The co-op buildings are part of the city’s Housing Development Fund Corp. (HDFC) program, which gives homesteaders ownership of blighted buildings, along with certain conditions and enticements, per the Post, where the story was Page 1 on Sunday (with the headline "Man of Steal.")
Per the article:
The private co-ops were once derelict buildings in neighborhoods like Harlem, Washington Heights and the Lower East Side that the cash-strapped city sold to residents beginning in the 1980s for as little as $250 per unit. The city was happy to off-load the headache properties, which had been abandoned by absentee landlords or seized from tax deadbeats.
Over the years, the homesteaders banded together to create livable apartments, and at the same time revitalized blighted neighborhoods.
Now, the city wants to seize control of what have become valuable assets, and livid residents are preparing for a legal war to stop it.
While many of the co-op buildings have prospered, the city says 27 percent of them are in "significant distress" from mismanagement and other issues.
According to the Post, with de Blasio’s proposal, two years in the making, the buildings would sign 40-year agreements with City Hall that would put them under the watch of a nonprofit monitor that the city would choose, and the co-op would pay for.
Several Manhattan City Council members are asking the city — specifically Maria Torres-Springer, the incoming Housing Preservation and Development (HPD) commissioner — to hold off on the process to "ensure real meaningful input" from co-op residents.
"There was virtually no consultation with HDFC shareholders as this regulatory agreement was being crafted, and it was essentially sprung on them after it was already completed,” Council member Corey Johnson told the Post. (The paper called de Blasio's planning "Stalinesque.")
Critics contend this is merely a political move to boost the mayor's affordable housing numbers. Per the Post: "De Blasio has pledged to create or preserve 200,000 units of affordable housing in 10 years — and the controversial plan would add 30,000 units to his inventory."
A spokesperson for the mayor said that said the proposal was meant to protect HDFC co-ops.
One EVG reader and co-op resident recently summed up the situation this way:
This new proposed Regulatory Agreement is overreaching and would result in a loss of autonomy and decision-making abilities that benefit HDFC buildings, as well as costing individual shareholders hard-earned equity.
The new rules include a 30 percent flip tax on all units when they sell; the requirement of hiring outside managers and monitors at our expense; a ban on owning other residential property within a 100-mile radius of New York City; and more draconian clauses. Community meetings to discuss the agreement have been contentious and hostile, and so far not one HDFC in the entire city has publicly supported the plan. Very few HDFCs in the city need financial help and we strongly oppose a "one size fits all" regulatory agreement that will cost us money, resources, and most important, value in our home equity.
And...
The problem was that HDP wrote the Regulatory Agreement without any input from HDFC shareholders. When we caught wind of what was happening, we were able to force a community meeting, with the help of Council Member Mendez's office. They have since held a handful of meetings but say they are moving forward within the next couple of months. They are also not giving a clear timeline, which of course has many of us panicked.
For more background, you may visit the HDFC Coalition website here. There is also a petition here.
Previously on EV Grieve:
Meeting on Jan. 17 for shareholders living in HDFC buildings
CB3 will hear HPD presentation on HDFC regulatory agreement this Wednesday night
Great and very proactive response by all co-ops and tenants against this corrupt mayor and administration.
ReplyDeleteIf de Faustio really is so concerned about the welfare and livelihoods of the people getting by and continuing to struggle to afford living here still, and he obviously doesn't since he wants to cheat and primp up his stats to fulfill his agenda, he would let the people in the co-ops choose the non-profit instead of one of the shady non-profits he prefers. And if conditions are such an issue now, he should have used this "significant distress" stipulation against Toleando, Kushner, Corman and the rest of the scumlords from the outer boroughs making their tenants suffer by refusing basic services, intimidation and rodent extermination.
If there is any scant of hope, this could be de Faustio's last stand before he gets frogmarched out of city hall in handcuffs.
