charges would be applied through rent increases, as permitted by state law, which only allows the landlord to recoup a portion of the cost of individual apartment improvements.

Co-op timeline

Under this measure, a co-op board must notify prospective residents that they have received an application to live at the building within 15 days. The board then has 45 days to accept or reject the application. The Council declined to take up more controversial co-op regulation measures, including one that would have required boards to disclose the reasons for rejecting applicants.