“You have to consider other shareholders’ needs, and you all pitch in to achieve something together”

Many thou­sands of New Yorkers live in co-oper­a­tives and condo­miniums, which make up roughly 22 percent of the housing stock in New York City. While co-ops get a repu­ta­tion for being exclu­sive; the domain of the well-to-do or the lucky few who pass the inter­view, the truth is that hundreds of thou­sands of New Yorkers live in co-ops that were built or converted for the working and middle classes, including tens of thou­sands of co-op apart­ments that were built by unions. It’s an impor­tant socioe­co­nomic posi­tion to consider as New York City build­ings take on the clean energy tran­si­tion — a signif­i­cant capital invest­ment respon­si­bility that doesn’t fall on all shoul­ders equally. 

Skylight founder Eric Lee recently sat down with Rebecca Poole, a cham­pion for resi­dents of co-ops and condos in New York City. In her role as the Director of Membership at the Council of New York Cooperatives and Condominiums (CNYC), she advo­cates for the inter­ests of these groups in front of legis­la­tors who set state and local policy. In this wide ranging inter­view, Poole discusses the role of co-ops in preserving afford­able housing, what is working as co-ops push to lower carbon emis­sions and the increase the effi­ciency of the oper­a­tions of their build­ings, and her recom­men­da­tions for improving the laws that govern the tran­si­tion to net zero emis­sions in New York City. 

This inter­view has been edited and condensed for clarity

Eric Lee: Hi Rebecca. Thanks for making time to talk this morning. You work at CNYC, can tell us about what CNYC does?

Rebecca Poole: CNYC is a member-funded not-for-profit orga­ni­za­tion that provides educa­tion, infor­ma­tion, advo­cacy for co-op and condo build­ings, and by exten­sion, their home­owners, which we have been doing for over 50 years. CNYC started initially as a group of newly converted co-ops on the Upper West Side and the idea was to develop best prac­tices that could be shared, so that these newly founded boards were not contin­u­ally rein­venting the wheel. Over time, advo­cacy has become a much more impor­tant compo­nent of what we do, equal to the educa­tional and infor­ma­tional component.

EL: One of the things I have enjoyed about getting to know you is that you have a passion and great intel­lec­tual interest in the story in co-ops and condos. How did you get involved in the co-op world? 

RP: I grew up in a co-op. The apart­ment building where I lived went co-op in 1982 when I was in middle school. My parents were involved in the conver­sion as part of the tenants’ asso­ci­a­tion at the time, as were many of my friends’ parents, who also lived in the building. I was aware of their discus­sions about what being in a co-op meant, why people were consid­ering purchasing their units or not purchasing their units, and the thought behind the tran­si­tion from a rental building to a co-op building. After the building converted, I observed the commu­nity that devel­oped as the home­owners came to under­stand how they could improve their quality of life and the finan­cials of the building, looking toward the long term.

There was a very strong commu­nity feeling, and I’ve always iden­ti­fied with what that can bring to every­one’s life. Having a co-op where you have to consider other share­holders’ needs, and you all pitch in to achieve some­thing together, I think, can be very positive.

One thing that is never recog­nized about co-ops is that there is a tremen­dous diver­sity in home­owners. I think today a lot of people view a co-op, or a condo, as a whole. They don’t see the indi­vid­uals that basi­cally make up a tiny town that have lived together over years, and how that has changed. I think that’s the major battle that we have when trying to explain the impor­tance of the finan­cial component.

EL: You grew up in a co-op at a time in the city’s history when co-op conver­sion was an impor­tant story in the city. Why did you stay in the world of co-ops as an adult?

RP: I grad­u­ated from Rensselaer Polytechnic, RPI, with a degree in manage­ment systems and a back­ground in physics. After college, I worked with some­body who was just managing a few build­ings and she was trying to put finan­cial infor­ma­tion right at the finger­tips at boards and, at that time, that wasn’t being done. I helped her build a system to do that. Then I ended up managing one of her prop­er­ties, and, like with most people, I sort of fell into the field and my role, and I loved being a prop­erty manager. I felt I could have a real lasting impact on people’s lives, because your apart­ment — for 90-plus percent of share­holders or unit owners — is your most valu­able asset. So, the manage­ment of that is really essen­tial to most people’s well-being, finan­cially and otherwise.

EL: Let’s talk about one of the things I know is an impor­tant part of your work at CNYC, which is watching what’s happening with the tran­si­tion to clean energy. What’s distinc­tive about co-ops and condominums in the context of this larger story of dramat­i­cally reducing carbon emis­sions in New York? 

