S2433A

The New York State Senate passed legislation Tuesday addressing the expiring ground leases of cooperative apartment buildings, protecting approximately 30,000 residents in 12,000 units primarily located in Queens, Brooklyn, and the Bronx. Senate Print 2433A, sponsored by Sen. Liz Krueger, passed 34-28 on a largely party-line vote. The bill clarifies that if a ground-lease co-op building defaults due to escalating land-lease costs, residents can remain as rent-regulated tenants under existing 1974 law rather than losing their homes and equity investments. Krueger argued the residents are primarily middle-income and older New Yorkers on fixed incomes who invested life savings in their homes, and that the bill does not change existing contracts but merely clarifies application of existing rent-stabilization law. Opponents, led by Sen. John Martins and Sen. Anthony Palumbo, argued the bill unconstitutionally interferes with private contracts between sophisticated parties who knowingly purchased discounted units with limited lease terms. Palumbo raised takings clause concerns, citing examples of $50 million penthouses that would lose equity value. Martins contended purchasers received the benefit of buying units at 30-50% below market rate and should not receive additional state protection. Sen. Stavisky, voting in favor, noted that ground-lease co-ops in her Queens district are not wealthy buildings but middle-class residents struggling to maintain their buildings.