A bill proposed by state lawmakers aims to prevent rent hikes for 25,000 co-op apartment residents who live in ground-lease buildings, including some of Manhattan’s wealthiest neighborhoods. There is.
Most co-ops own the building and the land underneath it.
But there are about 100 co-op buildings in the city, and the land underneath them is owned by someone else and has a land lease agreement. That includes his 324-unit Carnegie House on “Millionaires Lane” at 100 West 57th Street.
When the building’s lease period ends, an appraiser evaluates the value of the land, and based on that value, the landlord and the cooperative negotiate a rent increase.
The landowner may request a significant increase at the end of the lease term, which correlates with the increase in the building’s market value. Alternatively, you can negotiate an exorbitant sale price for the land.
As the Post previously reported, Carnegie House’s lease expires in March 2025, and the new landlord, who was not involved in the creation of the current lease, said rent would be determined based on the amount paid for the building. He said it should be four times the previous valuation.
Some long-standing co-op tenants say they can’t afford such high prices, and the termination of their ground leases is making it difficult to sell their apartments.
The bill, introduced by Sen. Liz Krueger (D-Manhattan) and Rep. Linda Rosenthal (D-Manhattan), would limit price increases for rent-stabilized apartments, as well as mass hikes in annual lease payments. will be restricted.
Shareholders in co-op buildings will be paying higher costs through the monthly and annual rents that support their buildings.
“Apartments in ground lease buildings are generally priced 20-30% below market value, leading some to believe that they are purchasing affordable housing. “Occupants in buildings often have higher-than-average monthly maintenance costs and face significant rent increases when their ground leases expire,” Krueger and Rosenthal wrote in a memo supporting the bill. Ta.
“Some residents find it difficult to sell their homes, especially near the end of their land lease, as buying an apartment with an expiring land lease is too risky for potential home buyers,” they said. Ta.
They said it’s important to prevent homeowners from facing the possibility of foreclosure or bankruptcy.
“This law protects residents from exorbitant price hikes and ensures they receive a fair deal when negotiating rent increases at the end of their land lease,” the lawmakers said.
There is intense lobbying on both sides of the issue.
The New York State Real Estate Commission and landlords are fighting to block the cap on lease increases, arguing that it is a benefit to wealthy apartment owners.
“This bill is an unconstitutional solution to a problem. It provides legislative relief to millionaire co-op owners who bought their homes at discounted prices years ago with full knowledge of these land leases. That’s just bad public policy,” said Zachary Steinberg, REBNY’s senior vice president of policy.
Krueger disputed claims that her bill was a bailout for the wealthy.
“Very few of these cooperatives are owned by billionaires. The legal memo shows this bill is constitutional,” he said. said the senator representing the majority of the side.
The Grand Lease Cooperative Coalition (GLCC) will hold a press conference and advocacy rally in Albany on Tuesday, arguing that the bill primarily protects middle-class and working-class apartment owners.
They say co-op buildings that would benefit from the law include the 168-unit Sheepshead Terrace in Brooklyn, whose lease expires in 2052. and the Murray Hill Co-op in Flushing and the 72-unit Shoreview in Far Rockaway, both Queens buildings whose leases expire in 2053.
Some critics have wondered why the co-op land lease issue was not addressed as part of the affordable housing package agreement approved as part of the state budget adopted last month.