Again the De Blazio Socialist agenda. Contracts entered into need to be respected the arbitrary idea to rewrite these agreements amount to nothing more than a government taking of property. The city made these arrangements decades ago when it was a solution to its problem of abandoned buildings in neighborhoods not experiencing economic prosperity. People took risk in assuming these buildings and the deals provided the affordable housing of its time albeit risking your life in crime ridden areas. This is again a arrogant over reach by the Mayor playing to his far left base the cities housing crisis will not be solved by the Mayors Office reneging on deals made long ago there is no quick fix. And a Mayor who thinks his ideas reign supreme using politics to upset what was settled business needs to go after this term is complete. It is a Tale of Two Cities here always has been for centuries that is not going to change by DE Blazio Fiat and Shenanigans.
ReplyDeleteOne more brilliant move by the mayor to make sure he never holds public office again.
ReplyDeleteDear Mayor, enjoy the remaining time in office and when you start your re-election campaign make sure your super rich develper buddies got your back because the people of this city will send you packing back to Brooklyn where you can ponder your disastrous term in office as a private citizen.
ReplyDeleteanon 7:08 AM
ReplyDeleteI'm not sure what form of Socialism you are referring to but this move by the mayor is pure Capitalist to me. In this case it is the State breaking contact with it's citizens and changing the rules to benefit the State with the intention of ultimately forcing those tenants from their property and then the city selling those properties to private developers.
Capitalist respects private ownership this is the State taking property for what Elected Officals believe is the greater public good that makes it socialism
DeleteLet's start with a couple of uncomfortable truths: 1) Property tax abatements are either time-limited and/or come with significant conditions. 2) The City has identified a range of issues around the operation of these HDFC's ranging from mismanagement to profiteering that should concern taxpayers since we are subsidizing these buildings through the sharply reduced property tax rate paid by the HDFC's.
ReplyDeleteTime has shown that this program needs some significant modifications and it's unlikely that the City Council leadership will side wth those who want to maintain the status quo.
Another message to the HDFC Coalition: The fact that Post is now your bedfellow should worry you. That paper is not your friend. It despises this program and knows the clock is ticking, and would love to see a crisis come about.
Comrade De Blastio:
ReplyDeleteStop being a @#$%^% socialist commie, and let the market sort this out. The city should have stayed away from these properties to begin with, and should have let them be homesteaded by individual owners who would have been incentivized to keep them in good repair, as the housing market recovered from the '70s recession.
This is beyond outrageous. NOTHING is going to get this mayor a 2nd term.
ReplyDeleteIf he wants to do something useful, he should recover the Rivington Street property and develop that for "affordable housing."
Get a grip, people. With all his faults, DeBlaz is still worlds better than Giuliani or Bloomberg.
ReplyDeleteWhat you smoking?
DeleteListen up you primitive screwheads, what's mine is mine and what's yours in mine. I love it when people get a lesson in good governance.
ReplyDeleteAlso, quick Econ lesson for 9:18AM - Socialism and Capitalism are like Hulk Hogan and the Iron Sheik; they only fight when the cameras are on. Consult your portable Marx for details.
The thing I wonder: who can beat him? He's running virtually unopposed as of now, and it's not long until the election.
ReplyDeleteA question: are people who went through the struggle to rehab these buildings years ago now able to sell their apartments at market rate? If so--does the co-op take a flip tax or does a more significant part of the sale go to the co-op board?
ReplyDeleteShame on the City. Shame on the Mayor. Hard working people took over failing units and turned them into decent living for lower economic individuals and families. If not for them, these buildings would have been burned down, torn down or just remained plain old run down. Now that there is money to be made from them, due to the booming real estate values in the EV, the city wants them back. Why are we surprised by this transparent tactic to make money off the backs of others without reimbursing them?
ReplyDeleteSure, they may be several units that should be taken over by the city but this should be done on a case by case basis, not a blanket policy of any type. Every unit should be inspected and the people living in them should be vetted properly to be sure that they are the ones who are supposed to be benefiting from their hard work and good neighborliness.
Wake up Mayor!
@Anon 9:28
ReplyDeleteConcerning time limited tax abatements, non-HDFC cooperatives and condominiums get tax abatements without any of the strings attached to the DAMP tax abatement. Why should they get such abatements? Reform is fine, given the healthy state of the vast majority of HDFCs, a one size fits all approach is not.
