New York's Cooperative and Condominium Community

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LEGAL/FINANCIAL

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS

Expiring Tax Exemptions, Other Trends and News from Housing Symposium

Frank Lovece in Legal/Financial on December 12, 2014

New York City, New York State

Dec. 12, 2014

At the panel "Dusk Before Dawn: As Major Programs Sunset in 2015, What Changes Are on the Horizon?" moderator Deborah VanAmerongen of the law firm Nixon Peabody and panelists from New York City government and the political-news site Capital New York said there were no guarantees that 421a and J-51 would be renewed, as they have been in past years. More than $600 million in 421a tax breaks went to condos in 2014, a report presented there said, with more than $400 million going to rental apartment buildings; co-ops took only a sliver. Overall, 421a tax breaks have increased more than tenfold since 2000.

The Doors of Perception

The panel — part of "Reaching New Heights: Leadership, Innovation and Diversity," sponsored by the New York Housing Conference and the National Housing Conference — also addressed the controversial issue of "poor doors," separate entrances for residents living in the affordable-housing part of new luxury condominiums and rental buildings.

VanAmerongen said that existing separate entrances for teachers, firefighters and other workers of modest means would remain but that she anticipated no new poor doors would be allowed. New York City Mayor Bill de Blasio said in August he intends to ban them. The panelists noted that some outer-borough apartment buildings have segregated exterior common areas for affordable-housing residents, who are granted penned-in portions that have gained the name "poor fences."

Republican't

Another panel, "Optimistic or Fed Up: What Can We Expect from the Federal Government in 2015?," moderated by Robert C. Moss, a principal of the financial-services firm CohnReznick and director of its governmental-affairs office, said there will likely be federal budget cuts to housing under the incoming Republican-led Congress. In the meantime, the Federal Housing Finance Agency yesterday directed Fannie Mae and Freddie Mac to again allocate money to two affordable-housing funds, after the agencies' funding had been temporarily suspended under the Housing and Economic Recovery Act of 2008.

The New York Housing Conference, a coalition that advocates for affordable housing, also proposed that New York State capitalize a housing fund with $1 billion in recent settlements from financial institutions. The NYHC said that in addition to meeting housing needs, this would create jobs and community revitalization. The proposed fund would operate similarly to a bank, with a range of loans and credit-assistance products in conjunction with existing affordable-housing preservation and development programs.

New York State Senator Jeffrey D. Klein (D - 34th District) a year ago proposed that the state funnel $750 million in new investments to Mitchell-Lama affordable co-op and rental housing over five years. No specific bill has been introduced in the interim.

 

Reporting by Vincent Lovece

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