Assembly Member Al Taylor's HDFC Update

The Take-A-Way....1. You, the HDFC shareholders helped the City come back from the fiscal crisis of the 1970s. The City was desperate to get rid of over 10,000 buildings that slumlords abandoned in terrible shape, and you saved approximately 1,300 of them citywide. You also helped restore your neighborhoods, and your schools. And, by restoring your neighborhoods, you helped restored property values and helped restore the City’s tax base, so the City could recover financially. So you didn’t just help yourselves, you helped the City as a whole, and we owe you a huge thank you! 2. In 1989, the City created “DAMP” tax exemption, because you were sold buildings in disrepair, you were being charged full taxes, and HDFCs were in financial distress. The DAMP tax exemption doesn’t expire until 2029, and I will see to it that the City council does not revoke it, and doesn’t require you to sign a Regulatory Agreement to get it! The DAMP tax exemption allows you to keep your buildings affordable, by keeping your taxes low. The DAMP tax exemption passed in 1989 never had a requirement for a Regulatory Agreement, and we don’t need to change that. At some point the City Council will need to create a new DAMP tax exemption for the next 40 years, but we can do so without a requiring a Regulatory Agreement. We also need to make sure that any HDFC that doesn’t get the DAMP exemption, or doesn’t get any benefit from it because its property values are low, can at least get the co-op/condo tax abatement that market rate co-ops get. 3. HPD proposed that the City Council actually revoke your DAMP tax exemption early, before 2029. HPD proposed that the City Council then replace your DAMP tax exemption with a new one that would require you to sign a Regulatory Agreement. HPD said that their plan was that if you didn’t sign their new Regulatory Agreement, you would be charged full real estate taxes, and many HDFCs can’t afford to pay full real estate tax. HDFC shareholders have overwhelmingly rejected this Regulatory Agreement, and I hear you. It’s not right for you to be threatened with losing your DAMP tax exemption before 2029. You are homeowners and your property rights must be respected, just like any other property owners. Most of the HDFCs were never required to sign regulatory agreements. Only HDFCs that were created after 2003, or were given tax forgiveness, were required to sign Regulatory Agreements. Most HDFC co-ops had limited restrictions from HPD, such as 10 years. We need ensure that HDFCs have the option to stay affordable, without compromising their property rights, so they will decide to remain as affordable housing. The best way to ensure that HPD and City Hall keep their promises to HDFC shareholders is to fight to protect your property rights and preserve the tax break that allows you to remain as affordable housing for you and your neighbors. 4. HPD never intended to regulate HDFCs forever. HPD’s goal was to get rid of over 10,000 buildings, not keep them or control them. There were time limited restrictions, such as 10 years, just as with so many other HPD programs. We should encourage you to remain as affordable housing, without taking control of your buildings. Most buildings will probably need to stay affordable with some restrictions, because your residents need to keep their maintenance charges low. You know what’s best for your buildings, and you should decide what’s best for you. 5. The HDFC Coalition has created a counter proposal to HPD’s proposal. The HDFC Coalition got feedback from over 1,000 HDFC shareholders before finalizing it. They presented it to HPD in February of this year. The Coalition’s proposal is for a fair “DAMP 2.0” that would be optional, and extend the tax break you need to stay affordable for another 40 years. HPD has not yet come forward with a revised proposal, although they had said that they would come out with a new one over the summer. 6. Final Thoughts… You have worked for decades to save buildings that were abandoned You have helped yourselves, your communities, and the City as a whole You are homeowners, and we will protect your property rights You have the right to build generational wealth to keep your family out of poverty You were never asked to sign a Regulatory Agreement when you agreed to take on these abandoned buildings and save them We will fight for a tax break that keeps your homes affordable without having to sign a Regulatory Agreement Price caps were never part of the program and shouldn’t be required by the City now We don’t need to create tension inside your buildings by causing the apartments of newer shareholders to be worth more than apartments of original shareholders. 165% AMI is an income restriction that HPD has published for decades, and that is a fair restriction for buildings that receive a tax break to remain affordable. Remember that if your building’s shareholders want to adopt more restrictive income limits, you can do so already, without signing a Regulatory Agreement All HDFCs are different, so no “one size fits all” We at the City Council respect your right of Self Determination Thank you to the HDFC Coalition for organizing and helping us to understand your issues and your buildings!