9:28am: You want someone to go after tax abatements, then NYC should go after 421A abatements that are a gift to rich developers for putting more glass "luxury" boxes all over the city.
ReplyDeleteDeBlasio needs to go. However, I want my tax dollars to go to affordable housing for working people who would benefit-not to snotty mainstream transient young people whose parents purchase through all cash transactions. Shareholders have marketed the co-ops by allowing cash only sales, gifting, generous subletting policies,etc., and by selling the East village as a vibrant community of bars, restaurants and round the clock fun. People move in, stay for a few years(renovate-washer; dryer; marble; wood-whatever), then sell at a profit, the building gets the flip tax, they use it to build a roof deck and backyard, then the co-op goes on the open market again-the sale price has hugely increased, they now pitch: washer: dryer; marble; wood; roof deck; yard in one of the most vibrant nightlife neighborhoods in the world. This is corrupt. The city and shareholders are both reprehensible for this slice of gentrification.
ReplyDeleteMany HDFC shareholders have abused the system, particularly in the East Village, over the past decade, just look at any of the real estate listings.
"... we don't exist just so housing non-profits can control us & make money off of us!"
ReplyDeleteHere's part of your problem. You have a fundamental misunderstanding of your *place* in all of this. Next ...
"WE DID THIS CITY A FAVOR ..."
I hope you learned your lesson now. Don't ever do the state a favor. State's aren't in the business of returning favors. And ...
"THESE BUILDINGS BELONG TO US!"
Go tell it to the Indians. You own nothing. You possess nothing that can't be taken away with the swipe of a pen and, if necessary, lots of guns.
Good luck but be prepared to fight.
@1:31 - and a fat man in red suit that gives presents to good children on Christmas lives at the North Pole with a bunch of midgets with pointy ears.
ReplyDeleteSure capitalists respect private ownership, that is their (divine) right to privately own everything. Remember one of your greatest capitalist rotters, John D. Rockefeller famously said, "competition is a sin." How oddly Socialistic. No, not odd. You realize that money doesn't disappear under Socialism, right? You realize that Socialism and Capitalistic Monopoly lead to the same conclusion, right? You realize that Socialism was created by the capital owning classes, right? Or did you think that chimney sweeps pooled their meager shillings and pences and arfs and arfs together for 11 years so Karl Marx could sit in a library in London and write Das Kapital?
Saying that Capitalism respects private property is just repeating textbook nonsense, like 'all people are created equal' and other such childish rubbish. And then people life these HDFCers get reamed by their dot.gov and can't understand why.
Socialism is great till it runs out of other peoples money
DeleteI'm quite surprised by the universal opposition to this proposal. Why oppose the flip tax or the ban on owning property within a 100 mile radius of the city? I agree that other tax abatements should also be taken away, but these unit owners are behaving in an incredibly entitled fashion. We subsidized their lives for decades via tax abatements, and now they want to sell the units for profit and not pay a flip tax? I have zero sympathy for people looking to cash out on affordable housing. If you're for affordable housing, you shouldn't want HDFC shareholders to flip units to the highest bidder. It reminds me of the Mitchell-Lama people going ballistic over anything that would interfere with their ability to profit.
ReplyDeleteHere's something to ponder since big bad bill wants to help so bad, concerning the usage of non-profits. Remember a month ago when those 2 babies were scalded to death from a busted radiator that went ignored. That building was a cluster site run by a non-profit called BEDCO which got contracts to run apt. buildings renewed despite a shitty history of myriad housing violations.
ReplyDeleteThe city should find ways to get these buildings to be able to stand financially on their own. Real estate price are high now. Most of these buildings should be able to finance their independence and the current coop owners should benefit.
ReplyDelete"Listen up you primitive screwheads, what's mine is mine and what's yours in mine."
ReplyDeleteYou must be wonder in times of bad health news for family and friends.
Hail Trump!
