Local Leaders Seek Temporary Easing of Federal Mortgage Regulations on Condominiums and Cooperatives
Community Board 1 (CB1) is calling upon elected officials to intercede on behalf of condominiums and cooperatives, where the economic downtown triggered by the pandemic coronavirus has resulted in distressed finances.
In a resolution enacted at the Board’s March 23 meeting, CB1 notes that single-family homeowners are amply protected by last year’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, federal legislation that requires “forbearance” for up to 180 days (and renewable for an additional 180 days) from making payments on mortgages overseen by the two primary federal home lending clearinghouses–the Federal National Mortgage Association (“Fannie-Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie-Mac”).
But the same law contains few protections for condominiums or cooperatives, which are the primary forms of home ownership in Lower Manhattan, and in many urban areas around the United States.
In particular, there are financial challenges faced by buildings comprised of owner-occupied apartments that have no precise analogue to either single-family homes or rental apartment buildings. Fannie-Mae and Freddie-Mac impose unique “Qualified Lending Requirements” on such dwellings, with rules governing how many apartments within a building may be owned by a single entity, such as the sponsor. The federal mortgage overseers also scrutinize the balance sheets of such buildings, demanding that they meet thresholds for cash on hand, to fund both capital and operating budgets. These are known as “warrantability” thresholds.
In ordinary times, these issues rarely become obstacles to buying or selling homes within residential towers. But during the pandemic-induced recession, more buildings have run afoul of these regulations, which makes apartments within them out-of-bounds for federally guaranteed mortgages. That, in turn, means that many banks will not offer loans on such dwellings. (It is still possible to obtain a mortgage without a federal guarantee, but it is more difficult, expensive and time consuming, and usually comes with less attractive terms than one sanctioned by Fannie-Mae and Freddie-Mac.)
This dilemma is particularly acute for cooperatives, where it is common for the building’s budget to be funded, at least in part, by “flip taxes”—a levy imposed by the building whenever a unit is sold, consisting of a fixed percentage of the apartment’s price.
As the pace of sales have slowed, and the prices for those transactions that are consummated have trended dramatically lower, the revenue generated for cooperatives by flip taxes has plummeted. At the same time, both cooperatives and condominiums have seen an uptick in delinquencies on common charges, further constricting their cash flow.
The CB1 resolution notes that, “if left unchecked, the precipitous drop in revenues supporting co-op and condo buildings’ operating budgets could lead to a ‘death spiral,’ in which the lack of mortgage availability further dampens demand, which leads to a larger sales-related income deficit for coops or condos, pushing them further out of compliance with Fannie Mae and Freddie Mac requirements, which places additional constraints on mortgages.”
The same measure calls for elected officials to enact a three-point plan to alleviate these challenges. First, CB1 wants, “our elected officials to work at the federal, state, and local levels to provide regulatory relief where appropriate by relaxing prohibitions or requirements… that govern co-ops or condos in terms of budget flexibility.”
Second, the Board wants, “our congressional delegation [to] pass legislation to address financial shortfalls not currently provided for in the Cares Act, so that there is parity between single family homeowners and those who collectively contribute to the success of… a cooperative or condominium.”
And finally, the resolution calls upon elected officials, “to prevail upon Fannie Mae and Freddie Mac, for the duration of the pandemic, to modify Warrantability requirements, so as not to penalize residential units for sale in buildings that fail Warrantability requirements for reasons that are specifically attributable to the temporary economic effects of the pandemic.”
Re: The New Roaring Twenties
New York City Won’t Be The Same, But It Will Be Great
(The BroadsheetDAILY April 8, 2021)
To the editor:
Andrew Greenblatt could be right. New York City could rebound.
The question, as always, is rent.
My husband and I moved to Lower Manhattan in 1972 when the city was on its knees. (Ford to NY: Drop Dead). Cops were nowhere. There was “panic” in needle park. etc. But landlords with empty buildings were begging people to move in. Even if illegally. \We signed a commercial lease for our loft in what would become Tribeca because all the butter and egg and spice people had fled.
The big question today: now that the big corporations have gone, will landlords or the city LOWER rents or legalize buildings across the city to allow AFFORDABLE rents for artists and others to move in? We had to beg and plead for the Loft Law to make us legal. It took years.
Let’s not wait. The city right now has tons of empty office space that can never be filled. Create incentives NOW for landlords to create mixed use affordable housing in those buildings NOW.
Jean Bergantini Grillo
To the editor:
Great commentary by Andrew Greenblatt on New York’s resurgence. Ready to join the roar.
To the editor:
What joy to read this uplifting analysis! As a longtime resident, I agree with Andrew Greenblatt; Lower Manhattan will always bounce back. Thanks for everything, Broadsheet, but particularly for remembering that the spirit of our neighborhood is immortal.
