Council to revise bill addressing nonprofit housing issues.

The Community Opportunity to Purchase Act (COPA), currently under review by the New York City Council, is being positioned as a novel solution to the city’s affordable housing challenges. However, some critics argue that it could create unnecessary hurdles for the new mayoral administration as it embarks on its affordability agenda.

The proposed legislation would grant nonprofit organizations the first right of refusal to purchase apartment buildings when their owners choose to sell. While the intention behind COPA is commendable, the effectiveness of nonprofit ownership alone in generating affordable housing is questionable. Typically, affordable housing development relies on a myriad of factors including regulatory agreements, rent restrictions, and compliance frameworks—dynamics that also apply to nonprofit entities.

One significant concern comes from the perception that COPA is finely targeted at distressed properties that are at risk of tenant displacement. In reality, the scope of the legislation is much broader, potentially encompassing a wide variety of housing types, from at-risk walkups to stabilized mixed-income developments, as well as luxury apartment buildings.

The criteria used to identify “covered properties” under COPA may inadvertently include many that are compliant with city regulations. For instance, having a single hazardous violation or accruing municipal arrears of ,500 per unit would trigger COPA, impacting not just distressed buildings but also those that are typically well-maintained. This could lead property owners of fully compliant buildings to navigate complex COPA processes for extended periods before they can sell or market their properties.

Moreover, the proposed measures would extend to lenders dealing with properties acquired through means such as foreclosure and short sales, complicating efforts to market these assets. The lengthy timelines and uncertain processes introduced by COPA could reduce the liquidity of these properties and negatively affect their valuations, posing challenges for lenders whose finances are tied to these real estate assets.

If implemented as currently drafted, COPA may inadvertently reduce the pool of potential buyers and lenders, making it increasingly difficult to invest in and renovate aging buildings. In a time of heightened supply shortages, the bill’s structure could further strain the already challenged housing market.

Additionally, the legislation mandates the establishment of a new division within the city’s Department of Housing Preservation and Development, charged with various administrative responsibilities that include certifying buyers and managing a comprehensive tracking system. These requirements could introduce even more complexity into an already intricate housing ecosystem.

To enhance the effectiveness and efficiency of COPA, advocates recommend revising its definitions and focusing exclusively on properties within the city’s distressed buildings programs, those with vacate orders, and buildings with expiring affordability agreements. This refined focus would likely expedite the program while ensuring that critical housing preservation efforts are prioritized.

Further suggestions include creating a pre-qualified list of community preservation buyers and implementing tighter timelines for negotiations. Such amendments could help streamline the purchasing process, ensuring that properties are preserved in a timely manner.

As the Council deliberates on COPA, it stands at a pivotal crossroads. Adopting meaningful amendments could significantly bolster the effectiveness of the legislation, targeting truly distressed properties and better leveraging city resources to meet the housing needs of vulnerable communities. Media News Source.