COPA Lobbying Push, Senate Passes Zombie Homes Bill

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Good afternoon, let’s get into today’s news at the intersection of policy and real estate:

• The real estate industry is ramping up COPA-focused lobbying. 
• The State Senate has passed the so-called zombie homes bill, but it’s currently stalled in the Assembly. 
• State lawmakers are looking to reward NYC building owners for promptly taking down sidewalk sheds with a tax abatement — and penalize those who fail to.

In this edition we mention: The MirRam Group, the LeFrak Organization, State Sen. Zellnor Myrie, Assembly member Charles Levine and others.

We Heard

• COPA lobbying blitz: Several of the state’s top lobbying firms are quietly working to shape the City Council’s revival of the Community Opportunity to Purchase Act (COPA) — or thwart it altogether. The MirRam Group, in particular, reported more than $85,000 in earnings in city disclosures during the first months of the year to lobby on COPA, and other policies on behalf of four real estate trade groups and organizations. Those include the New York Apartment Association, the New York State Association for Affordable Housing, the nonprofit multifamily lender Community Preservation Corporation and Constructive Partnerships Unlimited, a nonprofit that provides housing to people with disabilities and older New Yorkers. Industry mainstay the Real Estate Board of New York has contracted at least two firms, Greenberg Traurig and Jenkins, Patrick B. & Associates, to lobby the City Council and Mamdani administration on the issue, at a cost of roughly $90,000 so far this year. One of the city’s most prolific rental landlords is also in the fray: The LeFrak Organization. In March, the company contracted with Fontas Advisors to oppose the bill.
• Senate resurrects zombie homes bill: The State Senate passed a bill Tuesday by Brooklyn State Sen. Zellnor Myrie requiring banks or other lienholders of abandoned multi-unit buildings to fix hazards that threaten the safety of neighbors — the bill’s third passage by the Senate in as many legislative sessions. The Assembly has proved a tougher nut to crack, with Nassau County Assembly member Charles Levine’s version of the bill struggling to make it out of the body’s Judiciary Committee. Current state law already allows local authorities to seize abandoned properties with conditions that pose a health and safety risk. But banks and other lienholders may prevent the seizure by entering into an agreement with the government to make the repair, even though there is no requirement for them to follow through on such arrangements. The bill authorizes local authorities to sue to obtain the property if the conditions are not corrected within 90 days of such an agreement. Myrie’s office estimates that there are at least 2,000 so-called zombie properties in New York City, with Brooklyn accounting for roughly 40 percent. The New York Bankers Association, a regional trade group, has for years lobbied against the bill, with a team from the Albany-based Shenker Russo & Clark cautioning leadership in both the Assembly and Senate against the bill, according to state disclosures. Levine told The Real Deal that once the state budget is settled he’s “confident” the bill will make progress. We’ll keep you posted if that happens.

• Scaffolding scourge: Two state lawmakers are looking to reward New York City building owners with a tax abatement for taking down a building’s sidewalk sheds within a year of erecting them — and penalizing those that keep them up for 18 months or more. A newly proposed bill by State Sen. Erik Bottcher and Assembly member Micah Lasher seeks to tackle the city’s scourge of perpetual sidewalk sheds by creating a tax abatement program to offset the costs of facade repairs for the required scaffolding, or for the property taxes associated with the building for the year the repairs are completed, whichever is the lesser amount. Under the bill, a property owner could be eligible for a whopping 50 percent tax abatement if they remove the structure within three months. That rate would diminish the longer the structure is up, hitting a 5 percent abatement rate low if the scaffolding is taken down 12 months after it was first installed. If a sidewalk shed remains up for more than a year and a half, the property could be subject to a penalty of 10 percent of the property’s tax bill for that year, plus an additional two percent for each month after the 18-month mark. The maximum penalty is 25 percent per year, under the bill. The state proposal comes amid an increased political appetite to eliminate the dark and dingy sidewalk eyesores. The Mamdani administration is proposing its own fix, with the city’s Department of Buildings in the process of reforming facade inspections and sidewalk shed rules to target unnecessary scaffolding. DOB is hosting an online public hearing on new draft rules for the process on April 27.

Have a tip or feedback? Reach me at caroline.spivack@therealdeal.com. 

Bill Tracker

The Catch-Up
Automated vehicles will at some point create a significant real estate opportunity by eliminating the need for vast amounts of parking, allowing spaces at malls, offices and rail stations to be repurposed, writes TRD columnist Erik Engquist.

The head of Harlem Congregations for Community Improvement was jailed after failing to comply with a court order to fix dangerous conditions — like mold, rodents and sewage leaks — in a Harlem apartment building owned by his organization, reports Gothamist. 

A new lawsuit from a group of Manhattan residents challenges the Mamdani administration’s claim that closing the men’s 30th Street shelter and relocating it to the East Village was an emergency and not subject to public notice, The New York Times reports.

State lawmakers passed a fifth budget extender to keep the government running as negotiations for the overdue state budget continue to stall due to policy disputes, reports City & State.

The Kicker“Proposals like this offer short-term relief at the risk of longer-term structural damage to a market segment the city’s economy depends on,” said the Partnership for New York, led by Steve Fulop, in a statement on Gov. Kathy Hochul’s proposed pied-à-terre tax in the boroughs.

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