By Assemblymember Harvey Epstein and Senator Cordell Cleare
The next innovation in the pursuit of permanently affordable housing for New Yorkers can be found amongst the glistening luxury high-rise condominiums. These high-rise condominium complexes will also include the next wave of cooperatively-owned and community-controlled affordable homeownership opportunities in New York City — social housing in the sky — if our bill, the recently updated Martin Act amendment (S3566A/A6921A), becomes law.
The overwhelming majority of luxury, high-rise condominiums were developed to comply with state and federal programs such as low-income housing tax credits (“LIHTC”) and 421-a, and required a certain percentage of units to be set aside as affordable for an average of 30 years. Fifty-six percent of multifamily residential units created from 2014 to 2021 involved the 421-a tax abatement, per New York City Housing Preservation and Development data analyzed by the Real Estate Board of New York (REBNY), and 28 percent of affordable units benefitted from reduced taxes through 421-a over the same period according to REBNY’s analysis.
While newer programs are starting to require permanent affordability, many earlier buildings with LIHTC and 421-a include units that have expiring affordability provisions. There are currently no attractive solutions to preserve these expiring and critically needed units and no clear paths to homeownership conversions.
Our bill solves this problem by creating a pathway for these property owners to convert their market-rate rental apartments more easily to market-rate condominiums, in exchange for stemming the loss of these soon-to-expire affordable units. The property owner would also need to commit to permanent affordability for the non-market-rate units.
Our bill also has an option for buildings with permanently affordable ‘inclusionary’ rental units to go condo too. For these buildings, the property owner would need to agree to increase the number of overall units by 10 percent. In other words, thousands of additional affordable homes could be created out of existing market-rate units without additional subsidy or tax benefits being provided to private developers, just by letting market-rate rentals go condo.
Buildings that take advantage of this strategy would increase revenues to the City and State. So in effect, luxury property owners could provide much-needed revenue to New York alongside new and expiring affordable housing units in exchange for the ability to sell their market-rate rental units to their market-rate tenants. And those tenants who do not opt to purchase would receive ‘good cause’ eviction protections as these conversions would require non-eviction plans.
By passing this bill, property owners would help establish an influx of decommodified housing in some of New York City’s most expensive neighborhoods, generate additional tax revenue for the public good, create new market-rate and affordable homeownership opportunities, and support non-profit housing organizations with valuable and sustainable assets that align with their missions.
By adopting S3566A/A6921A into law, New Yorkers will unlock a truly innovative approach to establishing social housing, an approach that creates permanent community assets and equity-building opportunities for former renters, while adding to New York’s revenue. Social housing in the sky is a smart approach to one of New York’s most pressing challenges.
Assemblymember Harvey Epstein represents New York’s Assembly District 74 and Senator Cordell Cleare represents New York Senate District 30.