New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

NYC MAYOR'S RACE 2021: SHAUN DONOVAN

NYC Mayor's Race 2021: Shaun Donovan

Habitat, the Council of New York Cooperatives & Condominiums and the Presidents Co-op and Condo Council interviewed New York City mayoral candidates about their thoughts on issues facing the co-op and condo community. These interviews were conducted prior to the June 2021 primary.

 

Carol Ott:


I'm Carol Ott, publisher of Habitat magazine. Welcome to our series of mayoral interviews. New Yorkers face many challenges. For co-op and condo board directors and owners, one of the most pressing is how to keep our housing corporations affordable for the hundreds of thousands of folks who own apartments. We've invited mayoral candidate Shaun Donovan to help us understand how he might be thinking about this.

Shaun has a long resume of serving in the Obama administration as secretary of the US Department of Housing and Urban Development (HUD), and as director of the Office of Management and Budget. Prior to this, he served as commissioner of the New York City Department of Housing Preservation and Development (HPD) and the city's Bloomberg administration. Welcome.


Shaun Donovan:


It's great to be with you, Carol. Thanks so much for having me.


Carol Ott:


I'd like to start by getting your thoughts on why co-ops and condos are important to the fabric of New York city. How will you protect them? Have you ever lived in a co-op? Have you ever served on a board of directors?


Shaun Donovan:


Well, Carol, this is very personal to me, as a lifelong new Yorker who spent much of my childhood growing up in a co-op, to my very first job after finishing school back in New York for a nonprofit called the Community Preservation Corporation (CPC) that worked with co-ops and condos to help them make sure they were still affordable, in good condition, fix them up. And whether I was at HPD and making sure that we were investing in all forms of co-ops and condos around the city, and whether the programs like the limited equity co-ops that are so important as starters for so many first-time home buyers, all the way up to my services, HUD secretary, where I helped save co-op city with the single largest loan HUD had ever made in its history. And so I was excited to be back in co-op city, just this past weekend with assembly member, Mike Benedito, getting his endorsement and seeing so many homeowners there who have benefited from our co-ops in New York.


So it really has spanned my entire life. I've seen over and over again the power of affordable home ownership in New York city. Wealth building is the single most important tool for families to be able to send their kids to college, to be able to start businesses, to be able to really invest in the future of their children, with home ownership for them. And so that is central to my thinking about the importance of what we need to do in housing. I feel like home-ownership is kind of the forgotten piece of our housing strategy in this city over the last eight years. And it's something I really want to prioritize as mayor to make sure that we're ensuring everyone can stay in New York when we're so concerned about gentrification. There's no more powerful solution to it than making sure New Yorkers can own their home and benefit from revitalization of communities rather than being forced out.


Carol Ott:


As mayor, you will inherit a city that is on the leading edge of climate mobilization, but to get there is a very expensive proposition for every single building. What will you do, or what can you envision doing to help co-ops and condos meet the city's ambitious carbon neutral goals?


Shaun Donovan:


Well, it doesn't have to be a burden to co-ops and condos, if we were implementing local law 97 the right way. Here's the problem. I think we've had a mayor who thinks we can regulate our way to recovery rather than actually partnering with co-ops and condos. So here's what I would do. I would fully implement a PACE program and ensure that we're using energy performance contracts and other ways to ensure that we're bringing capital to buildings. You know, ultimately we're going to reduce operating expenses if we invest in the right way, and to do that, we can build capital – public-private partnerships like I've done throughout my career, that ensure that we have affordable capital for buildings that can be fully recouped by the savings. And so upfront, there's no investment that would have to be put in by co-ops and condos, if you can do that in the right way.


That's something I've led on both at HPD and when I was HUD secretary. We need real investment. The other thing we need is partnerships with real technical assistance. You know, not every building, not every board is going to be an expert in what are the climate technologies that are going to work the best. Where's the real payback? And so what we need to do is build out partnerships, both inside government, but also with nonprofits and others, just like the one I started at. Community Preservation Corporation has become a leader in ensuring that we're doing smart energy efficiency upgrades, and bringing capital to pay for those. So that partnership between the money to get it done and the know-how, the technical assistance and expertise that I would bring as mayor, that's how we're going to ensure that we can bring every co-op and condo in the city into the 21st century and make them green.


Carol Ott:


Well, that's music to our financial ears. And now let's turn to taxes. For decades, co-ops and condos, to some extent, have asked for the same tax treatment as other homeowners. We haven't gotten it. How will you address the issue of property tax reform?


Shaun Donovan:


Carol, you're so right to raise this issue. As someone who really has worked with mayors in cities across the country, I know we have the most complicated, obscure, unfair property tax system in the country. Even the experts often can't figure it out and we spend years, as you know, fighting about assessments and so many other problems that we have. And so the first thing we have to do is really make the system more transparent and clear and fairer, but we also have to recognize that it's deeply inequitable. Not only do we see that there are huge differences between renters and owners, but as you said, rightly, among owners, they're huge differentials between simple home-ownership and co-ops and condos, and that has to change. And I want to say, other candidates are talking about this issue, but nobody else has actually gone to Albany and gotten good changes in our property tax system. I did, when I was housing commissioner; we improved our property tax system. We've got a long way to go. And I think folks are starting to understand this issue more; I really think this is the moment when we've seen such inequity in the system that we could actually get large-scale reform. I've partnered with Albany again and again, to get big changes made, whether it's on property taxes, or ending homelessness in this city. I'm the candidate who really can deliver on the promise of making our property tax system fair, more equitable, and getting it done within our lifetime. So I'm looking forward to doing that with you, Carol.


