If a co-op/condo has an unsold shareholding with one or more rent controlled and/or rent-stabilized apartments and the holder of unsold shares obtains an MCI rent increase order, now there is a significant financial benefit for the building as well — a large credit on property taxes.
Example: Cooperative has 55 units, gets a $400,000 exterior restoration job. The Holder of Unsold Shares has 6 rent stabilized apartments, and applies for and gets a rent increase. (That’s a minor benefit for the building since improved cash flow on an unsold shareholding increases the value of all apartments.) Now the building can also get a one-time tax abatement of $151,888.89 — 22% of the cost of the work.
This is not a J-51 abatement (which sometimes come with many strings attached) but a new “MCI Abatement” arranged by NYC Dept of Finance and the NYC Housing Division (DHCR). It goes to the building — not the Holder of Unsold Shares — since the improvement was paid for by the building through special assessments, mortgage proceeds, etc.
In the last 25 years, Ed Tristram Associates has arranged over 1,000 MCI rent increases , as a consultant to owners and managers of rental buildings and unsold share holdings. Call us at 212-979-8720 with questions about what’s eligible, time requirements, how the math works, etc.