So let me get this straight. You take money from the government, yet you don't believe we as tax payers have any right to make sure that money is being appropriately spent. That's pretty audacious. You say you want to be able to sell your apartment at whatever price you want to recoup your equity, well you have already gotten your equity back through a 20 year tax abatement so just leave well enough alone. What the City is requiring is not unreasonable at all and quite frankly is attempting to ensure that these units remain affordable. Isn't affordable housing the whole idea behind this HDFC concept in the first place. This was never intended to provide people with an asset they could dispose of at a tidy profit, but instead as a means of turning blighted properties into decent affordable homes for working people. So whatever the City needs to do to make sure that remains the case so be it.
ReplyDelete@8:30pm: If you think this proposal has come up b/c the CITY "needs to do" something to make sure "blighted properties" became "decent affordable homes for working people" then I have a slightly used bridge to sell you.
ReplyDeleteSame as the CITY needed to make sure the Rivington deal preserved the building's use as a nursing home!
PS: The people who rehabbed these derelict buildings (which NYC quite honestly didn't give 2 shits about at the time) have earned, via $$ invested and sweat equity (among other things) the right to NOT HAVE the City come in and walk all over them. If those buildings were not now "desirable" housing that fit with DaBlahz's re-election "theme", would this have come up at all? The answer is: Hell,NO!
PPS: As to the clause about not being allowed to own another home within 100 miles, the city can go fuck itself. If I inherited or saved up to purchase a piece of land, and then built my country cabin or bought a trailer home, why is it the City's business? NYC should appreciate that people on limited incomes have been so thrifty, hard-working, and industrious. If you can do that, I say: Good for you!
Oh, wait, I forgot: having a 2nd home is only for the Richie Rich kids in Tech or Finance! Everyone else, just spend the summer on the greenbelt by the river.
let’s get real here folks.
ReplyDeleteif you buy a house does the bank seize after you have been making your payments on time?
and let’s assume the HDFC buildings now “in trouble” did not pay their taxes on time or at all - why did the city wait over 25 years to (in most cases) “discover” this problem?
could it be that there will be a mayoral election with an incumbent who just promised to build or preserve 200,000 units of affordable housing?
and let’s not get into what is affordable, or how much is too much, or non-profits who profit from all of this, or landlord greed, etc. etc.
these buildings were unsafe. many were about to be demolished. abandoned by their owners they were NOT PAYING ANY REAL ESTATE TAXES.
and while there is an abatement (that runs out in 2029) these buildings, or at least the ones that are not in trouble, pay their taxes, maintain the building and preserve affordable housing, even if it is theirs.
for whatever reason a person now sells, where could they possibly afford to go with their “huge” windfall? these are not luxury apartments in elevator buildings with doormen and services, rooms for whole food deliveries and roof gardens. even securing a mortgage can be problematic. there really is little profit motive in this arena.
the real profit can be found in the huge tax breaks given to developers to build luxury apartments while providing a few that are below market rate for a limited number of years. below market is not necessarily affordable.
by the way, i believe that the flip tax is a red herring, most buildings already have one.
No one seems to understand that the city isn't taking over ownership of these buildings/units. They're imposing regulatory restrictions on them, which is not the same thing. You know what it does resemble? Every other tax-abated unit in the city, which theoretically has a regulatory agreement attached to it.
ReplyDeleteYes, this is a grab by de Blasio to boost his housing numbers, but it's not like he's actually removing the current unit owners or taking their property. He's trying to establish NYC oversight through much the same mechanism that 421a apartments get regulated. People on this blog love to cry foul every time a for-profit developer builds a new building, even ones with rent regulated apartments. I would think there should be complaint when others are not being held to the same standards....
Anon 10:47 Here is basically a no-strings-attached tax abatement for condos and co-ops http://www1.nyc.gov/site/finance/benefits/landlords-coop-condo.page Why should these apartments get a free ride? There are problems with some HDFCs but this solution is absurd.
ReplyDeleteThe city has more then enough regulations governing residential buildings. This is just a intrusion by the city addiing to a convenant already agreed to years ago. It will stand up in court
ReplyDeleteThey got their apartments for a few hundred dollars. It's unreasonable for them to not to pay their fair share of taxes going forwards. Get a job people.
ReplyDeleteAnonymous 3:18 said...
ReplyDeleteThey got their apartments for a few hundred dollars. It's unreasonable for them to not to pay their fair share of taxes going forwards. Get a job people.
yes it is unreasonable. "they" paid with their sweat and money and time. more than you can imagine. you have no idea what you are talking about.
