"Deal Fell Through" or Discriminatory Board?

Not trying to sound all philosophical and poetic. Just saying we got the legislation....

What legislation? Fair housing laws seems insufficient for the coop situation.

Schumer lives in a fancy park slope coop and he is well aware of what happens in the coops. However, the legislative focus (both Federal and State), in general, is to protect the renters, help low income people via free/subsidized housing/FHA loans, rather than people who are rich enough to buy a Manhattan coop with average price of $1mm which is even more than FNM/FRE loan cap. So the solution likely will come from the courts if enough people start to sue the coop boards.

Fair housing laws are actually quite rigorous. However, how do we legislate away personally held biases and prejudices??

https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview

Co-ops function like private clubs. The question, should that be permissible with the sale/rental of homes?

Legally, they are protected by "business judgment" rule as the buyer are looking to purchase shares in a corporation.

Something like this:

https://www.propertyshark.com/Real-Estate-Reports/2021/05/26/co-op-boards-may-have-to-explain-rejections-per-new-proposed-bill/amp/

Presumably, boards would not write FHA-violating reasons for rejection. And if they legal reasons (e.g., financial, dogs, etc.), they go on-record for the criteria they apply and open themselves to action for applying that criteria selectively.

@inonada I also believe legislating is the way to go. And it should be simple and clear; nothing so ambiguous that it's 'left to the interpretation of the court'.

>>"Co-ops function like private clubs. The question, should that be permissible with the sale/rental of homes?" - @theburkhardtgroup

This is EXACTLY where the issue lies. Separate is never equal, no matter how one parades it. Housing cannot be subject to country club-style rules. Coops don't exist in a vacuum; they benefit from the collective investment of citizens. Unfortunately, although they are deemed corporations, they are not entirely treated like business entities. Even business entities are subject to laws that bar discrimination.

Why is the selection process so opaque? That's the demon that fuels discrimination. This idea that we have to impose some kind of social/behavioral purity test to safeguard our living spaces is really obtuse. Real estate is a dynamic asset; neighborhoods change and with the change, the lure for neighborhoods change. If an area/building stops meeting your personal preference, you always have the option to move. Ruling people out based on a presumption of the life they (will) live is so morally decadent, I don't even know how it's legal. Condos are proof-sufficient that it's possible to manage the behavior of residents, you shouldn't need familial links or popularity rankings to obtain housing that you can financially support.

Nada, Thank you for posting the link to legislation. If passed, it will be very good and limit the “discrimination” to mostly financial.

Does any one know what happened to it? I tried searching the web but didn’t have much success.

I had previously read about this proposed legislation from Kavanaugh, I think we have a thread referring to it in here somewhere? I'm all for it, I think it's a reasonable way to provide consistency and transparency to the process. In the past the argument has been boards would be exposing themselves to litigation if they were to list any reasons for rejections. I wonder if part of this legislation would somehow indemnify board members for rejecting buyers based purely on non-discriminatory factors?

Do any one know what is the latest on this legislation? Personally, I would have preferred that board does not have a right reject legislation - only first refusal. Would have made it so simple!!

It's kind of shocking how many more Condominiums are adopting Coop like rules than the other way around.

Not when it comes to board's right to rejection as I do not know of any condo yet who does that rather than simply rights of first refusal.

I'm all for a bill requiring any/all of:
* written reason for rejection
* public disclosure of financial requirements
* change of right of rejection to right of first refusal

Keith bringing in the analogy of Coops behaving as country clubs is apt and I think very accurate.
To some degree I think it fits with the wider upscale-ization of Manhattan especially.
A lot of urban liberals who scoff at the idea of suburban losers & their exclusive, discriminatory country clubs basically live in one :-)

Actually with board having “right of first refusal” only for purchases, no other caveats are needed. Coop and condo difference more or less gets eliminated except for renting.

I don't know if you need to go that far. 300. I don't have an issue with co-ops wanting to have some control over potential shareholders.

The point of all this is that control should not mean illegal discrimination. As well as to include some transparency to the whole process. If you're not breaking the law, then you have nothing to hide from or worry about. Overall, I just always think transparency is very good.

As a coop board member, I would prefer just the “right of first refusal” as any explanation is subject to questioning. Perhaps minimal down amount.

@30
While Madonna example is semi-convincing, that is just one very rare situation, plus coops could get around some of the neighbor issues by issuing housing rules and fines to limit behaviors that are problematic. But if you extrapolate, a volunteer board could also exclude a colored applicant just on the assumption they will listen to loud hip hop or salsa music, or a single person, on the assumption that they will throw parties, etc. And if there is a problematic pattern, we wouldn't know due to lack of transparency, and have no way of disputing or taking anyone to court. Certain society institutions are particularly important to providing equal opportunity and socioeconomic mobility, in particular, jobs and schools. Therefore, we have strong anti-discrimination laws in those areas. Since jobs and schools are location-specific, housing is next on the list, and excluding someone from Sutton Place housing market, you are also asking them to have a longer commute, and not to send their kids to a middle school rated 10 on greatschools.com.

Regarding the ageist comment, aside from data that show that older people are more conservative
( https://www.chicagobooth.edu/review/there-are-two-americas-and-age-divider ), consider also that the oldest generation grew up in a world with a lot fewer anti-discrimination laws and protections, including some that today seem like a no brainer. The president of that Sutton Place coop that rejected me was in their 20s at the time of Brown v Board of Education! Kids in school today are taught a lot more relevant information about biases, so they are going to be more conscious.

Also anecdotally, my neighbor repeatedly asking an American-born brown person "But where are you really from?" was 70+ years old...

>>I'm all for a bill requiring any/all of:
* written reason for rejection
* public disclosure of financial requirements
* change of right of rejection to right of first refusal

100% agree, and if we had that we would not need this thread! Maybe throw in a cap on some more excessive financial requirements, like millions of dollars of post close liquidity.

>>"Maybe throw in a cap on some more excessive financial requirements..."

I agree. Without this one, all the other great recommendations won't stop the country club-styled selection process.

It seems to be still sitting in some committee. Presumably all the people screaming discrimination are writing to the senators.
https://www.nysenate.gov/legislation/bills/2021/s2874

If this legislation passes, which I doubt, the price action of condos and co-ops will be interesting.

I imagine that co-ops rise in value, and condos fall in value, as the co-op discount is less so

Discriminating against the discriminators. Who are 95%+ white and 95% Liberal democrats