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Queens Co-ops Weathering the Storm – for Now

Carol J. Ott in Board Operations on April 16, 2020

New York City

April 16, 2020

Habitat spoke recently with three co-op leaders from Queens: presidents Brian Sokoloff and Bob Friedrich, and treasurer Mark Ulrich. All three are members of the Presidents Co-op and Condo Council, which represents 100,000 residents in Brooklyn, Manhattan and Queens. This is an edited version of the conversation.

Habitat: How have your operations and financials changed from pre-COVID-19 days?

Sokoloff: We don't really know what the financial impact of this is going to be. We get a certain amount of our revenue from our flip tax, and the stream of apartment sales seems to have gone down to a trickle. So although we're not feeling it right now, we will in the next few months.

Friedrich: About a month ago, I sent a letter out to all of our co-ops and to our elected officials, asking them to ask the New York City Department of Finance to give us a 90-day delay on payment of our property taxes, which were due on April 15th. Property taxes are probably the single largest component of every co-op's budget. So in order to maintain liquidity, which is really important, we cannot send out that first payment for at least 60 to 90 days because we don't know what our receipts are going to be. 

Habitat: What kind of response have you gotten?

Friedrich: So far, we've been met with silence. And it's quite outrageous that they’re absolutely tone-deaf to the needs of co-ops. We're not saying we're not going to pay the taxes. We understand those taxes are due, but by delaying it 90 days, we're hopefully able to emerge at the other end of this pandemic financially sound and with the ability to pay those taxes.

Habitat: So you haven’t paid the taxes?

Friedrich: We have not paid them. It really is outrageous that the New York City Department of Finance and the mayor and the elected officials have been totally silent on this issue, which affects affordable housing, which is what our co-ops are.

Habitat: What percentage of your operating budget is property taxes?

Ulrich: Our co-op is probably one of the hardest hit by these unfair, back-breaking property taxes: $4.5 million out of a $9 million budget is property taxes. So it's an incredible burden on us, and as Bob said, there's been no accommodations made for co-ops, who are the last stand of affordable housing here in the city.

Habitat: Have you made accommodations if people have difficulty paying their maintenance?

Sokoloff: We actually came up with a questionnaire, anticipating that people were going to ask us to defer their maintenance without a late fee payment. The questionnaire is designed to find out if this is truly a hardship situation. A person needs to demonstrate that they're recently unemployed and not getting unemployment benefits. So we were proactive. I think we got one application. And then the person got unemployment benefits and withdrew the request. 

Habitat: What do you see looking forward?

Ulrich: This crisis does scare me a little bit because it shows you that most people living in this area are living paycheck to paycheck. So while we're happy at the co-op to be on good financial ground, I do worry about my neighbors and fellow people in the city because it seems a lot of people are one paycheck away from being in big, big trouble.

Friedrich: Nobody knows what this experience will do for the real estate market. When these controls are lifted, are people going to be a little jittery about taking on a big expense? In the macro sense, what is this going to do to the real estate market? We don't know.

Ulrich: We've already had in our development a couple of sales in progress that have been paused or the buyers backed out because of the uncertainty. For the developments relying on some sort of flip-tax revenue, the number of sales is going to drive that revenue down as well as, possibly, the sales prices. So it will be interesting to see how that goes. You just don't know.

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