Realtors Lobby State Lawmakers to Extend Tax Cap; Enact Mandate Relief and Pass Co-Op Disclosure Bill

John Jordan | June 2015

ALBANY—About 40 members of the Hudson Gateway Association of Realtors traveled to Albany by bus or car on June 9 to lobby state legislators on key legislation impacting the real estate industry.

The legislative session was marred by the recent indictments of two of the most powerful state politicians—Assembly Speaker Sheldon Silver and State Senate Majority Leader Dean Skelos. Both continue to hold their respective seats in the Assembly and Senate, but have given up their leadership positions.

Although committees of the New York State Senate and Assembly were in session, a host of state lawmakers either attended the session with HGAR at the Assembly Hearing Room A or had staff represent them at the meeting where the association presented its 2015 legislative priorities.

The annual New York State Association of Realtors’ Lobby Day was attended by several hundred Realtors from across the state. Prior to HGAR’s meeting with state lawmakers, NYSAR President Mike Smith addressed the NYSAR gathering and stressed the importance of engaging with state lawmakers on legislation that will impact the real estate industry. State Senate President Pro Tempore and Majority Leader John Flanagan also addressed the gathering. NYSAR Director of Government Affairs Mike Kelly provided an update on the status of the NYSAR legislative agenda.

The HGAR contingent was led by its Legislative Committee Chairman John Lease III, HGAR President Drew Kessler, HGMLS President Leah Caro, and staff including CEO Richard Haggerty, HGAR and HGMLS COO Ann Garti and the association’s Government Affairs Director Philip Weiden.

State lawmakers or their staff that attended the session in the expansive Assembly Hearing Room with HGAR included: Senators Terrance Murphy, Susan Serino, Bill Larkin, George Latimer and John Bonacic and Assembly members: Aileen Gunther, Ken Zebrowski, James Skoufis, Amy Paulin, Steven Otis, David Buchwald and Douglas Rosenthal, communication director to Assembly Member Thomas Abinanti. Members of the HGAR contingent after the face-to-face meeting with lawmakers, either met with the remainder of the Hudson Valley state delegation separately or provided lawmakers staff with particulars on the organization’s 2015 legislative agenda.

HGAR President Drew Kessler presented the organization’s position in support of extending the 2% property tax cap and enacting needed mandate relief legislation. Kessler noted that the property tax cap legislation expires on June 15, 2016 and should be extended. He noted that since its enactment the tax cap has saved New York taxpayers $7.6 billon in taxes.

“Realtors are frequently asked when working with prospective homebuyers about the property taxes. The groups that high property taxes hurt the most are the seniors who are on fixed incomes and younger buyers who cannot afford to buy their first home due to high carrying charges exacerbated by inordinately high property taxes,” Kessler said.

State Senator Larkin said the property tax cap extension was on the “front burner.” HGAR in its Memorandum of Support for the tax cap extension proposed the cap be extended several years. In terms of mandate relief, HGAR suggested freezing local government and or school district employee contracts when they expire so that the workers don’t get automatic increases without striking new negotiated deals. Other suggestions involved health care contribution and pension reform.

HGAR’s Barry Kramer offered an impassioned presentation in support of a bill entitled “Transparency and Disclosure in Cooperative Housing” (A.1120 Lavine S 5644-Hannon) that would require co-op boards to establish reasonable time frames to act on applications and provide in writing reasons for the denial of an application.

Kramer, whose brokerage Westchester Choice Realty specializes in co-op sales, says many co-op board decisions are made legally “behind closed doors.”

“Sometimes co-ops take so long to process an application that buyers are forced to simply give up and the failure to respond becomes the denial in and of itself,” Kramer said.

He said that lack of transparency and disclosure have buyers questioning what the true circumstances were behind their denials. “I’ve heard some co-op boards pride themselves that they are in fact being allowed to act like a country club with only the select gaining admittance” he said.

HGAR Secretary/Treasurer Pamela Jones told the Hudson Valley state delegation of HGAR’s support for “Vested Rights for Property Owners”  (A.1435-Paulin, S 3901-Murphy) that would create a six-year pilot program in the counties of Dutchess, Orange, Putnam, Rockland and Westchester, requiring the municipalities to maintain a consistent set of rules throughout a construction project, except in reasonable instances.

The legislation seeks to create a happy medium between municipal home rule and creating a more attractive regulatory environment for developers,” Jones said.

HGAR Legislative Affairs Committee Chair Lease said the organization supports the Scaffold Law Reform bill  (A. 3209 Morelle; S. 543 Gallivan), which would establish a comparative negligence standard for claims under Labor Law 240 by changing the absolute liability standard in current law.

In its Memorandum of Support of the legislation, HGAR noted that if the Scaffold Law is not reformed, estimates are that school construction costs will increase by $400 million due to the provisions in the existing law.

“Indicators are that the Scaffold Law will add $200 million to $400 million in costs to the construction of the new Tappan Zee Bridge, which must be completed and cannot be repaired,” HGAR stated. “The scaffold law also adds about $10,000 to the cost of a new home. With the highest closing costs and property taxes in the country, New York simply cannot afford these extra costs.”

HGAR’s Russ Woolley presented the particulars behind HGAR’s support of a bill that would “Increase the Threshold for the Mansion Tax” (A. 79 Buchwald S.548-Latimer). The bill would have the minimum price threshold at which the Mansion Tax is triggered tied to the Consumer Price Index.  Sen. Latimer, a sponsor of the legislation, told HGAR members that the bill faces an uphill battle because new sources of revenue must be found to replace the reduction in revenue the bill would cause, as well as the perception by some upstate lawmakers that the bill would only benefit the wealthy.

HGMLS President Caro detailed the reasons why HGAR is opposed to a Source of Income bill (A.3059 Weprin; S. 151-Squadron) that would make “Source of Income” a protected class in state housing law. While stressing that HGAR has been a long-time advocate for fair and affordable housing, Caro also noted that the organization has also been a champion of property owner’s rights as well.

HGAR in its Memorandum in Opposition to the legislation noted, “We condemn any refusal of a property owner to participate in Section 8 or other assistance programs as a cover for discriminatory intent with respect to any of the protected classes of persons under federal, state and local fair housing laws. However, we do not support the idea of criminalizing property owners who, for economic or other legal business reasons, choose not to participate in Section 8 or accept other government housing programs.”

Jennifer Maher, HGAR Regional Vice President-Westchester-Putnam related the organization’s opposition to the imposition of any mortgage recording or real estate transfer taxes. Maher told lawmakers that many buyers are scrambling to secure the necessary funds to close on their purchase. She noted that any increases in the tax burden imposed on real estate transactions would prevent some from achieving the American dream of homeownership.

John Jordan
Editor, Real Estate In-Depth