M. M. De Voe
re: The BroadsheetDAILY 4/7/21
“Community Board 1 Discussion Tonight Will Examine Battery Park City Authority Finances”
To the editor:
Good luck, my former BPC condo owners. I saw the writing on the wall, sold and left.
In 2011, our ground rent doubled instead of tripled and the paper described it as a give away to the “fat cats” owners of Battery Park City. City politicians fall all over themselves to protect the renters ($480,000 per unit in saved PILOT???!!), but the owners can go fend for themselves.
State and local politicians are looking to use the PILOT to fund other projects and budget gaps. Meanwhile the owners (like I was) invested our life savings and invested in the City. Fat cats when most of us are living in 600 SF cookie cutter one-bedrooms.
Sorry, guys, it’s a beautiful community, but I could not afford to grow old there. Best of luck to all of you.
OPINION AND ANALYSIS
The New Roaring Twenties
New York City Won’t Be The Same, But It Will Be Great
A chorus of New York naysayers are telling us that the City will never be the same after this pandemic. They are right—but not in the way they think. New York City is on the cusp of another “Roaring 20’s,” and I, for one, can’t wait.
One hundred years ago we were recovering from a pandemic (the Spanish Flu) and a Great War that spread fear and death. New York is facing a similar trauma. Loved ones lost are never coming back. Some of us have lost jobs, homes, or even just our favorite restaurants. A century ago, when it was all over, people were ready to let loose—and let loose they did. I believe that a similar spirit is about to start a recovery that will reshape the city in exciting ways, creating new opportunities for many.
Monica Bill Barnes and Robbie Saenz de Viteri return to Brookfield Place for It’s 3:07 Again, an interactive digital dance theater experience where the audience choose their own path, dropping into the interior life of people in public with a click. With barriers and distance between us, we look inward for real interaction. Step into the big movements and small moments that dwell inside of New Yorkers as they pass through Brookfield Place a year into living with a pandemic. You have thirty minutes, there’s no way to see it all. Free
Online concert. During trying times, music stills our souls and provides a healing grace. Throughout the season of Lent, Comfort at One will present performances that are inspired by the Gandhi quote: “In the midst of darkness, light persists.” These concerts include improvisations by Julian Wachner, light-inspired Bach cantatas, our 2014 Lenten “Lamentatio” series featuring NOVUS NY and The Choir of Trinity Wall Street, new performances from the Trinity Youth Chorus and St. Paul’s Chapel Choir, and new virtual content on Fridays from our extended family of artists. Free
Community Board 1v Land Use, Zoning & Economic Development Committee
1) Pace University Master Plan – Presentation by Ibi Yolas, VP of Facilities and Capital Projects, Pace University & SLGreen
2) Planning Together (Int. 2186 [Johnson], A Local Law to amend the New York City charter, in relation to requiring a comprehensive long-term plan) – Discussion with Guest Speakers:
George Janes, AICP, George M. Janes & Associates, Chris Walters, Land Use Policy Coordinator, Association for Neighborhood and Housing Development and Lynn Ellsworth, New Yorkers for a Human-scale City
Upcoming Community Board Meetings This Week
4/13 Youth & Education Committee – 6:00 PM
4/14 Large Venue Working Group – 6:00 PM
4/14 Licensing & Permits Committee – 6:15 PM
4/15 Quality of Life & Service Delivery Committee 6PM
4/15 Quality of Life & Service Delivery Committee – 6:30 PM
The Plots Thicken
Liberty Community Gardens Wait Listers Will Finally Get Their Hands Dirty
Mounded with dark soil, teeming with earthworms, 26 new community garden plots are ready for action at the corner of Albany and West Streets. Thanks to the deconstruction of the Rector Street Bridge and ramp in 2019, and the support of the Battery Park City Authority, the New York State Department of the Transportation and the New York City Department of Transportation, Liberty Community Gardens (LCG), a cherished part of the neighborhood, has expanded by about a third.
Liberty Community Gardens were founded in 1987 by local residents with the guidance of Battery Park City Parks. Initially, there were 24 plots on the north and south sides of Rector lawn.
Museum of Jewish Heritage Commemorates Losses Among Community of Survivors
Battery Park City’s Museum of Jewish Heritage is marking the occasion by launching a new tribute page that shares the stories of people who survived the Nazi campaign of genocide, but perished during the ongoing coronavirus pandemic. To read more…
The Fate of a Neighborhood
State’s Highest Court Blocks Suit by Brewer, Chin Opposing Two Bridges Plan
On Tuesday, the New York State Court of Appeals effectively ended a lawsuit begun in 2018, in which Manhattan Borough President Gale Brewer and City Council member Margaret Chin sought to compel the administration of Mayor Bill de Blasio to subject several massive residential developments planned for the Lower East Side to the highest-possible degree of legal scrutiny. New York’s highest judicial review panel upheld an August ruling by the Appellate Division of the New York State Supreme Court, which itself had overturned a 2019 lower-court decision favoring Ms. Brewer and Ms. Chin. To read more…
How Much Is Too Much?