RP: I think the fact that co-ops and condos are not orga­nized based on a profit motive is one impor­tant distinc­tion. So improve­ments that may enable a land­lord [of a market-rate rental building] to increase their rent because of the attrac­tive­ness of clean energy and no gas in the building, being able to control your own heat, all those things, don’t come into play the same way for a co-op or condo.

Obviously there’s a poten­tial addi­tion to how much you can get for your apart­ment if it’s been fully converted and some­body else doesn’t have to then pay for the work, but that only comes into play for the indi­vid­uals that might want to sell. But if I have just purchased my apart­ment with the idea that I’m going to be here for the next 30 years of my life, and my chil­dren are going to go to the local public school and I’m going to develop a commu­nity here, then the idea that elec­tri­fying today could improve my prop­erty value when I sell in 30 years, it doesn’t have the same impact. Instead, I have to consider what the expense will do to me now, and I also have to look at the bene­fits of waiting because prices [for new clean energy systems] are prob­ably going to come down eventually.

EL: I think this tension is under­ap­pre­ci­ated that if your view spans over decades, then every­thing changes — prices are going down, the tools are getting better, and it’s happening fast — and your point is, that in some contexts, this leads to an instinct to defer for a minute.

RP: Yes, I think there are just too many unknowns right now. There are so many vari­ables that deter­mine what a building decides to do in terms of their decar­boniza­tion path, but for the majority of co-ops and condos, there are tremen­dous bene­fits to staying nimble, to being able to pivot, and to being able to see how tech­nology changes, to be able to observe how systems have actu­ally worked in real life in similar build­ings over time, and that is not avail­able yet. 

The picture is much broader than decar­boniza­tion. Co-ops and condos have to consider not just the cost of decar­bonizing and trying to help with climate change, but also the impact of climate change on our build­ings, like flooding, for example, and making sure that in 20 or 30 years, our building will, in fact, still be here. So, the energy effi­ciency improve­ments that help us adapt to changing temper­a­ture while keeping our costs as low as possible, that is as impor­tant to us as decar­bonizing. I think that the problem with the way incen­tives and Local Law 97(LL97) are struc­tured is that they don’t suffi­ciently take that into account. 

EL: CNYC has been instru­mental in getting through the changes to the J‑51 tax abate­ment, and they’re really monu­mental: They change the process so that it’s more reli­able, and they dramat­i­cally change the time frame so that a larger number of build­ings are eligible. Does that effec­tively remove your concern about incen­tives versus penal­ties? For build­ings that don’t have the where­withal to deal with the next 20 years through invest­ment, they can do so with incentives?

RP: We’re very grateful to [New York] Senator [Brian] Kavanagh and many other legis­la­tors and to [New York] Governor [Kathy] Hochul for getting the changes to the J‑51 program done; extending it to ten years, putting in a [cost] esca­lator, and giving build­ings an oppor­tu­nity to plan prop­erly, improve their build­ings, and deal with climate change. [It’s] an impor­tant bill, and it will be very helpful to build­ings that qualify. But the belief that just a build­ing’s loca­tion should deter­mine whether or not the indi­vidual share­holders can afford the cost of LL97, It’s over­looking the needs of [some] home­owners. The majority of co-ops and condos that have to comply with LL97 are not covered by this bill and I would argue that most of them do not have the where­withal finan­cially to comply with the electrification. 

These laws do not take into account the economic diver­sity in a co-op or condo. For that, you have to look at every single indi­vidual home­owner. For three years, four years now, we have been striving to get senior citi­zens, disabled home­owners, as well as any share­holder or unit owner that would fall within the 80 percent to 165 percent of AMI or that receives bene­fits to be eligible for a benefit to cover their portion of the assess­ment as related to LL97. We thought that would help those who need it most to not be finan­cially impacted by the work in their building. 

Huge incen­tives are given to single family home­owners all the time who meet these income tests. There are huge amounts of money set aside for single-family home­owners not set aside for co-op and condo owners in the same finan­cial and life circumstances.

EL: Looking at the work that is underway — and I know you read Skylight — there are loads of build­ings that are doing mean­ingful work now. What do you hear from your members and from the tech­nical experts that you work with that gives you confi­dence about how we’re moving forward?

RP: The boiler control systems and the other energy effi­ciency work, the results are looking extremely posi­tive. Buildings have cut their usage tremen­dously, and those systems have a payback period of eight to 12 years, which seem real­istic for most buildings. 

There have been some build­ings with prob­lems, but for most build­ings that have insti­tuted new boiler control systems and changed out chillers and other equip­ment like that, the feed­back has been very posi­tive. Same thing with improving venti­la­tion systems. The build­ings have seen not just a drop in carbon emis­sions, but also a drop in fuel usage, so that’s very impor­tant. I think it’s best prac­tice for co-ops and condos to pursue that work, and to pursue it now. And poten­tially, when or if build­ings go to elec­tri­fi­ca­tion, the energy effi­ciency projects that have been done in the past will be helpful. 

