The Community Opportunity to Purchase Act (COPA) under consideration by the City Council is a solution seemingly in search of a problem and would pose an unnecessary roadblock for the incoming mayoral administration as it begins to pursue its own affordability agenda.
COPA would give nonprofits the first right to bid on apartment buildings when owners list them for sale. However, the reality is that nonprofit ownership, while laudable, doesn’t produce affordable housing on its own — instead, affordable housing is generated through a combination of regulatory agreements, rent restrictions, income bands, compliance rules, and monitoring — all of which apply to nonprofits.
In misdiagnosing the problem, COPA proposes a mechanism that will introduce delays, deter investment, and slow production exactly when the city needs more housing built faster. Central to this misunderstanding is the notion that COPA is narrowly tailored to distressed buildings at risk of tenant displacement. The fact is, the legislation is overly broad and could affect a range of housing from distressed walkups to stabilized mixed-income developments to Class A luxury rentals.
COPA’s definition of “covered properties” uses criteria common across the entire housing stock. For example, just one open hazardous or immediately hazardous violation per unit, or municipal arrears of $1,500 per unit, is enough to trigger COPA. These conditions are often temporary and appear in private buildings, new lease-ups, or properties undergoing routine repairs. This means owners of fully compliant buildings will have to navigate COPA for months before listing or marketing their properties.
COPA’s mandates and protracted processes would also apply to a lender selling property it acquired through deed-in-lieu, to properties acquired by lenders because of foreclosure, and to lender approved short sales by an owner in distress. Unfortunately, the extended timelines and uncertainty inherent in the COPA process makes these assets less liquid and negatively impacts their value, which is a problem for lenders whose mortgages are secured by these assets.
Across the board, COPA as proposed will reduce the pool of buyers and lenders and make it harder to recapitalize aging buildings or refinance maturing debt. In a deepening supply crisis, the parameters of this bill will constrain development, further constrain supply, and exacerbate the housing crisis.
The bill would require the city Department of Housing Preservation and Development to create a new division that tracks, enforces, and manages the process. Among other functions, this division would certify and recertify qualified buyers, track every notice of intent to sell or market a property, collect and audit expense reports, manage a citywide posting and notification platform, adjudicate disputes, enforce penalties, and coordinate interagency data sharing.
COPA should be adjusted to make it more efficient and effective.
The Council should start with the overly broad definition by targeting only properties already in one of the city’s distressed buildings programs, buildings with an HPD vacate order, and those with expiring affordability agreements. This would reach the most impactful purchase opportunities where both preserving affordability and protecting tenants is critical. Focusing on properties already in the city’s system would help expedite the program’s administration.
Additionally, to ensure purchasers have the capacity and ability to buy, renovate, and manage a property, the bill should consider defining a group of pre-qualified community preservation buyers through the qualified buyers list and requiring an eligible COPA partnership to include a nonprofit and a developer from that list.
Finally, establishing clear timelines for community buyers to declare intent and then make an offer, limiting negotiations for a given sale to the first qualified COPA buyer that makes an offer, and shortening the timeline for the opt-in period to five days would help ensure the preservation of these properties happens as quickly as possible and is not an open-ended process.
The Council has an opportunity to make meaningful amendments to focus on truly distressed properties and better harness our city’s resources to serve the housing needs of our most vulnerable communities and tenants — an opportunity we can’t afford to miss.
Cestero is president and CEO of The Community Preservation Corp. Goodrich is president of Monadnock Development.
