New York City, Tuesday, published the first “Speculation Watch List“identifying buildings purchased for less than the median cap rate of all apartment building transactions in each borough. Buildings on the watch list will be subjected to increased inspections and scrutiny to prevent tenant harassment.The initial list contains 51 buildings purchased with cap rates (determined by the Department of Finance) to be below 3.345% in Manhattan, 3.129% in Queens, 3.671% in Queens and 3.665% in the Bronx between April and June 2018. The City also published a list of all the transactions considered for reference. No effort was made to look at the reasons someone might have accepted a lower cap rate, location within the borough, the investment expectations, financing, or any other more relevant information.
The City Council, meanwhile, rejected efforts Wednesday to transfer 13 tax delinquent and mismanaged low income co-ops to third party ownership. Council members have expressed concern for the resident shareholders losing their equity, but haven’t addressed the residents’ inability to pay or the buildings’ physical issues.
The Council also passed legislation amending the Building Code to require retroactive installation of carbon monoxide detectors in all commercial spaces, effective in 270 days.
Enforcing 2015 legislation on cooling towers seems to be a problem due to inexperienced and confused inspectors. An analysis of 15,700 cooling tower violations challenged at the Office of Administrative Trials and Hearings found that 14,000 had to be dismissed for various errors.
Due to software glitches, the U.S. Veterans Administration has failed to pay rental assistance to thousands of veterans receiving student assistance for two months or more, causing many to be late on rent. Mayor de Blasio has offered extra assistance to tide the vets over, so if you have a tenant who relies on VA help you can steer them to the City.
Not only did Manhattan come in second to Brooklyn in the number of new and converted apartments offered for sale last year, Queens is set to pass them both in the next two years.