December 2, 2025
For 50 years, UHAB has empowered low- and moderate-income residents to take control of their housing and become homeowners in the buildings where they already live. We turn distressed rental housing into lasting affordable co-ops, and provide comprehensive training and technical assistance to keep these homes healthy and stable for the long term. UHAB has created over 25,000 cooperative homes across the five boroughs, predominantly in formerly redlined neighborhoods of color.
We appreciate the Council’s initiative in holding this hearing today encouraging transparency in co-op decision-making and share many of the same goals. In our role as a technical assistance provider to nearly 1,200 HDFC co-ops across New York City, we help boards make transparent, consistent, and equitable decisions in compliance with local, state, and federal laws regarding the sales of apartments to prospective purchasers. HDFC co-ops are a critical stock of affordable cooperative homeownership which provide an essential foothold for working New Yorkers to be able to become owners when so much homeownership is out of reach.
That said, the stock of HDFC co-ops is fundamentally different from the market-rate co-ops which Int. 407, Int. 438, and Int. 1120 are directed. Most HDFC co-ops operate with volunteer boards and are led by working people of color, often including elders. Many are currently experiencing difficulty complying with new local laws around gas piping inspections and climate upgrades among others. HDFC co-ops also tend to house more people of color, immigrants, and other marginalized groups with lower incomes than market rate co-ops. Recent research also indicates that HDFC co-ops are also more likely to accept voucher-holders compared with other kinds of housing, subsidized and market-rate. While we share the same goals as the Council, these bills would create an undue administrative burden on affordable HDFC co-ops already doing their part to ensure everyone has a fair shot at homeownership. For these reasons, UHAB recommends that all HDFC co-ops be carved out of Int. 407, Int. 438, and Int. 1120.
Most HDFC co-op boards meet monthly, making the timeline for compliance here prohibitive for a volunteer board. With regard to Int. 407, 5 days is overly-punitive even for the most high-functioning co-op board. The additional documentation included here may also be very difficult to compile and gather on the timeline outlined, and appears to be a mismatch in the requirement that individual co-op board members sign off on a certification, but the party responsible for discrimination remains the co-op corporation.
Moreover, the financial compliance package included in Int. 438 is substantial and would be very difficult for an HDFC co-op board to provide on the timeline requested. Particularly, a full accounting of cash flow, debt, and operating expenses and budgets for planned capital projects is a substantial amount of information to have available in 14 days, even with professional management. A significant portion of HDFC co-ops are self-managed and would have an even more difficulty compiling these records. UHAB acts as a bookkeeper for many HDFC co-ops and we see everything from hand-written budgets compiled by elders who have a difficult time using basic technology to automated monthly budgets and operating reports generated by professional management. This is setting up the most vulnerable buildings to hefty fines for noncompliance.
Furthermore, Int. 1120 raises particular concerns for HDFC co-ops, which have specific income restrictions and guidelines for incoming purchasers that must be adhered to based on a co-op’s corporate documents. Int. 1120 would require co-ops to consider applications complete if they fail to respond within 10 days, and consider co-ops to consent to a sale where they have failed to acknowledge notice of receipt within 45 days. This sets up significant legal conflict with an HDFC co-op’s corporate documents which specify specific income (and sometimes asset) criteria for prospective purchasers. Effectively, the law could push an HDFC co-op to accept prospective purchasers who have submitted incomplete applications, are not income-qualified for the unit they are applying to, or may need additional information to confirm assets or other kinds of compliance before approving a sale.
To truly address compliance and transparency around unit sales in HDFC co-ops, we need a comprehensive approach closely coordinated with supervising agencies like HPD and HCR, as well as contracted technical assistance providers. Over 80% of HDFC co-ops will face a financial and regulatory cliff in 2029 when the current property tax benefit for HDFC co-ops (the DAMP Tax Cap) expires. At that point, those HDFC co-ops will need a new regulatory and tax benefit structure to maintain affordability and compliance. There may be meaningful opportunities to encourage HDFC co-ops to comply with some of these goals at that juncture in close coordination with relevant stakeholders.
We would also encourage the Council to consider the following regarding this package of legislation:
- It appears unclear what happens to sales of units owned by the co-op corporation across all three pieces of legislation.
- The carve outs and exemptions should be as uniform as possible across all three pieces of legislation to ensure clarity for compliance.
- Int. 438 could be amended to improve clarity regarding the time frame of financial documents requested. For many of the named categories like operating costs, preserve amounts, and budget, the last calendar year’s documents on file could streamline compliance.
- Int. 407 may create liability concerns for individual board members and with disclosure requirements.
- All three bills may create a legal obligation for co-ops to update their corporate documents, which may require additional time and cost, and should be factored into implementation.
We remain ready to engage with the Council and supervising agencies to keep HDFC co-ops compliant with all local, state, and federal laws regarding nondiscrimination. UHAB provides weekly trainings on a wide range of topics, including Introductions to Cooperative Homeownership for new and prospective HDFC co-op buyers to help them understand the co-op purchase process, and Board Ethics and Confidentiality, Board Roles and Responsibilities, Property Management, and many more that help HDFC co-ops boards stay on top of compliance. We also serve as a technical assistance provider to HDFC co-ops and have staff assigned to every HDFC co-op in the City to help co-op boards navigate unit sales, new shareholder selection, and ongoing compliance with local laws.
We would welcome the opportunity to engage with the Council and supervisory agencies around this matter.