City council bill would give non-profit organizations the right to first refusal


Manhattan River's Carlina River Council and Brooklyn Council Brad Lander sponsored the bills.  (Getty, Carlina Rivera)

Manhattan River’s Carlina River Council and Brooklyn Council Brad Lander sponsored the bills. (Getty, Carlina Rivera)

The city council is considering two bills that seek to ensure that more affordable housing is created and controlled by non-profit organizations.

One measure, nicknamed the Community Purchase Opportunities Act, would require municipal approved non-profit organizations or community trusts to be given a first chance to purchase residential buildings with three or more apartments once they are put up for sale. The second would create a land bank that would store real estate and then prioritize its sale to community land funds and non-profit organizations.

According to its sponsors, the aim of both bills is to ensure that these properties are taken over by organizations that will maintain or create affordable housing, instead of trying to make a quick profit.

During Tuesday’s hearing, Board member in Manhattan Carlina Rivera, the main sponsor of COPA, said the measure could help prevent private equity companies from buying real estate in distress – such as hotels expelled from business pandemics – and turn them into market housing. The bill requires nonprofits to be given a 120-day lead over offering residential real estate, and the timeframe Rivera has given would give these organizations a better chance of competing. During this time, the seller cannot accept another offer.

“It’s just a matter of giving affordable housing producers a fair chance,” she said. Under the measure, the non-profit organization’s offer must be at least equal to the list of properties and the organization may correspond to competing offers.

Affordable developers in the field of housing do not agree with the preferences of the law by non-profit organizations. Christopher Widelo, of the New York State Association for Affordable Housing, said: “The scope of this law is too broad for only a small number of people to benefit from it.” He added that only a small group of nonprofits have the necessary experience and resources to could independently take over residential real estate. In a written testimony, the New York Real Estate Council stated that although it supports the use of community-based land funds, it should not serve as a “substitute for all public-private partnerships.”

“[The bill] it only assumes that the non-profit organization is a better landlord, “the group wrote. “The exclusion of any private entity and any private and public entity from the list of qualified entities is detrimental and is based on a false assessment of good and bad business practices.”

The group also said the bill raised legal issues, including “the arbitrariness and extravagance of excluding all private entities”.

Trust in community-based land is a type of non-profit organization that acquires real estate, often through long-term land leases, for community benefit, for example by maintaining affordable housing. There are two active community trusts in the city, including Cooper Square CLT and East Harlem El Barrio CLT. In November, El Barrio bought four apartment buildings from the city.

HPD has reservations
Kim Darga, Associate Commissioner for Housing Protection and Development, testified that while the city is excited about the prospect of expanding the use of community land funds, it can be a challenge for NGOs to have the necessary experience and capacity to operate the property. . She also said that the law on land banks could “distort the market” and potentially lead to increased costs if the bank had trouble finding qualified buyers.

Brooklyn Council member Brad Lander, the main sponsor of the Land Bank Act, acknowledged that the measure could lead to additional costs, but said Darga had not shown that it would distort the market. He said the bill would help prevent speculative developers from buying and overturning real estate, preferring permanent affordable housing instead.

Robert Cornegy, who heads the Housing and Buildings Council Committee, noted that he had heard from a number of developers who feared that accounts would unfairly close opportunities for minority-run companies. Similar concerns were raised in connection with another law introduced by Lander earlier this month this would limit the transfer of urban land intended for affordable housing to non-profit developers.

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