Small Property Owners in New York City Await Mayor Adams’s Potential Outgoing Veto on Housing Grab

Mayor Eric Adams has fewer than 48 hours to veto far-reaching housing legislation that opponents say will hand over private multi-unit properties to government-approved buyers before permitting owners to take it to the open market, stifling competition and property values.The New York City Council passed the Community Opportunity to Purchase Act the week before Christmas. It gives the Department of Housing Preservation and Development authority to designate community groups, nonprofits, and some for-profit groups as “Qualified Entities” with the first right to make an offer to purchase multi-unit buildings and a generous timeline to close the deal. The legislation, which gives the city housing department ample latitude to modify its own rules, states that if the deal with a city-designated group falls through and the owner gets another offer within a year, the original bidder must be given a right of first refusal under the new terms. The law is designed to cover buildings of four or more units that are distressed, subject to foreclosure, or whose affordability restrictions are scheduled to expire within two years. Properties in which owners live in the building are not bound by the restrictions.Proponents of the legislation, which mimics a similar law in San Francisco, say it is aimed at letting nonprofit and community groups compete with investors. “By giving qualified purchasers a first chance to bid on distressed properties in city enforcement programs, COPA will help level the playing field & stop the cycle of speculation & rising rents,” the councilwoman who sponsored the legislation, Sandy Nurse, posted on X after its passage.But opponents say the legislation is designed to stymie the free market, even though the legislation allows the property to be sold at fair market price.“It just is an opportunity for the government to inject itself into transactions that they’ve never been a part of. They are going to tell me as a property owner who I can sell to and how long I have to wait to complete that transaction, and it’s incredibly unfair,” the president of the board of the Small Property Owners of New York, Ann Korchak, posted in a video. Her organization represents owners of four-20 unit-size buildings in the crosshairs of the bill.The head of the tax incentives and affordable housing unit at Rosenberg and Estis, Daniel Bernstein, told the Sun that a lot of disputes could arise based on how the housing department chooses to enforce its rules. “The qualified entity could in theory allege procedural non-compliance or dispute whether an offer was bona fide. There are situations you could imagine where an owner might dispute whether their property is even covered by COPA in the first place,” he said.He added that the law creates a lot of uncertainty for sellers whose failure to comply with the rules could subject them to litigation and financial penalties.“As written, COPA doesn’t remove the cloud of a potential litigation that could be brought by a qualified entity who alleges that the process wasn’t followed, and it might end up disputed. So, while there is a process that is to be followed, uncertainty about that process, lack of clarity as to when it’s truly resolved so that an owner can sell without concern,” Mr. Bernstein said.The legislation is part of a package of bills that the mayor may veto on his final day in office. Other housing-related bills include legislation to require that a certain percentage of affordable housing units contain two or three bedrooms and that landlords provide cooling units to tenants. A spokesman for the mayor’s office, Daniel Marans, was vague about the mayor’s plans, but told The New York Sun that Mr. Adams will announce where he stands on COPA and a host of other bills “passed at the last minute” before the December 31, 11:59 p.m. deadline.If Mr. Adams does veto the legislation, the city council will need to come up with a two-thirds majority to override it in the next 30 days. With a change of council composition, that may not be possible, though incoming Mayor Zohran Mamdani has expressed support for the act.

Small Property Owners in New York City Await Mayor Adams’s Potential Outgoing Veto on Housing Grab

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