Testimony: Ensure Fair, Transparent Co-op Access for All New Yorkers

Testimony: Ensure Fair, Transparent Co-op Access for All New Yorkers

Yvonne Peña

Testimony before the NYC Council Committee on Housing and Buildings​

Thank you to Chairperson Sanchez and the New York City Council's Committee on Housing and Buildings for the opportunity to testify today. My name is Yvonne Peña, and I am a policy analyst at the Community Service Society of New York (CSS), a nonprofit organization that promotes economic opportunity for all New Yorkers. CSS has worked with and for New Yorkers since 1843 to promote economic opportunity and champion an equitable city and state.

As you know, housing is top of mind for New Yorkers. While our city is often described as a city of renters, many New Yorkers also aspire to homeownership. And for some, co-ops are a crucial pathway to achieving that goal.

There are a wide range of co-ops throughout the city, with about half outside Manhattan; many house middle-class New Yorkers; and some assisted co-ops are designed to be affordable for working-class households. For people who are often priced out of New York City's expensive real estate market, co-ops can offer a meaningful opportunity to build equity and establish long-term roots in their communities.

We also know that housing segregation in New York has been driven both by structural factors-such as where New York has historically built subsidized housing-and by acts of discrimination throughout the housing market. According to Comptroller Lander's 2023 report, The Racial Wealth Gap in New York, "Black New York City residents are 30 percent less likely to own a home than white New York City residents."^[1] In 2022, NYU Furman Center's analysis of homeownership across New York City found that while there was a slight uptick in homeownership rates, Black and Hispanic households still had the lowest rates of homeownership.^[2]

An equitable city can have no room for discrimination, including in neighborhoods and buildings that have traditionally been privileged and exclusionary. Intro 407 helps address this by ensuring that co-op boards provide prospective buyers with the reason for any denial-giving applicants assurance that decisions are being made lawfully and not because of discrimination.

Three of our suburban neighbors-Westchester, Nassau, and Suffolk counties-have already adopted versions of co-op disclosure. New York City, a city that prides itself on progressive values, should have been at the forefront of co-op disclosure.

Intro 407-which public opinion polls show is overwhelmingly supported by New Yorkers-is a truly "light touch" measure. It requires no reporting to any government agency; makes no changes to co-op procedures; and does not alter the legal reasons a co-op may lawfully deny an applicant. As prospective buyers must be transparent about their financial and personal histories, co-op boards should be required to do the same when denying someone the chance at homeownership. If a co-op rejects my application, I should be entitled to know why.

For decades, the Equal Credit Reporting Act and implementing regulations^[3] have required credit providers to give specific reasons to anyone denied credit. That is, credit denials-regardless of importance-have long come with disclosure, yet co-op boards can block the sale of a home that both a shareholder has agreed to sell to you and a lending institution has agreed to lend you money for, without providing any explanation.

Like many industries that resist effective civil rights protections, the co-op industry wants to keep their denial reasons secret. Their preference for opacity should not outweigh New Yorkers' right to fair and transparent access to homeownership. Central to CSS's mission is promoting economic security for everyday New Yorkers. Ensuring fair access to co-ops gives more working- and middle-class New Yorkers a meaningful chance to build wealth and stability. The Community Service Society strongly urges the City Council to pass Intro 407.

Notes

1. Office of the New York City Comptroller Brad Lander (2023). The Racial Wealth Gap in New York. Available at: https://comptroller.nyc.gov/wp-content/uploads/documents/The-Racial-Wealth-Gap-in-New-York.pdf, page 9.

2. NYU Furman Center (2022). State of Homeowners and Their Homes. Available at: https://furmancenter.org/stateofthecity/view/state-of-homeowners-and-their-homes.

3. See 15 U.S.C. § 1691(d) and 12 C.F.R. § 1002.9(b).

Issues Covered

Affordable Housing

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