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NY state bill would limit massive rent hike at Billionaire’s Row Co-Op

A bill proposed by state lawmakers seeks to forestall skyrocketing rental prices for 25,000 co-op condominium dwellers in buildings with floor leases —  together with some in Manhattan’s wealthiest neighborhoods.

Most co-ops personal the constructing and the land beneath it.

But there are about 100 co-op buildings all through town which have floor leases as a result of another person owns the land beneath the property — together with the 324-unit Carnegie House on “Billionaire’s Row” — at 100 West 57th Street.

The New York state Capitol
The bill proposed by state lawmakers seeks to forestall skyrocketing rental prices for 25,000 co-op condominium dwellers in buildings. AP

When the constructing’s lease is about to run out, an appraiser evaluates the land’s worth, which is then used to barter a rent improve between the landowner and the co-ops.

The landowner might demand a giant improve when the lease expires, correlating with larger market worth of the constructing. Or negotiate a steep sale value for the land.

As The Post beforehand reported, the lease at the Carnegie House expires in March 2025, and the brand new landowner not concerned in crafting the present lease mentioned the rent needs to be primarily based on what they paid for the constructing, quadruple the earlier valuation.

Some old-time co-op tenants say they couldn’t afford such a steep value, and the top of the bottom lease makes it troublesome to promote the residences.

The laws launched by Sen. Liz Krueger (D-Manhattan) and Assemblywoman Linda Rosenthal (D-Manhattan) would limit mass spikes in annual lease funds, very similar to limiting hikes for rent-stabilized residences.

For shareholders in co-op buildings, larger prices would be paid by way of month-to-month and annual rental prices that assist the buildings.

Carnegie House-100 W 57th St., NYC
The lease at the Carnegie House expires in March 2025, and the brand new landowner not concerned in crafting the present lease mentioned the rent needs to be primarily based on what they paid for the constructing. Matthew McDermott

“Apartments in ground lease buildings are generally priced 20-30% below market value, leading some to believe that they are buying an affordable home. However, residents in buildings with ground leases pay higher than average monthly maintenance fees, and often face steep rent hikes once the ground lease expires,” Krueger and Rosenthal mentioned of their memo in assist of the bill.

“Some residents have difficulty selling their home, especially near the end of a ground lease term, since purchasing an apartment with an expiring ground lease is too risky for potential homebuyers,” they mentioned.

They mentioned it’s necessary to forestall householders from going through foreclosures and doable chapter.

“This legislation will protect residents from exorbitant increases and ensure they receive a fair deal when negotiating rent increases once the ground lease expires,” the lawmakers mentioned.

There’s heavy lobbying on each side of the difficulty.

The Real Estate Board of New York and landowners are combating to dam it, claiming its limitations on will increase in leases is a handout to well-to-do-co condominium homeowners.

“This bill is an unconstitutional solution in search of a problem. It is simply bad public policy to give a legislative handout to the millionaire co-op owners who bought their homes at cut prices years ago with full knowledge of these ground lease arrangements,” mentioned Zachary Steinberg, REBNY’s senior vp of coverage.

Murray Hill Coop
There are about 100 co-op buildings all through town which have floor leases as a result of another person owns the land beneath the property.
Sheepshead Terrace (Brooklyn)
The landowner might demand a giant improve when the lease expires, correlating with larger market worth of the constructing.

Krueger disputed the declare that her bill is a bailout for the rich.

“Very few of these co-ops are owned by millionaires. Legal memos show this bill is constitutional,” the senator, who represents the Upper East Side and far of the West Side round Central Park.  

The Ground Lease Coop Coalition (GLCC) will maintain a press convention and advocacy rally in Albany on Tuesday, arguing the laws will defend principally center class and dealing class condominium homeowners.

They point out co-op buildings that would profit from the laws embody the 168-unit Sheepshead Terrace in Brooklyn, whose lease expires in 2052; and the Murray Hill Coop in Flushing and the 72-unit Shoreview in Far Rockaway, each Queens buildings whose lease expires in 2053.

Some critics puzzled why the co-op landlease problem didn’t come up as a part of the reasonably priced housing package deal deal that was permitted as a part of the state funds adopted final month.

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