CM Nurse questions HPD on COPA qualified entities and preservation deal track record

Thank you, Chair.

My questions are mostly just going to front load some of the feedback we've gotten for COPA and have you on the record giving your opinion.

I wanted to talk about the qualified entities.

As we've heard this bill before, some have called into question HPD's ability to create accountability within a COPA program.

And we know you have worked with preservation buyers and had a list for years with lots of success and with some challenges.

Can you give us an idea of how many preservation deals HPD has made utilizing entities on the qualified buyers list, even the previous one you had?

It's a good question.

I'm trying to do the math, right?

We're talking units a lot.

But, you know, we do, I would say, 10 or 20 deals on preservation a year, actually.

Would you say, yeah, close?

Yeah, close to 10 or 20 a year.

I think you are raising a fair point, right?

We are going to need to set out some rulemaking if COPA, we hope it does pass when it passes, both on how we will establish the qualified purchasers list, which will be probably similar to our current preservation analysis, like what we do.

to determine that somebody is a qualified buyer in our normal preservation programs.

We will also need to make sure we have a mechanism to notify the buildings that are going to be subject, and we intend to do that through rulemaking.

And then two other issues, establishing penalties for noncompliance.

And lastly, also notification to tenants, which I think we need to pay a little attention to, is how tenants will be notified when a preservation transaction is actually going forward under COPA.

Okay, that's great.

Thank you for sharing the...

Like how many deals you're doing per year.

In the past, you've had the qualified preservation buyers list.

So can you talk about, or maybe those who've had the experience of it, talk about kind of what goes into the qualifications?

How does one get on that list?

What do they have to show that they can do or have done in the past?

And what might be a process for removing an organization that is, let's say, having too many violations open in their building?

Yeah, so generally it's what you would expect in terms of the standards that we look at in creating the current preservation qualified purchaser list.

So we're looking at financial capacity.

We're looking at organizational capacity.

So are they fully staffed?

Do they have all their proper financial documents, audited financial statements?

We're looking at their portfolio across the city, whatever they own and what the conditions in those buildings are.

We're looking at compliance with things like anti-harassment laws.

Source of income discrimination.

So we're looking at like all the factors that would generally lead you to say that this is a qualified, well-capacited buyer.

Because we refresh that every year, if an owner were to, for whatever reason, say start to struggle during the course of a year, we would be reevaluating that in the next year.

And it is possible that a group that was on and, you know, currently may fall off in future years.

Okay.

So it's fair to say that you're not doing deals with incompetent organizations.

We are not working with incompetent.

Great.