Fair housing rules are needed for co-ops, too

Painful disparities in health, education, criminal justice, and housing that have come into ever-sharper focus since 2019 make it clear that we must dismantle all systems that lock racial disparities in place, especially policies that allow illegal discrimination to thrive in secrecy. Gov. Kathy Hochul emphasized the importance of fair housing in her 2023 State of the State address, remarking, “For a society to reach its full potential, equal access to housing is a must,” a point she reinforced in Wednesday's budget address. To achieve that goal, New York needs a strong statewide co-op disclosure law that will help to eliminate the opportunity for illegal housing discrimination by co-op boards.

Existing fair housing laws apply to housing cooperatives. But proving that illegal discrimination has occurred is particularly challenging since co-op boards are not uniformly required under New York State or federal law to disclose their reason for rejecting otherwise qualified buyers. In addition to contracting with the co-op apartment seller, the buyer typically also has to submit an application to the co-op board with personal and financial information. There is frequently a requirement for a subsequent interview by the co-op board.

As a result, rejected buyers are left wondering what it was about their application that caused them to be denied. Protecting consumers from illegal housing discrimination requires more transparency and disclosure from any organization making decisions on whether someone can purchase the housing they chose.

Co-ops provide a much-needed affordable option for housing buyers on Long Island, where the cost of single-family homeownership is out of reach for many. There are thousands of co-op housing units in Suffolk and Nassau counties. In Suffolk, there are large developments in Coram, Patchogue, Bay Shore and Islip. And Western Nassau is home to many of the Island’s larger co-op communities, with concentrations in Great Neck, Mineola, the Five Towns and Long Beach. Buyers in all of these co-ops deserve the same ability to exercise their fair housing rights that buyers of single-family homes enjoy.

With co-op applications, the sort of paired testing for fair housing used in Newsday’s 2019 Long Island Divided investigation is not possible. Only bona fide buyers with signed contracts and mortgage commitments make it to the interview process.

New York State abounds with inconsistent or absent local co-op transparency laws, which often allow for discrimination to occur and remain unseen in a cloudy haze of secrecy. Even Long Island suffers from this inconsistency since Suffolk County requires co-ops to disclose, in writing, the reasons for denying an application, but Nassau does not. These inconsistencies in law across the state create risk for the many management companies that operate in multiple counties and townships, and create barriers to potential buyers knowing their rights.

Greater disclosure would be welcomed by the real estate industry as well, since often buyers' funds and sellers' homes can be tied up for long periods awaiting decisions of co-op boards only to have otherwise financially qualified individuals denied the ability to purchase without a reason to accompany the denial.

Armed with the reason for rejecting their application, a co-op buyer can better assess whether the reason provided appears to be valid or whether it may be pretext for illegal housing discrimination. Only by ensuring that this information enters the marketplace can we ensure that it stays free and open, and that co-ops are truly offering equal access to housing.

This guest essay reflects the views of Ian Wilder, executive director of fair housing nonprofit Long Island Housing Services, and Tessa Hultz, chief executive for the Long Island Board of REALTORS, a nonprofit trade organization with members in Queens, Nassau, and Suffolk counties.