"they" had jobs and at the same time rebuilt collapsing, unsafe, and mostly empty buildings. over the 25 or so years the taxes "they" paid on these buildings comes to hundreds of thousands of dollars - or more - depending on the size and location of the building.
so, "they" saved a building and put it back on the property tax rolls, created affordable housing, benefitted the neighborhood, and probably now in their senior years "they" shoukd "get a job"?
there is alwlays a "they isn't there?
Blue glass they have paid an extremely reduced amount of property taxes compared to what they would normally pay. In exchange for this benefit, what is so wrong with the City wanting some monitoring capacity.
ReplyDeleteIt seems the only non-strident voices in this conversation are those of people who dare to suggest that there may be some merit to the notion that the City is entitled to place some reasonable restrictions on how these coops are operated in return for substantial property tax abatements. Yes, wealthy developers get away with all sorts of things but when that's your justification for condoning rampant abuses in a program that is trying to preserve affordable housing we are on a slippery slope.
ReplyDeleteLook here: http://www1.nyc.gov/site/finance/benefits/landlords-coop-condo.page The link shows property tax abatements for market rate individually owned apartments, not 421a or some other tax break for wealthy developers. Are you saying that they should only get tax breaks if they agree to monitoring and restrictions? There's your real slippery slope.
ReplyDeleteWell, hello everyone! Good to see such interest in this issue. My comments:
ReplyDelete1. You might want to give some credit to the opinions of the people who actually live in the HDFCs, who actually took on a huge risk and challenge of taking a rotting carcass of what had been a building, and making it one again. This took decades. Do you think you really understand what it took to make that happen? And that they still work hard to keep their building together? Do you really understand that the City was in economic crisis and almost went bankrupt, and had suddenly become a slumlord with thousands of buildings, and desperately needed people to rehabilitate them, and the City was too broke to help much at all? It's easy to sit at your computer and imagine that these people were handed the keys to a brand new building, renovated by City tax dollars. In fact, the opposite was true. The building was abandoned, was dangerous, the City was not collecting ANY taxes from it, while liable for anything that happened in the building. The City let these people do the work, and then the City slipped in the 60/40 agreement whereby the City would get 40% of any sale for the next 25 years. Now that's the way to show appreciation!
2. Do you really think that you understand that these people not only did this work, but invested their own money, and had to deal with all kinds of red tape and awkward rules and regulations that frustrated them along the way?
3. Do you realize that the City was truly desperate to have people take over these buildings because the City couldn't afford to keep them, and the run down buildings were ruining whole swaths of the City? And do you realize that the City knew they were dumping expensive rehab projects on low income people, and that not all buildings would be successful, but handing off the buildings saved the City huge amounts of money because desperate people would try anything to have a home of their own and make it work? See this article from 1981: http://www.nytimes.com/1981/04/08/nyregion/city-struggling-in-attempts-to-sell-tax-delinquent-apartment-buildings.html?pagewanted=all
4. Do you realize that this was originally an urban homesteading program, and that most of the restrictions expired after the first 10 years? Would you expect any property owner to volunteer to be restricted any more than they already are?
5. Do you think that it is fair to entice low and moderate income people to take huge risks and invest what little money they have and work for decades, believing that they might work their way out of poverty, and then tell them that they started out poor, and it is better that they stay that way, because it would be wrong for them to benefit from all their decades of struggle, because other people who didn't contribute to the building should be able to buy an apartment there for cheap, because by God, it's best to steal from the poor to give to the poor! Hmm, er...right?
6. It is STILL a benefit to the City any time a group of people keeps a building like this afloat, and HDFCs do pay taxes! They just get a tax abatement (discount), just like market rate coops & condos get a tax abatement. But the market rate coop abatement comes with no strings attached, and HDFCs aren't allowed to get it! http://www1.nyc.gov/site/finance/benefits/landlords-coop-condo.page Think about that for a minute...
