Mamdani, Council Common Ground: COPA & J-51 Push

New York City is in for a raft of new housing laws that include COPA and a revival of the J-51 tax abatement.

Lawmakers on the Committee on Housing and Buildings held an oversight hearing Wednesday about a wide range of housing initiatives, including J-51 reauthorization and the Community Opportunity to Purchase Act, which has already garnered the requisite support to pass in the coming weeks and would give nonprofit and tenant groups the right of first refusal when distressed multifamily buildings go up for sale. Both bills will head to a vote where they are expected to receive widespread support among lawmakers, despite industry concerns about their impact on owners.

The oversight hearing featured testimony from Department of Buildings Commissioner Ahmed Tigani, Housing Preservation and Development Commissioner Dina Levy and Cea Weaver, executive director of the Mayor’s Office to Protect Tenants. All three answered Council questions about housing plan programs already in progress while voicing the administration’s support for COPA and J-51 as key levers tenants and owners can use to preserve housing and make more units available.

COPA’s coming

Committee Chair Pierina Sanchez, who is spearheading the reauthorization of J-51 locally, and COPA lead sponsor Council member Sandy Nurse asked pointed questions alongside other lawmakers who comprise the housing and buildings committee. Approximately 2,100 buildings would be eligible for nonprofits, joint ventures or tenant group bids under COPA today, Levy told the panel, noting that the number is subject to change as violations are cleared or accrued.

Nurse brought COPA back from the dead after ex-Mayor Eric Adams vetoed a bid to pass it last year. This latest version calls for a truncated 20-day timeline for potential buyers to express interest and 70 days to submit offers with extensions capped at only five days. Landlords in New York have pointed to other jurisdictions with controversial tenant purchaser preference laws on the books like Chicago and Washington, D.C., arguing that COPA would kill their deals to sell, refinance or secure title insurance on their buildings.

Sanchez and other lawmakers sought a clear definition of which groups the administration would deem qualified purchasers under COPA, which Levy and Weaver defined as mainly mission-driven organizations with strong track records managing affordable housing.

“We’ve had a lot of discussion at today’s hearing about what constitutes a qualified purchaser, and HPD’s ongoing work to evaluate who they should be working with in their preservation programs,” Weaver said. “Really, we’re talking about the same set of metrics and making sure that owners we’re working with have the capacity to manage extremely distressed buildings across their portfolio. At the same time, with this high road distinction, we are also looking to work with owners who want to work with their tenants.”

The analysis for purchasers who will make the cut will likely align with HPD’s current process for determining buyers in its existing preservation program to find qualified management for its own buildings, Levy suggested. That includes conditions across an organization’s portfolio and compliance with anti-harassment or discrimination laws, meaning a group that is eligible could fall off the list in future years, she said.

J-51 expanded

The state revamped the J-51 program in this year’s budget, upping the average assessed value threshold for co-ops and condos to $60,000 to qualify in the program. Two state lawmakers pushed for expanded eligibility to include buildings with up to 90 percent rent-regulated units, a provision that ultimately didn’t make it into the final tax break. Instead, it was kept at 50 percent, leaving many building owners ineligible. New York City lawmakers are hoping to reauthorize the tax abatement, allowing certain multifamily landlords, co-ops and condos to partially offset the cost of building-wide upgrades.

Like COPA, the J-51 bill seems to have broad support among lawmakers as it seeks to renew the tax break for 10 years and increase the benefit cap to cover up to 100 percent of what the city deems reasonable project costs, up from 70 percent in its previous iteration.

Real estate attorneys representing multifamily landlords had criticized the bill Sanchez put forward, saying it wouldn’t help enough distressed buildings in need of expensive repairs. HPD sees that as an issue to be solved through education and outreach to those landlords.

“Under J-51 historically we saw far more co-ops taking advantage of that program than we did rent-stabilized buildings,” Levy said. “So I think part of our goals going forward will be to do really aggressive outreach to make sure that building owners, whether they have vacancies or deferred capital needs, are fully utilizing J-51 and we look forward to working with you to make sure that gets passed swiftly.”

Reauthorizing J-51 will also help building owners to make necessary energy efficiency improvements to comply with Local Law 97, Levy noted in her testimony. Progressives in the City Council recently made a renewed push to cap the amount of renewable energy credits property owners can use to offset their greenhouse gas emissions above those legal limits, setting up a potential fight with the real estate industry.

Housing grab bag

Residential conversion opportunities were also a clear priority among lawmakers, administration officials and advocates, indicating broad support for Council member Harvey Epstein’s bill to create an office of conversion assistance and the mayor’s housing plan’s focus on encouraging more ancillary dwelling units.

The oversight panel also discussed a bill proposing a system for electronically submitting annual building registrations and another requiring signs that explicitly identify owners of multiple dwellings, including the beneficial owners of an LLC or corporation.

In addition to the proposed legislation, lawmakers sought to comb through the brass tacks of the mayor’s lengthy Block by Block plan, questioning the feasibility of its lofty affordable housing preservation and production goals. Sanchez subjected the administration officials to a lightning round, requiring yes or no answers on whether specific initiatives had seen progress since the plan was released in May.

“We have celebrated production targets before, and too often when we look back at what was actually produced, preserved or made affordable for our lowest-income neighbors, government actually fell painfully short of the moment. So today, members of the administration, I ask you to give us reason to believe,” Sanchez said.

COPA and J-51 will head to a committee vote in the coming weeks, then to the full Council.