Housing Development Fund Corporation (HDFC) cooperatives were set up some 40 years ago as a means of establishing home ownership opportunities for low-income residents in New York City. The program also served to help the city stabilize neighborhoods during a time when property abandonment rates were very high - and accelerating. But today, the HDFC co-op sector is facing issues related to new regulations, limits on sale prices of units, and the potential loss of tax breaks.
In response to the current state of HDFC co-ops, New York State Assemblyman Al Taylor, who represents the 71st District (including Hamilton Heights, Harlem and Washington Heights in Manhattan), held a forum to help HDFC co-op residents deal with the City to keep their buildings operating as effective cooperative properties. Approximately 100 people attended this forum at Manhattan’s Columbia Presbyterian Hospital last Monday.
“I recognize that there are a significant number of HDFCs that are struggling in my community,” said Taylor. “I happen to also live in a HDFC in my community, and we are facing foreclosure for the second time. My neighbors and I invested in these properties to secure our neighborhoods from slumlords and improve the living conditions for our children. It is my hope that these forums will be used as a resource for the shareholders, a place where experts can share their knowledge with shareholders and the elected officials can meet together with the city and state officials to find equitable solutions to the problems facing HDFC shareholders.”
At the time of their establishment, HDFC co-ops (which, like all co-ops, are incorporated under the State of New York, Business Corporation Law) were required to sign a regulatory agreement, known commonly as an ‘RA.’ The acceptance of this agreement entitled these co-ops to specific tax abatements under Article 11 of the Private Housing Finance Law.
“Regulatory agreements between the city and HDFC buildings obligates the co-op to perform in certain ways to insure compliance with rules, laws, and regulations to maintain a public interest existence,” said Yetta G. Kurland, an attorney and principal of the Kurland Group, a Manhattan law firm that represents many HDFC co-ops.