Council of New York Cooperatives & Condominiums
CNYC Newsletter
CNYC Goals in Washington, Albany and NYC

Published: Winter 2003

CNYC’s legislative goals will improve the lot of housing cooperatives and condominiums without making any demands on fragile federal, state or city budgets. Instead, certain of our proposals have potential to enhance government revenue.

Section 216 of the Internal Revenue Code enables qualifying housing cooperatives to pass on to shareholders the homeowner tax deductions for property taxes and mortgage interest paid by the corporation. The 80/20 provision of Section 216, which requires that a cooperative derive 80% of its revenue from its tenant-stockholders, has obliged certain cooperatives with commercial space to charge less-than-market rents on stores in their buildings. Congressmember Charles Rangel will soon introduce legislation to alleviate this and other 80/20 problems, while still carefully preserving the concept of giving homeowners in cooperatives tax parity with people living in private houses. When these cooperatives are able to maximize the rental value of their commercial space, the federal government stands to gain tax revenue.

Congressmember Carolyn Maloney is the prime sponsor of legislation to enable veterans to obtain the same low-cost mortgages for the purchase of housing cooperatives that they enjoy if they make their homes in condominiums or private houses. In the 107th Congress, she had amassed 76 co-sponsors for this legislation, and Senator Charles Schumer’s companion bill also has co-sponsors. We are optimistic that this important legislation will be passed by the 108th Congress.

As the question of what makes a cooperative or condominium ‘viable’ is debated (see page 8 of this Newsletter) and new offering plans begin to appear, the time is right to consider modifications to the existing state laws governing conversions of rental buildings to cooperative or condominium status. CNYC would like legislation enacted that will ensure resident control of the board in buildings free of dangerous and hazardous conditions, where the sponsors commits to sell units as they become available. All these measures would foster sounder cooperatives and condominiums. It is likely that units would sell readily, adding value to the cooperative or condominium and increasing government revenues from transfer taxes and property taxes.

The Council of New York Cooperatives & Condominiums continues to work for a property tax system that will deal fairly with all New York City taxpayers. Through the Action Committee for Reasonable Real Estate Taxes, it monitors current developments and works to ensure that the current abatement program will continue as long as is necessary for the city to develop and promulgate a permanent tax reform program


A. In Congress

  1. 1. Principle Purpose Test to Replace the Cliff at 80/20.
  2. Allow Federal Income Tax Deduction for unit owners when condominiums borrow for capital improvements.
  3. Allow Veteran the same benefits when purchasing a cooperative as when purchasing a house or a condominium.

B. In Albany

  1. A long-term plan for property tax fairness for homeowners in
    cooperatives and condominiums.
  2. Improved Conversion Laws
    a) Obligation to ‘Complete the Conversion’
    b) Strictly limit sponsor control of elections
    c) Resident Shareholder Control from Closing
    d) Provide for the Curing of Dangerous & Hazardous Conditions.
  3. Legislation mandating the provision of services to tenants or regulating. Quality of life issues must treat housing cooperatives and condominiums as it does as single family homeowners.
  4. Work done on individual apartments can not be the subject of a mechanic’s lien on the building.
  5. Amend Section 240 of the Labor Law to protect cooperative corporations from liability appropriately borne by shareholders or third parties.
  6. A Separate Trial Part in Housing Court for Co-op & Condo Issues
  7. Exempt condominiums with modest taxable income from minimum tax.
  8. Protect Volunteer Boards from Criminal Liability

C. In the City Council

  1. A long-term plan for fairness for all New York City taxpayers,
    including homeowners in cooperatives and condominiums.
  2. When two or more residential apartments that are used as a single dwelling are sold as such, they are to be treated for RPT purposes as the sale of a single unit.
  3. Interest shall be paid by the City on refunds of overpayments.
  4. Legislation mandating the provision of services to tenants or regulating quality of life issues must treat housing cooperatives and condominiums as it does as single family homeowners.
  5. Work done on individual apartments can not be the subject of a mechanic’s lien on the building.

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