CB1 Discussion Will Examine BPCA Finances
Tonight (Wednesday, April 7) the Battery Park City Committee of Community Board 1 (CB1) will host a review of the finances of the Battery Park City Authority (BPCA). To participate in this online meeting, which starts at 6:00 pm, please browse: https://live.mcb1.nyc.
The BPCA’s finances are of particular interest to condominium owners, for whom the cost of owning a home in the neighborhood is becoming increasingly prohibitive. These themes are closely linked because of the exotic nature of property ownership in Battery Park City, where homeowners, landlords, and developers do not own outright the acreage they occupy, but instead lease the space (through the year 2069) from a government agency—the BPCA—in exchange for yearly remittances of “ground rent,” as well as so-called “payments in lieu of taxes” (PILOT). To read more…
Harboring Good Will
Highly Regarded Maritime School on Governors Island to Expand
A years-long campaign by Lower Manhattan community leaders, elected officials, and parents came to fruition on Monday when an agreement to expand the Urban Assembly New York Harbor School on Governors Island was released.
The Trust for Governors Island and the School Construction Authority (SCA) announced that several long-standing priorities will be addressed in one package of funding: the Harbor School will grow into a building adjacent to its current home, where it will have room for an additional 18 classrooms, a pool and a gymnasium. To read more…
Getting Squeezed Coming and Going
Washington Okays Congestion Pricing Program that Local Leaders Fear will Penalize Lower Manhattan Residents
The prospect of Lower Manhattan residents being penalized for the privilege of driving to or from their homes moved a step closer to reality on Tuesday, when the Federal Highway Administration (FHWA) sent word to City and State officials that they would allow the congestion pricing plan, devised by Mayor Bill de Blasio and Governor Andrew Cuomo, to move forward under the less rigorous of two possible environmental oversight standards.
The FHWA, an arm of the federal Department of Transportation, decided to allow New York to move ahead under the looser benchmark of an environmental assessment, rather than a full environmental impact statement. “An Environmental Assessment generally requires less time to complete than an Environmental Impact Statement, should no significant impacts be identified,” the agency said in a statement. To read more…
Pearl of Wisdom
Brewer Pushes for FiDi Thoroughfare to Be Made Pedestrian-Friendly in Perpetuity
Manhattan Borough President Gale Brewer is pushing the administration of Mayor Bill de Blasio to expand and make permanent a trial implementation of the Open Street program in Lower Manhattan. Since last summer, the City’s Department of Transportation (DOT) has each day restricted vehicular access to Pearl Street, between Broad Street and Hanover Square, from 11:00 am to 3:00 pm and again from 5:00 pm to 11:00 pm To read more…
Alliance For Downtown New York Hosts 2021 Shred-A-Thon
And Clothing Drop-Off
After a year like the one we all just endured and the promise of a brighter day emerging, the idea of “spring cleaning” takes on new energy and meaning.
Now is the time to round up all the old clothes and unwanted documents that have been piling up and bring them over to Fulton Street (between Cliff and Gold Streets) for the Downtown Alliance’s annual dual shred-a-thon and clothing drop-off Saturday, April 17 from 9 a.m. to 1 p.m.
A shredding truck parked on Fulton Street will securely dispose of and recycle all your sensitive documents, tax receipts, junk mail and old bills.
The Alliance is also partnering with NYC clothing recycler Wearable Collections, which is providing a bin to collect all dry, used clean clothing including shoes, sneakers, belts and hats, as well as household items such as linens, towels and handbags.
Rain or shine, the Alliance will be there to dispose of your much-loved old outfits and no-longer-needed memories, minus a few items (e.g., carpeting, rugs, bath mats, comforters, pillows, large luggage). This spring will be even sweeter when you’ve got some extra space.
Local Leaders Get Irredentist to Reclaim Park Space Dispossessed for a Decade
Community Board 1 (CB1) wants the administration of Mayor Bill de Blasio to give back park space beneath the Brooklyn Bridge that was “temporarily” closed more than a decade ago. The area, informally known as “Brooklyn Banks,” is an iconic destination for skateboarders, because the streetscape provides an undulating terrain of ramps, rails, ledges, and jumps. Long before any of these stunts were legal in New York, boarders from around the United States would come to the City to compete there, and connect with one another. To read more…
CLASSIFIEDS & PERSONALS
Swaps & Trades, Respectable Employment, Lost and Found
More Survivors than Responders Now are Submitting Claims
The September 11th Victim Compensation Fund (VCF) has released its annual report for 2020, which documents some significant developments.
Over the course of its ten years of operation thus far, the VCF has awarded $7.76 billion to more than 34,400 individuals who have suffered death or personal injury as a result of the terrorist attacks of September 11, 2001 and their aftermath. The vast majority of these injuries take the form of illness caused by exposure to toxic materials that were released by the destruction of the World Trade Center.