We were excited to be working with cooperative and condominium multifamily buildings that typically had a few rent regulated units held by a holder of unsold shares. They were able to file a rent increase application for large major capital improvements that they performed and get a tax abatement based on the approved application. Often tenants were able to use SCRIE to keep their current rents as people who haven’t moved for 30+ years are usually over 50 years old.
While the new State legislation (HSTPA 2019) doesn’t specifically address the City abatement, it does make all buildings with 35% or fewer rent regulated units ineligible for rent increase. Very few coops or condos will fall into the narrow window of “enough apartments purchased to be declared effective” and “over 35% still in rent regulation.” This is particularly because so many buildings became effective cooperatives more than 30 years ago, in the 1980’s.
We are saddened that State legislators have effectively blocked cooperative and condominium home-owners from this tax abatement.
The work we have seen performed was often a triple benefit to the economy of New York:
- construction jobs, especially skilled labor jobs, pay salaries for local people
- work has to be done legally with all necessary permits and safety standards to maintain eligibility for benefits and even encourages building ownership to clear old violations and unsafe situations
- housing stock is improved for the current residents and the value of the stock increases
The program encouraged people to do the big job that completely fixed long term problems instead of patch jobs that may not hold up in the long term.
Ed Tristram is president of Ed Tristram Associates, a real estate consulting firm specializing in paperwork related to capital improvements. In the last 35 years, the firm has done thousands of filings related to capital improvements, all for clients who own or manage apartment buildings.