By Caroline Spivack
Hello, let’s get into today’s special edition on the Community Opportunity to Purchase Act, better known as COPA:
- COPA is slated for a City Council vote this week with new tweaks to the bill.
- The real estate industry is not entirely sold on the changes.
- Council member Frank Morano is fired up about COPA’s imminent passage.
In this edition we mention: Council members Sandy Nurse and Frank Morano, Real Estate Board of New York President Jim Whelan, New York Apartment Association CEO Kenny Burgos, Small Property Owners of New York Board Chair Ann Korchak, New Economy Project Staff Attorney Elena Rodriguez and others.
We Heard
- COPA redux: The Community Opportunity to Purchase Act is slated for a City Council vote this week. It’s the second time in less than a year that the Council is voting on the contentious bill that would give city-approved nonprofits and joint ventures the first opportunity to buy certain distressed multifamily properties when they go for sale. But this time COPA is expected to stick the landing.
Council Speaker Julie Menin’s office told The Real Deal that the bill is headed for a Thursday vote by the Committee on Housing and Buildings, followed by the full Council, after months of negotiations with sponsor Sandy Nurse, the city and the real estate industry to address “various concerns.” Those concerns are largely that the legislation will stifle investment in eligible buildings and slow down sales.
In an interview, Nurse said she does not believe the bill will discourage investment and views its anticipated passage as winning a six-year battle between grassroots organizations and nonprofit housing providers “against the private sector.”
Mayor Zohran Mamdani supports the bill and, unlike his predecessor Eric Adams, does not intend to veto it. Menin could have overridden Adams’ December veto in January, but the Council instead restarted the legislative process, citing legal concerns. Nurse reintroduced the bill in May with changes, narrowing the number of eligible properties and shortening the timeline for nonprofit transactions.
On Thursday, Nurse amended the bill to adjust eligibility-related affordability restrictions and limit the Department of Housing Preservation and Development’s ability to increase the types of eligible properties or grant extensions for nonprofits to submit offers. The Real Estate Board of New York pushed for the changes, but Nurse resisted framing the tweaks as assuaging industry concerns. Instead, they largely came out of conversations with HPD on how to effectively stand up the program, said Nurse.
“This is about how to best operationalize the program versus how to make people in the private sector happy,” Nurse said. “That’s where we’ve spent most of our time negotiating, trying to figure out the nuts and bolts of the back end of this bill.”
COPA applies to buildings with four or more units that meet at least one of several criteria of distress. Among them is that buildings would need to average three or more Class B or C violations per unit or be in the city’s Alternative Enforcement Program. Properties with 100 or fewer units that are subject to affordability agreements with HPD are also subject to COPA. The new version eliminates an earlier stipulation that the affordability agreements must be set to expire within the next two years. The tweak came out of HPD not having comprehensive data to track such properties, said Nurse. The bill also clarifies that those affordability requirements are to be directly managed by HPD, and are not applicable to properties where affordability agreements come from as-of-right programs like the 421a property tax break, or its successor 485x.
Other key changes include cutting language that permitted HPD to add different categories of buildings to COPA as the agency saw fit. City housing officials can instead recommend additions. The latest version limits HPD’s ability to step in to extend the time a nonprofit has to submit an offer from “for more than five calendar days” to “no more than five calendar days.” The bill also adds a two-year statute of limitations for lawsuits alleging a violation of COPA’s rules, but it also now allows those who sue to seek court-awarded compensatory damages.
As of Monday afternoon, Nurse has whipped 32 Council backers for COPA — two shy of a supermajority of the 51-member body, exceeding the 26-vote threshold needed for the Council to approve the measure. The sponsor count also has a notable addition: Kevin Riley, the Council’s land use committee chair. Riley, who became land use chair this year, did not back last year’s version, and neither did his land use chair predecessor, Rafael Salamanca Jr. The Council’s land use chair wields significant influence over development policy citywide, making his backing a broader vote of confidence in the bill.
Elena Rodriguez, a staff attorney at the New Economy Project, a co-founder of the New York City Community Land Trust Initiative, who has advocated for and worked with Nurse on the bill, said her organization is pleased with where COPA has landed.
“This bill is meeting the moment of this really unprecedented affordability crisis,” said Rodriguez. “If we need to push for more, I think that’s a conversation for down the line.”
- Mixed reactions: The real estate industry is divided over COPA. Some landlord groups say the changes sharply narrow the pool of eligible properties, blunting the bill’s impact. Others remain opposed to its core premise that nonprofit housing providers are essentially better stewards of properties despite facing the same market headwinds as private owners.
The eligibility changes in the current bill compared to last year’s version do a better job of targeting the types of properties nonprofit operators and community land trusts may have interest in pursuing, according to REBNY. The latest bill shrinks the number of eligible buildings from roughly 80,000 to 2,000 properties, estimates the trade group.
“REBNY appreciates the constructive engagement and thoughtful leadership of Speaker Menin and Council Member Nurse, which has resulted in a more targeted and practical bill,” REBNY’s Jim Whelan said in a statement.
New York Apartment Association CEO Kenny Burgos acknowledged that the Council has listened to the industry’s concerns but argued that lawmakers are “missing the forest for the trees.” He said their focus should be on helping property owners weather rising operating costs and keep housing online.
“Lawmakers urgently need to shift attention to the core problem: growing expenses with no way to cover costs,” said Burgos. “This is what’s at the root and it’s jeopardizing our existing housing.”
Even with the changes, the legislation “throws a major wrench into the transactional market,” argued Small Property Owners of New York Board Chair Ann Korchak. Property owners who for whatever reason are ready to sell will be on the hook to cover operating costs for the nearly five months COPA adds to the selling process.
HPD may have less authority to unilaterally expand the type of eligible properties under the latest version, but the City Council and the Mamdani administration are exploring expanding some of the programs and mechanisms that would make a building eligible under COPA. That includes a bill from Council member Farah Louis that seeks to increase the number of properties eligible for the city’s AEP program each year, and a related measure that would ramp up penalties under the program.
“Those bills haven’t passed yet but I’m looking at a roadmap of how more buildings will fall into COPA when I look at bills like that,” said Korchak. “And with stepped-up enforcement on the HPD end, and an environment that’s just getting more and more difficult to operate, I’m concerned.”
- Council detractor: COPA has overwhelming support in the Council, but it still has its detractors. Republican Staten Island Council member Frank Morano remains staunchly opposed to the bill and, in a Monday statement, chided the Council for adding bureaucracy to sales.
“Why should City Hall get to complicate that transaction by giving a government-approved organization a special opportunity to step in?” said Morano.
“And if we’re worried about buildings falling into disrepair, why are we making it more complicated for those buildings to change hands?” he added. “We should be encouraging responsible ownership and investment, not creating additional uncertainty.”
The bill sets a worrying precedent for New York City transactions, said Morano.
“What other private transactions will the City Council decide require special treatment for a favored class of buyers?” he said. “Property rights shouldn’t depend on whether City Hall approves of who’s buying or selling.”