Surveying and Evaluating Tenant and Community “Opportunity to Purchase” Proposals
Legislators and advocates in New York have been considering a range of proposals to provide tenants and qualified not-for-profits with an opportunity to purchase property from the owner when the property is being sold. To help policymakers understand these differing proposals, the NYU Furman Center include in this brief four sections. First, the brief includes a survey of the differing proposals introduced most recently in the New York State Assembly, the New York State Senate, and the New York City Council. Second, the brief includes a survey of how existing opportunity to purchase regimes operate in three other cities – Washington, D.C., San Francisco and Chicago. This section of the brief will also describe some differences between these programs and the proposals in New York. Third, the brief aims to evaluate the potential impact of the various proposals, including how many real estate transactions would be impacted by the proposals. Fourth, the brief provides a set of considerations for policymakers and advocates working to advance the proposals.
In recent years, legislators in New York have introduced legislation at both the State and City level that would provide a “right of first refusal” or a “right of first offer” to qualified not-for-profit entities or tenant organizations if a landlord is planning to sell the property. Together, these concepts are often referred to as providing an “opportunity to purchase.”
A “right of first offer” provides the entity the right to make an initial offer before a property is listed or offered to other buyers. A “right of first refusal” gives the entity a right to match an offer from a third-party buyer. Advocates have assembled a large coalition of community organizations to support the effort, and these advocates generally provide three rationales for the legislation.
- The approach “increases tenants’ rights to bargain with their landlord.” In this view, ensuring tenants have the option to purchase the property prior to a sale to a third party provides tenants with leverage in a negotiation so they can advocate for repairs to the building, require recognition of an existing tenant organization by the new owner, or bargain for economic terms and other items.
- The approach “is a pathway to social housing.” In this view, the legislation would add units to New York’s stock of “social” housing because tenants and qualified not-for-profits may have the ability to purchase the property and could then choose to convert the property into alternative ownership models like limited-equity cooperatives, ownership by a community land trust, or public housing.
- The approach is successful and exists in other large cities, including Washington, D.C., and San Francisco.
To help policymakers understand these proposals, we include in this brief four sections. First, the brief includes a survey of the differing proposals introduced most recently in the New York State Assembly, the New York State Senate, and the New York City Council. Second, the brief includes a survey of how existing opportunity to purchase regimes operate in three other cities – Washington, D.C., San Francisco and Chicago. This section of the brief will also describe some differences between these programs and the proposals in New York. Third, the brief aims to evaluate the potential impact of the various proposals, including how many real estate transactions would be impacted by the proposals. Fourth, the brief provides a set of considerations for policymakers and advocates working to advance the proposals.
