NYC Council Approves Bill Granting Nonprofits First Dibs on Distressed Properties

The New York City Council has passed the "Community Opportunity for Purchase Act" (COPA), a bill that requires owners of certain distressed properties to offer them to nonprofit organizations before putting them on the open market. This legislation mandates a 90-day exclusive negotiation period for community land trusts and other eligible nonprofits.

The bill, championed by Council Member Sandy Nurse, is a revised version of a prior proposal that faced significant opposition and was vetoed by former Mayor Eric Adams. The current iteration has been narrowed in scope, significantly reducing the number of properties affected compared to the previous version.

The Real Estate Board of New York (REBNY), which had previously opposed the bill, acknowledged constructive engagement with city officials on the revised legislation. "REBNY appreciates the constructive engagement and thoughtful leadership of Speaker [Julie] Menin and Council Member Nurse, which has resulted in a more targeted and practical bill," said REBNY President James Whelan.

This updated version is expected to impact fewer than 2,500 buildings in the city, a substantial reduction from the over 10,000 properties included in the initial proposal. Many of these buildings are already under the management of the city's Housing Preservation Department.

While the bill grants nonprofits a first right of refusal, property owners can still proceed with selling on the open market if a deal is not reached within the 90-day period. Council Member Nurse stated that the changes were made to address potential legal challenges and strengthen the bill for city agencies, asserting that the previous version was "legally sound."

However, the legislation has drawn criticism from some property owner advocates. Ann Korchak, board president of Small Property Owners of New York, argued that COPA would negatively impact renters, owners, and affordable housing efforts. "COPA, in any form, is a destructive housing policy for renters, owners, and affordable housing," Korchak stated. "COPA will devalue buildings, forcing small, often immigrant and multigenerational, owners to sell their buildings for pennies on the dollar." She added that giving nonprofits a right-of-first-refusal could exclude conventional buyers with the financial capacity to make immediate improvements to struggling properties.