By Sydney Pereira
A Brooklyn state senator is drafting a bill that would give tenants priority to buy their landlord’s building should the property go up for sale.
State Senator Zellnor Myrie’s “Tenant Opportunity to Purchase Act” would give tenants priority to buy their landlord’s building and turn it into a cooperative if their landlord puts the property up for sale. In another scenario, tenants could also work with a non-profit that would buy and manage the building, according to his office. The policy is a piece of the Housing Justice for All Coalition’s platform.
“As someone who grew up in rent-stabilized apartments and someone that still lives in a rent-stabilized apartment, the dream of ownership has really been elusive for people like myself, my mom, and many of the folks that I represent in Central Brooklyn,” Myrie told Gothamist. The bill would allow renters to buy the building and manage it as a limited equity cooperative, a structure that allows low- to moderate-income New Yorkers to become shareholders and co-own the building with their neighbors. There are restrictions on how much the co-op units could be sold for, aimed to ensure that the apartments are permanently affordable.
“I think the limited co-op equity model—where we share some of that equity, and keep it affordable, and still have the ability to build equity and to have ownership—not only allows us to build some of that wealth, but it really is the strongest anchor against gentrification and displacement,” Myrie said.
Under the legislation, which is still being drafted, landlords would have to notify tenants and local officials that the renters have the opportunity to purchase the building. Tenants would have to be given time to get an appraisal and determine how they would go about purchasing the building. Crucially, the landlord would not be able to sell the property to another buyer if the tenants have established that they are interested.
The policy has existed in Washington D.C. for some 40 years and has resulted in more than 10,000 apartments being purchased by tenants or a chosen developer, according to The Real Deal, which first reported on Myrie’s proposal. An Oakland, California councilmember introduced a similar bill last week—inspired by a group of mothers experiencing homelessness who were arrested after moving into a vacant home to protest the Bay Area’s affordability crisis.
Julia Duranti-Martínez, a campaign coordinator at the New Economy Project, said this type of legislation could potentially help stem the tide of displacement cause by gentrification.
“It’s a potential strategy for preserving affordable housing and stabilizing neighborhoods [and] preventing displacement, especially in communities of color and low-income communities,” Duranti-Martínez added.
A part of the legislation would require setting up a way for tenants to be able to buy the buildings through low-interest loans or other funding options. The financing structure could operate similarly to the Department of Housing Preservation and Development Neighborhood Pillars program, which gives low-interest loans and tax exemptions to nonprofits to buy and rehabilitate buildings.
It remains to be seen how the bill would be drafted to avoid some of the shortcomings seen in the city’s Housing Fund Development Corporation co-ops, or HDFCs. In the late ’80s and early ’90s, the city agreed to buy buildings neglected by their landlords and sell them to tenants. While the system has provided a path to homeownership for low- and middle-class New Yorkers, some HDFCs have exploited the rules by lifting income restrictions and treating the apartments like expensive co-ops. An exploding real estate market has also priced many HDFCs out of the reach for their intended residents.
Myrie feels optimistic about support for the bill, which he intends to introduce this session—especially in the wake of rent reform laws passed in Albany last year—but recognizes the “unprecedented deficits” the state budget faces.
“Anything touching on the budget will obviously be a source of contention, but what we’re really discussing here is investment for long term affordability, which I don’t view as a cost, but really, an investment,” Myrie said.