Maintaining Fiduciary Responsibility to Our Shareholders

Good day, Co-op City, Last week, I explained the reasoning behind the discontinuation of the Deferred Equity Program. This week, I want to go into more detail about the concerns about the impact of this change. I am warning every reader now that this article does have data and citations which may be boring to some, but I hope you stay with me.

One concern that was brought up during our Board meeting was that ending the program would disproportionately hurt low-income families for which Mitchell-Lama developments are intended and that this would make our housing financially inaccessible. While the director was correct that the Limited Profit Housing Companies Law of 1955 was intended for low-income families, there needs to be greater scrutinization of what that meant. In accordance with New York State Private Housing Finance (Article 2, Section 12), “persons of low income” or “families of low income” are defined as “persons or families who are in the low-income groups and who cannot afford to pay enough to cause private enterprise in their municipality to build a sufficient supply of adequate, safe, and sanitary dwellings, non-housekeeping accommodations or aged care accommodations.” The RAND Corporation, a centrist public policy organization, reviewed the Mitchell-Lama program in 1971 and noted that the law was to provide housing for “low-income families who could not afford new housing at market prices, but were nonetheless too affluent to qualify for public housing.” It also speaks to the original intention of the law, based on “level of living” determined by income and family size to look at how much one can afford in relationship to the market. Based on the current market value of apartments within the city and state, where we have an affordability crisis, we continue to meet these qualifications. In the most expensive city in the world, which has the highest concentration of millionaires than anywhere else on Earth, while still having median salary of $76,607 (as per the 2022 U.S. cen- sus), with an average rent of approximately $1700 to $4000 for a one-bedroom apartment, the cape of who qualifies under this definition gets substantially larger. Regarding the affordability of our equity, we are still within range in comparison not only to other Mitchell-Lama’s (both city and state), but also other New York affordable housing programs like Housing Development Fund Cooperatives (HDFC). All have the same intent; none of them offer a deferred equity program, to my knowledge.

Another concern that arose was the discontinuation would hurt Black potential shareholders from becoming homeowners as they may not be eligible for loans and would be less likely to pay in full. There is some accuracy to this. Within the city, Black residents have statistically lower incomes and less net worth in comparison to other racial groups. However, this has been true since the Riverbay Corporation was established. Regarding access to loans, it is highly dependent on one’s credit score. The Urban Institute released a report in 2021 that reviewed New Yorkers’ credit scores and noted that although Black residents historically have had lower credit scores in comparison to other racial groups, credit scores of all racial groups have improved since 2010. In his 2017 “Make Rent Count” report, former NYC Comptroller Scott Stringer noted credit inequity between races and indicated that one of many solutions is to work with financial institutions to count rotating debt like rent and other nontraditional monthly payments towards credit score reporting, and educating New Yorkers on what is needed to improve their credit to make them better applicants for financial services. It suggests finding alternative ways to make them better applicants within the financial system, not go around it.

With that said, it’s important to recall the original purpose of the Deferred Equity Program. The program was always contingent upon the threat of large amounts of vacancies in comparison to the number of applicants. Currently, with over 6,500 applicants and less than 400 available apartments that we need to renovate, that potential threat does not exist and I believe there are means to mitigate that. During our meeting, the Executive General Manager also stated that the program supported a renting framework and not one of homeownership. As I stated last week, homeownership takes financing and time. Being affordable is one thing, but you also need to be prepared and financially fit enough to afford living here. That involves saving to pay in full or being a suitable candidate for a financing institution. Other Mitchell-Lama’s have not openly changed their financing options despite the banks’ eligibility for loans. The only institution that somewhat has an official self-sustained financing option is Penn South in Chelsea, whose equity is high enough to take out a mortgage. However, they developed their own separate federal credit union in 1963 which lends to their residents and is federally insured by the National Credit Union Administration, similar to the Federal Deposit Insurance Corporation (FDIC) for banks. Their website also informs prospective applicants of their financing options in advance, prior to applying. Their credit union has $7.8 million in assets, while our housing development recently had an $18 million deficit and we’re still deferring equity – we are not the same and we need to act like it.

So where does that leave new applicants? Effective January 1st, they will need to return to their original plan of paying in full or financing. However, noting the inequities in accessing financial services, I look forward to working with the chair of the Sale Committee, Leslie Peterson; president of the Riverbay Board, Sonia Feliciano; the resolution’s co-sponsor, Rod Saunders, and the Management team, to see how we can help prospective shareholders to help themselves and to connect them to community resources during their threeto seven-year wait for an apartment. As the need has grown, there are more services available than in 2011. Building partnerships with these organizations to help prospective shareholders while maintaining our fiduciary responsibility to current shareholders will be key in allowing our community to thrive.

NCNW Co-op City Section – Co-op City Section will be having our first Membership meeting of 2024 tomorrow, January 14, at 3 p.m. If you are not already a member, would you like to see what we are all about? If you think you would like to move into the New Year with us, reach out to us through the social media listed below.

Members and associates, have you paid your dues? Your annual national dues of $50 must be submitted directly to our national office via the website, NCNW.org. Our local section dues are $35 per year. These section dues may be paid by check, or through our website, www.ncnwcoopcitysection.com.

Checks can be made payable and mailed to NCNW Co-op City Section, 3300 Connor Street, P.O. Box 93, Bronx, NY 10475. Remember to be fully financial, that is, able to vote or hold office, national and section dues must be paid.

Good Health WINs – Did you know that CDC’s Bridge Access Program provides free Covid-19 vaccines to adults 18 years of age and older who are without health insurance, or their insurance does not cover all COVID-19 vaccine costs? This program will end by December 31, 2024. According to the CDC, Covid-19 vaccines are still covered at no cost for most people living in the U.S. through their private health insurance, Medicare or Medicaid plans. However, there are 25-30 million adults without insurance and additional adults whose insurance does not provide no-cost Covid-19 vaccines. There is no enrollment process for eligible adults to get no-cost Covid-19 vaccines through the Bridge Access Program. Providers will ask patients whether they have health insurance at the point of care to determine eligibility. Covid-19 vaccines through this program are available at participating local healthcare providers, local health centers and pharmacies. Visit Vaccines.gov to find a provider that offers no-cost Covid-19 vaccines through the Bridge Access Program. Please visit our website at www.ncnwcoopcitysection.com and click on the GHWINS link to learn more about Good Health WINs.

January is Human Trafficking Awareness Month and Thursday, January 11, was National Human Trafficking Awareness Day. The color blue is internationally symbolic of Human Trafficking awareness. Human trafficking is the exploitation of another person for labor, domestic servitude or commercial sexual activity by force, fraud or coercion. Human beings are treated as property and their bodies are sold to others without their consent. Victims can get recruited into human trafficking through deceit or abduction and it often involves the promise of a better life for the victim. Traffickers usually target the most vulnerable members of society such as children, victims of physical/ emotional abuse, the homeless, the disabled, the poor, refugee and migrant children, LGBTQ+ youth, and the drug-addicted, but it can happen to anyone. If you know someone who is being trafficked, contact the National Human Trafficking Hotline at 1-888-373-7888.

Social Media – Remember, you can find us on our website: www.ncnwcoopcitysection.com; on Facebook: NCNWCoopcityBethune; on X (formerly known as Twitter):@NCNWCoop City; on Instagram: NCNW Co-op City and email: ncnwco.opcity@gmail.com.

––Joyce Howard