New York's Cooperative and Condominium Community

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Elderly Residents Struggling With Cost of Compliance

Marianne Schaefer in Bricks & Bucks on February 12, 2020

Jackson Heights, Queens

NORC, Local Law 11, city regulations, mortgage refinance, parapet, co-ops and condos.

Northridge, Section 1, a Naturally Occurring Retirement Community in Queens.

Feb. 12, 2020

Co-ops and condos with a high ratio of senior citizens that qualify as Naturally Occurring Retirement Communities (NORCs) are facing a dilemma citywide. Every time the Facade Inspection and Safety Program (FISP) cycle or some other major capital project comes around, boards have to get creative with their financing – or risk pricing out their senior citizens. 

Iris Newsum, board president at Northridge 1, a 330-unit co-op in Jackson Heights, Queens, has faced this predicament repeatedly for the last 18 years. During Newsum’s tenure, Northridge 1, part of a cluster of eight NORC co-ops, has been through three FISP cycles, also known as Local Law 11, as well as numerous capital projects. “We cannot assess, because it would mean that our seniors’ monthly maintenance would increase significantly,” she says. “So we refinanced the underlying mortgage to get the money we needed for Local Law 11. So far we’ve been fortunate – every time, there was some kind of program available that allowed us to refinance at a lower rate. Our total mortgage went up, but our monthly payments stayed the same.” 

For each FISP cycle, the co-op had to come up with an average of $2 million. Newsum feels that lower- and middle-income people are getting squeezed, especially those living in co-ops. “The city is permanently passing new regulations,” she says. “One year you have to bring all the electricity up to code; another year it’s the elevators; and this year we have to bring our laundry room up to code. I accept that, because our buildings were built in 1952. But how does one finance that?” 

The local NORCs consortium tries to help, but there’s no magic bullet. “We have folks who are very concerned about these increases,” says Karen Taylor, director of the Northridge, Brulene, Southridge NORC Program. “That’s when people come to us, looking for ways to reduce their monthly cost of living. We also get phone calls from co-op boards to alert us in advance that they need to raise their fees, and they ask us if we can reach out to those older adults to see if we can assist them to stay safe and independent in their homes.” 

The NORC group helps secure tax abatements and other benefits these elderly shareholders are entitled to, but sometimes that’s not enough. “When those city codes go into effect,” Taylor says, “it can essentially price out longtime co-op shareholders.” 

In 2017, Northridge 1 got ambushed by an unexpected capital project. As engineers were getting ready to do FISP inspections, they were told by DOB that they had to raise the parapet on the roof to bring it up to code. “We tried to fight that because we don’t have any activity up there,” Newsum says. “There is no way for people to get up there.” 

The board met with state legislators, then brought in DOB officials to try to work out a compromise. No go. “They told us the parapets had to be up to code,” Newsum says, “otherwise we wouldn’t pass Local Law 11, which means if we don’t get it done, we get fined. We were forced to increase the height of the parapet.” 

That experience only strengthened Newsum’s belief that something has to change. “They need to find a way to give co-ops like ours – those that are in good shape and always up to code – some kind of easement,” she says. “For instance, make FISP every seven or 10 years instead of every five. That would give us more time to come up with the money. I have no idea what we’re going to do in the next cycle.” 

Newsum is convinced her co-op’s problems are not unique. “This is not an issue just for my co-op,” she says. “This affects all low- and middle-income co-ops in the City of New York. This is not sustainable in the long run. That’s the big picture.” 

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