Nonprofit housing operators are about to be in the driver's seat to acquire thousands of troubled New York City apartment buildings after a controversial bill was passed by the New York City Council on Thursday afternoon.

The Community Opportunity to Purchase Act was approved by city lawmakers Thursday afternoon, with 38 council members voting in favor of the bill, nine voting against and two abstaining.

COPA requires owners of some distressed multifamily properties to give first right of refusal to nonprofit entities, which can work alone or with a joint venture partner, if the buildings are in line to be sold. The city estimates it would affect as many as 2,100 apartment buildings.

While the legislation has been narrowed in scope compared to previous versions, landlord groups still vehemently oppose it in the final version, which is expected to be signed into law by the mayor, while saying it doesn't address the underlying issues plaguing troubled buildings.

“Government has created a devious housing scheme — COPA — under the guise of addressing problems they created in the first place, so they can illegally take private property,” Small Property Owners of New York Board President Ann Korchak said in a statement.

Real estate insiders told Bisnow this week that the law could make it harder for sellers to attract potential buyers.

“It definitely makes owners and investors more wary about investing in this market,” Ariel Property Advisors founding partner Victor Sozio said.

The bill applies to relatively small properties, or ones with affordability agreements in place with the Department of Housing Preservation and Development. Properties must have a track record of distress and numerous open violations, and nonprofit bidders have to close deals within a strict timeline.

COPA will apply to any buildings:

• With four or more units, or five or more units if one of the apartments is the owner’s primary residence.

• That have regulatory agreements managed by HPD.

• With an underlying building issue, like disrepair, for more than a year.

• That have been subject to the alternative enforcement program for at least one year.

• That have been determined to be a distressed property, subject to an in rem foreclosure action.

• That have a number of annual Class-B or C violations, like leaking ceilings and vermin infestations, that equate to three per day or more.

• That have been denied a certification of no harassment by HPD within the past year and have failed to remedy the circumstances.

• That have up to 100 dwelling units and are also subject to an affordability restriction. Buildings that have incentives via as-of-right programs like 421-a or 485-x are exempt, and affordability agreements no longer have to be within two years of expiration.

Violating COPA now has a two-year statute of limitations, meaning the period in which a seller could be fined for failing to comply is now limited.

Versions of COPA have been kicking around the council chambers since 2020, but a version introduced in 2025 finally passed in late December in spite of the commercial real estate industry’s objections to the bill.

But then-Mayor Eric Adams vetoed the controversial legislation on his last day in office. Julie Menin, when newly elected as speaker in the first days of January, declined to override the veto even as she chose to bring back 17 other vetoed bills. Menin abstained from voting on the bill last December but voted in favor of COPA on Thursday afternoon.

Council Member Sandy Nurse sponsored last year's bill and reintroduced it in May, receiving an endorsement from Mayor Zohran Mamdani as she announced the bill’s return.

It has been negotiated in recent months as the city council heard more objections from the real estate industry and multifamily owners, with revisions narrowing the scope of buildings eligible for COPA and shortening the timeline for nonprofits to make a decision.

“The Council has been responsive to stakeholders, but we’re still missing the forest for the trees,” New York Apartment Association CEO Kenny Burgos said in a statement.

Nurse said Thursday the bill will give community members a chance at staying in their neighborhoods long term and creates additional public oversight for troubled properties.

"We cannot only build our way out of this crisis. If we are serious about stopping displacement, preserving existing housing has to be a priority, and that's what COPA does,” she said. "We are voting on the most strategic, operationally sound version of this bill. I believe this thing is solid."

The new bill also eliminated a provision that would have allowed HPD to add categories of buildings to the program, although the department can still recommend categories. HPD also has to notify any owners whose properties meet the criteria on an annual basis and give owners the chance to appeal if they can argue that the building’s problems stem from financial hardship.

The transaction window is also shorter than the version introduced in May. Whereas the prior version gave qualified buyers 160 days to close a deal, the version that passed the city council Thursday shortened that timeline to 145 days.

Additionally, if an owner sells a property covered by COPA’s criteria without notifying the city, the landlord could face a penalty capped at 15% of the sale price. But the new version adds a two-year statute of limitations to that time period, meaning that enforcement actions couldn’t take place more than two years after a sale.

But industry figures told Bisnow that COPA is just the latest policy that will make Mamdani’s pledge to build 200,000 more affordable units in the next decade more difficult to achieve. The industry maintains it’s not feasible to build enough housing to meet the mayor’s goals under the new 485-x tax abatement. The two-year rent freeze for stabilized apartments prevents owners from increasing revenues as they struggle to maintain and repair aging buildings, a persistent complaint since the rent reforms of 2019 limited destabilization practices.

“In 2019, this group of sellers was kicked down to the ground,” said Matt Cosentino, partner at Brooklyn-focused brokerage TerraCRG. “Now we're just poking in their eye.” 

Republican Council Member Vickie Paladino, whose Queens district includes Whitestone and College Point, echoed landlord concerns at City Hall on Thursday.

"The government should not be dictating how the people sell property and how hard they have worked to maintain and own their property," she said. "This bill, it potentially reduces property value and will stall all sales, which will create unnecessary burdens on the owner."

The reduction from 160 days to 145 is unlikely to help sellers of distressed properties, many of whom will be in need of urgent relief from significant financial burdens, Cosentino said.

“It's a small subset of buildings, but it's the most distressed assets,” he said. “These sellers are going to be the ones that need to move the most quickly because they're losing the most money, and it's going to hurt them the most.”

But the nearly five-month window is crucial for organizations like the community land trusts and nonprofits, which can't put together a deal as quickly as private buyers, said Jakob Kendall-Schneider, a senior program manager for research and policy at the East New York Community Land Trust.

“We're not walking in with all cash, so we need a little time,” Kendall-Schneider said. 

COPA would let organizations like the ENYCLT know what’s going up for sale that could potentially interest them, which is information they wouldn’t otherwise get, he said.

“It really helps community land trusts and other nonprofits really understand what's going on with a building right from the get-go,” Kendall-Schneider said.

Some of the changes to the bill — like the requirement for properties to have an annual number of violations equivalent to three per day, as opposed to the one-per-unit count in last year’s version — will also make it harder for nonprofits to get in on the action, ENYCLT Director Hannah Anousheh said. 

“It's going to take more organizing and working with tenants,” she said. “We would have loved it to be stronger, but I think it's a starting place for us.”

The changes make the legislation less far-reaching and less punitive for landlords, Eastdil Secured Savills Managing Partner Daniel Parker said, adding that owners who are able to keep violation counts down “should be fine.”

“In a sense, the bill rewards good operators,” he said. “They're generally exempt from this, which is a positive outcome even if it does add another layer of regulation.” 

While the legislation could create opportunities for responsible owners to partner with qualified entities on properties, COPA will make it harder for buyers and sellers to transact.

“There's been some good changes, more practical, pragmatic changes from the version last year,” Parker said. “In general, though, where it has an impact on the broader market is whenever you have any type of government intervention.”

Brokers are unlikely to take on COPA deals, Cosentino said, because they will take longer to put together, and if they don’t come off, they will be back to square one with no commission. It’s already hard to sell the kinds of buildings that will be covered by COPA because of the going-in cost of repairs, he said. 

“There's a very small group of private buyers that want these buildings right now,” he said. “This just makes the whole process convoluted and more difficult.”