Is a major sea change on the way for the city's affordable HDFC co-ops?

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HDFC co-ops—apartments with special tax breaks and income caps for buyers—have long been something of a paradox in the New York market. They're one of the rare affordable housing options available to buyers as opposed to renters, but due to price hikes and income caps, are increasingly available only to buyers with little to no income and lots of cash on hand, like retirees or recent college grads bankrolled by their parents.

But as the 2029 expiration date on their current tax break approaches, advocates are hoping that might all change. As DNAinfo reported earlier this week, groups like the Task Force on City Owned Property are hoping to write new rules into the next deal; most notable among them is a price cap that would make the co-ops reliably reachable for families making 80 percent of the Area Median Income (aka AMI). Though meant to be affordable housing, many have price tags in the mid-six figures. There's also talk of eliminating property taxes entirely in exchange for closer government oversight of the buildings, which frequently run into maintenance problems due to lack of reserve funds.

"HDFCs are sort of a victim of their own success, and many have frankly become much more valuable than anyone thought they would be," real estate attorney Dean Roberts tells us. "Price caps would be a simple and somewhat clean way to address the problem."

Currently, steep flip taxes are the only safeguard in place keeping prices from skyrocketing. As Roberts puts it, "There tend to be two classes of people who get [HDFCs]: the small percentage who actually qualify, and people who know how to shed their income [on paper] and game the system." As such, he notes, if price caps were to go into effect, the apartments would become even more valuable (they'd stay cheap even as the market went up around them), necessitating further oversight to ensure that the co-ops went to New Yorkers who actually needed them. "If a two-bedroom is capped at $250,000, it'll still be in high demand," he says. "It incentivizes people to game the system—whatever rules you make, people are going to try to find a way around them. It's human nature."

In any case, HPD seems keen on the plan, too, and one official told DNAinfo, "A few of HPD’s main recommendations are to update policy and regulatory requirements to ensure adequate supervision, fair and equitable sales among other reforms." Which, for anyone interested in HDFCs—but afraid they'll all evaporate from the market over the next few years—could be a very good thing.


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