7. This isn't just about money. It's about fairness. Respecting HDFC shareholders as people, and honoring the deal that was made. The DAMP tax abatement was passed as law and runs until 2029. The City created it because it became obvious that lower income people needed to invest what little money they had to keep repairing the buildings, so it was a wise choice to lower the taxes on HDFCs. A failing HDFC means huge, costly headaches for the City, so the tax break was actually a good deal for the City.
ReplyDelete8. It's also about being independent. We've earned our rights and we will fight for our self-determination. We aren't children. The City wants to create affordable housing. So, keep it affordable! Keep the taxes low! Why threaten to RAISE taxes on HDFC residents if we don't submit to having our property rights stripped from us by a "monitor" that approves our decisions?
Are we to be treated as children because we aren't rich?
9. Some HDFCs do set price caps, because their building is now in better shape and they want to keep sale prices affordable. That's fine! But you don't need to sign a regulatory agreement and hand over control of your building to do that!
10. People almost never move out of HDFCs. They leave them to their children. But some people have discovered that, because their children now have jobs, due to antiquated formulas, they can't take over the family home, the one that their parents worked for decades to bring back to life!
11. Because people rarely leave HDFCs, the sales price isn't even the issue when we talk about affordability. Affordability is how much we pay per month to live there. But if we are forced to leave for some reason, shouldn't we be able to sell (not market rate, because HDFCs are income restricted and ALWAYS sell for less than an unregulated coop) and get back some semblance of the value of the apartment and what the years of sweat equity and personal funds that we invested? If we can't, we are trapped inside our buildings for live, perhaps for generations, because we can never afford to leave and have a fighting chance to get another place to live.
12. These buildings don't run themselves on utopian pipe dreams of how the world should be. They take money. The money comes from the people who live there. And sometimes, a sale happens and a flip tax brings in extra, and that money is used to finally do that repair that needed to be done many years ago. It takes everything we have to keep these buildings alive, and these buildings are affordable as they can be, but we have to be realistic. If the City is too restrictive, there won't be enough money to keep the buildings operating, and eventually, the City will be stuck with the bill, again, and the buildings will be winding their way to being torn down or becoming public housing.
The real problem isn't that HDFCs must do whatever it takes to survive, enough if that harshes the mellow of the dreamers. The problem is that the Federal Government has abandoned public and affordable housing for decades, so the City is trying to brainwash low/middle income people into thinking that they should hand over what little they have to other low/middle income people when they leave. Except, again, there is this one little detail...we aren't leaving. There is nowhere to go.
Again...if you want to express an opinion on the HDFC issue, perhaps you might want to first get to know the issue by learning it from the people who know it first-hand: the people who actually live in these HDFC buildings and struggled to bring them back to life.
Well said and the heart of the matter poor people have property rights as well not to be trampled by Big Brother Government!
DeleteOh, so you think that HPD and UHAB know how to manage HDFCs and will make things better? Read this: http://www.palanteharlem.org/BrokenPromisesTIL.pdf
ReplyDeleteThese apartments were never supposed to be speculative investments to be traded on the open market period.
ReplyDelete@1:34 PM
ReplyDeleteNobody, not even HPD, is suggesting that they are.
"These apartments were never supposed to be speculative investments to be traded on the open market period."
ReplyDeleteActually, HPD endorsed the concept of selling HDFC apartments for profit by (a) only having 10 year restrictions, and (b) forcing 60/40 agreements, which lasted for 25 years, whereby 40% of profit had to be given to the City. There was no prohibition on selling in the "open market", but they couldn't be sold to anyone who was above the income limits. Finally, HDFC apts never sell for "market rate" because they are income restricted, hard to sell, and banks often don't want to give loans on them. Only market rate coop apartments sell for market rate...and market rate apartments go for 2x, 3x, 4x or more than HDFC apartments, which always sell for below market rate.
guys
ReplyDeleteanyone have a few BEFORE pictures they can scan onto grieve -
i don't have a scanner, just pictures.
a picture is worth 1,000 words
@2:06 Well they are. With most of them now being offered for cash only and other marketing that targets kids, it's a better deal for parents than a dormitory. Perhaps its true that apartments in luxury buildings with elevators and gyms sell for a great deal more but comparable coops in non HDFC walkup buildings sell for essentially the same, although the HDFC coops maintenance is lower. The flip tax was put in place to deter speculation, but as it stands many of the units have turned over multiple times, creating more expensive coops with better amenities and low maintenance. It sounds like some HDFC shareholders believe that the apartments should remain affordable and some believe that they should be able to sell to the highest bidder. I think they have abused the system and contributed to gentrification. I don't think an affordable HDFC two bedroom should go to two snotty young brats whose parents give them the cash to buy the apartment just because they fit the bill for the income restriction. I don't think that hard working people should not have the opportunity towards home ownership because it's a closed door.
