A proposed agreement drafted by New York City’s Housing Preservation and Development (HPD) department has caused Mayor Bill de Blasio some grief recently, as regulatory measures affecting buildings in the Housing Development Fund Corporation (HDFC) program have riled up some co-op shareholders.
In short, the de Blasio administration aimed to require HDFC co-ops to hire monitors appointed by the city, and set limits on the sale prices of units. Non-compliant buildings would lose valuable tax breaks; compliant buildings would gain them. As reported by the New York Post on April 29, the mayor met with a group of concerned HDFC co-op owners and, according to a post on the HDFC Coalition Facebook page, agreed to “pause” HPD's proposal, which owners believed applies a “one-size-fits-all” opt-in program offering greater tax incentives and increased city regulation to a situation requiring more nuance.
The co-ops in question, according to the Post story, are “once-derelict buildings the city sold decades ago to homesteaders for as little as $250 an apartment,” and “now have income limits for those who want to buy in.”
In a time of increased concern over skyrocketing costs of living, dilemmas over affordable housing are complex. The Cooperator spoke with attorneys who have long worked with HDFCs to ascertain how HPD's proposed regulation came to be, the nature of residents' objections to it, and whether a compromise can be reached.
In the years since the HDFC program was established, several of those originally derelict buildings rescued by the program have evolved into successful, independently functioning, even thriving co-op properties, while others remain in distress, or fall somewhere in between. HDFC co-ops may take advantage of property tax reductions under the Division of Alternative Management (DAMP), which encourages private ownership of buildings once owned by the city. Some co-op shareholders appeared concerned as to how the mayor's proposed regulatory move could affect these tax incentives.