Examining Cooperative Conversion: An Analysis of Recent New York Legislation

New York City contains ninety-five percent of the cooperative housing units in the United States. While there are historical and social factors for this statistic, a specific factor is the New York State Legislature's support of conversion of residential real estate from rental to cooperative ownership. Specifically, the "Goodman-Grannis" bill provides a method whereby developers may convert residential rental housing in New York City to cooperative housing without obtaining an agreement to purchase a cooperative apartment from any of the existing tenants. Under this method, tenants who do not desire to purchase their apartments as cooperatives may remain in the targeted building indefinitely.

In order to initiate this "noneviction" plan, a developer must be able to show that potential purchasers, either tenant or non-tenant, will purchase at least fifteen percent of the apartment units in a targeted building. As a result, the developer can reach this number by recruiting non-tenants only, thereby taking over a building without the consent of a single tenant resident. Therefore, this Note recommends that adequate protection of New York City residents should require landlord-developers to meet fifteen percent requirement solely from existing tenants.