ReplyDeleteAnonymous Anonymous said...
ReplyDeleteOh, so you think that HPD and UHAB know how to manage HDFCs and will make things better? Read this:
http://www.palanteharlem.org/BrokenPromisesTIL.pdf
March 2, 2017 at 1:13 AM
thank you anonymous
a very interesting read and 50 pages full of reasons why you should not get let housing non-profit groups and/or hpd control your building
Perhaps the primary purpose of the flip tax is to help HDFCs have money to repair their buildings and keep them from falling apart. Without the flip tax money that comes from sales, many HDFCs would be falling apart!!!
ReplyDeleteCash sales? Well, yes, because many banks shut the door on you as soon as they hear the word HDFC! And if the HDFC is somewhat distressed by being behind on water bills or taxes, or other difficulties, banks won't touch the building and won't make loans to buyers. That is why cash sales are so common, and often such a sale literally SAVES a building!
Brokers will write ridiculous ads, but approval for new buyers is up to the board, and frankly, I would pick a buyer who offers less $ and can contribute to the building, than a student who offers more but has no experience with running a building and therefore doesn't have much to offer the coop in the way of skills.
A good board isn't looking for a "snotty young brat" with money, they are looking for someone who can pull their weight. Yes, that person might make a cash offer because they have savings and/or grandma died a few years ago. But remember: if the coop doesn't have enough money to keep the building in good shape, then NO ONE will be housed. Nothing is perfect. Most people in HDFCs are aware of the contradictions and they are doing the best they can. And it is a hell of a lot of work, to make it work! HDFCs may not be perfect, but if perfection is your standard, then you will rarely find anything that meets your standard.
Everyone is against capitalism until the government seeks to reign in their own form of capitalism. While the 421a abatements always have been nonsense, there last 20 years and deplete fairly quickly. There is no reason for any property owner to not have to bear the brunt of taxes, nor for people to earn market rate returns selling non-market rate properties.
ReplyDelete@7:15Many people don't want the flip tax now, now they don't. This has become common to ask for a cash only transaction not an offer. The prices keep escalating and now there's a split between people who paid a fair amount of money for their units and long time owners and that isn'the perfect. No one in need of affordable housing will be housed if there isn'the a cap. It is what it is.
ReplyDeleteGrieve, I wish you would pin the two part response at 11:14 or I wish I could up-vote it. It addresses all of the points that are coming up again. Flip taxes exist at every co-op, including market rate ones. Cash sales depress the sale price as most buyers need to borrow to buy. Even those who can buy with cash can buy more apartment if they leverage their cash as part of a loan. Being approved for lending in an HDFC is hard.
ReplyDelete8:56 A few people have pointed out that market rate apartments get tax breaks without strings. Where is your concern about that tax break? If you didn't know and are now concerned, focus your energy there, as the elimination of that tax break will lead to much more revenue than with this one.
I have lived in the East Village for 30 years and am tired of subsidizing these folks with tax breaks. They paint themselves as heroes. Who are they benefiting but themselves? They hit the housing jackpot. The vast majority of us did not.
ReplyDeleteThis is what has been happening in the EV over the years. I've noticed lots of apartments in a particular building not just one flipping over and over. How is this different than buyouts. Isn't it changing the demographic and allowing for higher sale prices and restrictions.
ReplyDeleteCome home to a completely renovated 1 bedroom unit that boasts 9 1/2 feet high ceilings and multiple SE facing windows.
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This East Village Co-op is close to great restaurants, performing arts venues and parks, With a low $333/month maintenance that includes heat, hot water and cooking gas, this prewar gem can be yours.