Carol Ott:

Thank you. Board members are confronted with the growing number of what's called unfunded mandates, such as building facade, elevator control upgrades, fire safety, and on and on. These costly and competing requirements have impacted the value of real estate and the cost of maintaining buildings. What will you do as mayor to help coordinate these unfunded mandates, so the city, in fact, realizes what it's asking, who's asking for what and how much it's costing?


Shaun Donovan:


You know, Carol, we need change at City Hall. We need a mayor who really sees all of you, all of our co-ops and condos as a huge asset in this city – not as just a source of revenue to tax and regulate, but actually the future of our city and the future of home-ownership and building equity. And so what I would do is restructure the enforcement that we currently have between HPD and the Department of Buildings. Create truly proactive enforcement, where we would work with co-ops and condos and all building owners to help them understand their renovation needs, help them understand and simplify the regulations. And I would partner with organizations that can help us do that as well. Again, this is exactly how I started my career at CPC. We brought together low-cost public capital or grants with private financing.
 We brought technical assistance and we brought tax benefits like J-51 to make sure that we were really investing in and keeping up co-ops and condos around the city. We need a mayor who understands how to do that, and will build a proactive partnership directly with co-ops and condos, and bring a different mindset of really trying to get to the right answer, trying to make sure that we're bringing all of those tools. And I do think J-51, but also programs like the LPLP and others bringing 1% financing that can really help ensure that we're getting substantial upgrades and upkeep, helping you meet those needs without burdening you with monthly charges that are going to get out of control.


Carol Ott:


Thank you. What is your thinking about New York City and New York State's budget challenges, which are immense, and are partially fueled, in fact, a large part fueled by property tax revenue? What kind of thinking do you have to raise revenue to meet the city's needs?


Shaun Donovan:


Well, Carol, it's not just a question of talking the talk on this. I've actually walked the walk. You know, President Obama asked me to take over the $4 trillion federal budget when we were facing the worst budget deficit since World War II. Folks forget about that after four years of Donald Trump, but by the time I finished as budget director, we'd reduce that deficit faster than any time since World War II, while still making huge investments in healthcare, in housing, in jobs, all of the things we need to invest in right now in New York. So I'm the only candidate who really has the experience to take on this moment of fiscal crisis in the city. And here's what I would do – there are basically three key things. The first is we have a huge opportunity to bring funding from Washington DC. This is like a New Deal moment where trillions of dollars is moving to help the economy recover, to help cities recover.
 And too often we've had mayors who don't know how to go to work and do that. New York sends $23 billion more to Washington than we get back in return and services each year, and as as mayor, I would change that. Fiorello LaGuardia was the most transformational mayor in the city's history because he worked closely with FDR, had a deep relationship, and brought a huge share of the original New Deal to New York. I would do exactly that with this new New Deal moment. So that's one, bring federal funding here.

Second, we need to make sure we're actually running government more effectively and efficiently. We did that under Mayor Bloomberg, but we've seen a dramatic increase in the number of city employees even while the city was shrinking. And so we have to be more effective and efficient investing in what's key, but also making government work better with technology. Make it simpler and more easily accessible for co-ops and condos.


And then the third thing is we have to find smart ways to bring revenues – not to raise property taxes, but to make the system more equitable and fair. I do think we should reverse the Trump tax cuts in Washington and get more revenue from DC, but we also have a huge opportunity with congestion pricing, with value capture like we did on the far West side, where we built out the whole number seven subway extension, just with revenues that the city raised from that new construction. And so we have real opportunities to be able to find innovative ways to raise revenues without increasing the tax burden on our co-ops and condos.


Carol Ott:


Thank you very much. If you have any final statements you would like to make to the audience of co-ops and condos that are listening, I would appreciate hearing them. 


Shaun Donovan:


Well, Carol, I would just say this: it's the most consequential election of our lifetimes. This is the time to rebuild from a health pandemic, an economic pandemic, a pandemic of inequality in our city. And I'm the only candidate with the deep experience leading again and again, through crisis. Whether it's in the wake of 9-11 as Housing commissioner, whether it was in the midst of the worst housing crisis of our lifetimes as HUD secretary, rebuilding from Sandy, when President Obama asked me to lead the recovery. And also, as I said, leading through the worst budget deficit we'd seen since seen since World War II and sitting side by side with Dr. Fauci in this situation room to recover from Ebola and Zika. So no one in this race has the deep experience I do to be able to repair and rebuild our city at this moment where we need exactly that kind of leadership. So thank you. Thank you for having me. I look forward to working from City Hall closely with co-ops and condos across the city, and to being your partner at City Hall.


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