EL: You’ve talked before about ideas that you have about how we might change LL97 to make it sort of more attain­able, more fair and more in line with the circum­stances of people who live in co-ops and condo­miniums. Can you tell us about these ideas?

RP: It’s our posi­tion that co-ops and condos can help the city achieve its long-term decar­boniza­tion goals by pursuing energy effi­ciency measures like the ones that we’ve just discussed, but that the penalty struc­ture and late filing fees need to be adjusted. The city also needs to consider where it doesn’t make sense to require compli­ance with the law. Many, many build­ings are allowed to just take on prescrip­tive measures. [Housing devel­op­ments] with co-gener­a­tion plans that are already oper­ating effi­ciently would be one example. 

We also would like to see garden apart­ment co-ops that have multiple heating plants and large distri­b­u­tion systems exempted from the cost of requiring them to dig up their entire prop­erty to comply with the local law. It’s just not real­istic from a finan­cial stand­point at the current time. That’s going to change, I’m sure, in time, but right now we believe they should be also exempted through 2050. There aren’t that many of them, and they face the largest penal­ties per house­hold of almost all co-ops and condos, so until there’s a solu­tion that’s specific to them that makes finan­cial sense, we feel that they should also be exempted from the penalties. 

EL: Everybody in New York is correctly concerned about afford­ability and housing. How do co-ops and condo­miniums contribute to the afford­ability story? 

RP: Co-ops and condos, by their very nature, being not for profit, have preserved afford­able home­own­er­ship, because the goal of any co-op or condo is to provide the best quality of life at the lowest possible cost. You know what your expenses will be over time, and it’s not like your lease expires and you are hit with a new rent increase. So in this way we main­tain afford­able housing.

We also self-fund the preser­va­tion of New York City’s housing stock, because we’re concerned about the long-term viability of our build­ings, which is crit­ical to the city’s goals. The cost to the city in subsi­dies that is required for new construc­tion is astro­nom­ical, and main­taining existing housing doesn’t have to cost the city really anything, as long as the city starts to look at the expense [to indi­vid­uals] of the local laws that it’s passing and how they all interact to raise the cost of preserving the housing stock. The city has limited funds, we have limited funds, there’s only so much that we can cover.

EL: So in a word, what are the things that co-ops and condo­miniums need to focus on in the next ten, 20 years ahead? 

RP: Co-ops and condos need to focus on ensuring that their building systems and exte­rior envelopes are main­tained and preserved and improved in such a way that they can meet the chal­lenges ahead of us over the next ten to 20 years. If build­ings have issues because of extreme precip­i­ta­tion events and flooding and water backup, they need to make sure that they proac­tively address that because these issues are going to become more prevalent. 

The same thing with the cost of elec­tricity, gas, and oil: build­ings need to make sure that they are oper­ating at peak perfor­mance proac­tively because, as fuel costs rise, that’s one way that we have of main­taining afford­ability, by putting systems in place that will ensure that we’re oper­ating optimally. 

EL: And what do co-ops and condos need from the city in order to be able to deliver?

RP: Co-ops and condos need the city to consider the cost of imple­menting new rules and regu­la­tions oper­a­tionally and finan­cially. So, any new legis­la­tion that is intro­duced that is going to impact the oper­a­tion of a building needs to be viewed in terms of what it will do to a build­ing’s bottom line, and espe­cially how it could divert funds that could be used for preser­va­tion and decarbonization.

For example the side­walk shed regu­la­tions, where now we have to get permits every 90 days. That is going to add $15,000 to the cost of a project, for every façade job. The tenant protec­tion plan require­ments that were put in place prob­ably add $20,000 a year. That is money a building could be spending on other work, if the regu­la­tions and legis­la­tion were drafted in such a way to mini­mize the finan­cial impact on co-ops.

EL: That’s a substan­tial addi­tional cost, repeated over the years through the life­cycle of the projects a building takes on. 

RP: Right! There are tons of exam­ples like that, and the amount seems small when you look at them piece­meal, but when you put them together, it is a lot. 

It’s impor­tant that the city does [what it can] to ensure that we can afford to continue to self-fund the preser­va­tion of our build­ings and keep this housing stock afford­able for future gener­a­tions. Homeownership stabi­lizes commu­ni­ties, it gener­ally improves commu­ni­ties and it enables social mobility. The home­own­er­ship rate in New York City is among the lowest in the U.S., and the housing cost burden is amongst the highest, so it’s defi­nitely in the city’s interest to support afford­able home ownership.