Contact me for a private viewing.
Income restrictions apply; $104,775 for 1 person, $119,625 for 2 people, etc.
Have you lived for 30 years in a rent-stabilized unit? Who subsidizes that? If you're saying nobody should be subsidized, why not start with the subsidies that market rate units are getting? Surely those people are the least needy when you consider the spectrum of people who get subsidies.
ReplyDelete10:57 Nobody is really standing up for HDFCs with those types of sales. Those buildings will either sue the city or they refuse to sign the new agreement and exit the program. A large majority of HDFCs sell units for actually affordable prices. Given all of the points that have already been made, particularly the point about no-strings tax abatements for market rate units, why should well run, honest, and affordable HDFCs be subject to these proposed restrictions?
ReplyDelete@10:57-myself
ReplyDeleteYeah, the price is $525,000 okay. I'm just trying to show how I've watched units in HDFC buildings flip multiple times and that it just continues. Also, once one unit shifts in this way then a whole bunch in the building seem to follow.
Let me chime in as someone in a late-70s-era EV HDFC that is grappling with these issues and still has some original homesteaders in it. The fact is, the City was very lax both in crafting agreements in the past and enforcing them since. THe HPD manpower devoted to this for years has been something of a backwater, sparsely staffed. Deeds and Certificates of Incorporation vary wildly among the early HDFCs (up until say the 1990s). The City is retroactively emphasizing their 'this is supposed to be low income housing' aspect of the agreements, whereas the homseteaders themselves recall the City's 'for the sweet love of god please help us revive these burnt-out neigbborhoods' aspect most prominently. In line with this, there are some old agreements with language that appears to release their HDFCs from income restrictions after X number of years. The City, for obviously political reasons, is now saying that none that language matters, all that matters is Article XI language designating HDFC's as low income housing. Forever.
ReplyDeleteThere are certainly HDFCs that are atrociously run, with poor shareholders and tenants suffering, and certainly HDFCs whose shareholders are grossly gaming the system, i.e., most of them moved out years ago while continually renting out their units for market rates, in some cases keeping all the profit instead of returning any of it the the Co-op. There are also ones that have been well-run from Day 1,have never let their building become rental/sublet/AirBnB hotels, and have sold units at market rate, or below (depending on the language of their agreements), enforcing a flip tax to return a portion of the proceeds to the Co-op. And there are many, many situations in between those extremes. The City wants to treat them all the same and rewrite history in the process.
New York City needs affordable housing. 'Bad' HDFCs need to be revamped so they serve their shareholders. The NY Post is not a 'friend' of either low-income buyers or current HDFC sellers; they're simply the enemy of De Blasio and any other liberal politician. But retroactively placing stiff income and sale price restrictions on a 5 unit walkup co-op isn't going to generate much affordable housing for anyone. The shareholders, some of whom have lived there for decades, will simply stay put as long as possible and they certainly won't sign a restrictive, intrusive new regulatory agreement just to gain some new tax benefits (and no, for small places in the EV, decades of tax abatements have NOT equaled the value of the units today). It's going to be a shitstorm if De Blasio's people don't start talking to actual HDFCs and hearing their different stories and accommodating their different histories.
"Actually, HPD endorsed the concept of selling HDFC apartments for profit by (a) only having 10 year restrictions, and (b) forcing 60/40 agreements, which lasted for 25 years, whereby 40% of profit had to be given to the City."
ReplyDeleteNeither of those stipulations apply across the board to all HDFCs. Especially in the 70s and 80s, the details of agreements between the City and HDFCs varied a lot from co-op to co-op, as regards (a) and (b).
"Neither of those stipulations apply across the board to all HDFCs. Especially in the 70s and 80s, the details of agreements between the City and HDFCs varied a lot from co-op to co-op, as regards (a) and (b)."
ReplyDeleteThe point was not that all HDFC coops have the same documents. They don't, as the poster correctly stated.
The point was that HPD endorsed the concept of profit by taking a 40% cut for very many buildings. Not all of them, but many. And, for many buildings, they were out from under much of the regulation after 10 years.