March 2023

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

Add this to the growing list of forms, regulations and paperwork required of residential buildings in New York. It’s Local Law 55 passed in 2018, which requires annual reports about the presence of molds, pests and other allergens that cause or exacerbate asthma.

The law (The Asthma-Free Housing Act) became effective in January 2019, but the onslaught of the Covid pandemic in 2020 halted the required inspections. Now, the city is back to total enforcement. During Covid, residents were asked to notify the landlord and the city if mold existed in their units or public areas. Inspections were deferred in all but the most serious cases and the city distributed information on remediating the problems while maintaining social distancing. Taking photos of problem areas was recommended as well as tips on cleaning many of the areas using non-chemical treatments.

The law sets out rules and procedures for buildings of three units and more to keep apartments and public areas free of indoor allergen hazards, mainly molds and pests. The law is specifically aimed at molds, rodents and cockroaches.

These procedures include investigating and remediating the allergen hazards and fixing building conditions that may cause or contribute to the growth of molds or pests. Local Law 55 requires visual inspections of all readily accessible areas along with moisture, temperature and infrared camera readings looking for mold, pests and defects such as leaks, moisture and entry points for pests. The reports are required to be filed with the department of Housing, Preservation and Development (HPD).

The law details five primary requirements:

• Vacant units must be cleared of all visible mold and pest infestations prior to re-occupancy.
• Mandatory annual inspections of all units; buildings must conduct additional inspections in response to resident complaints and violations.
• Buildings must provide an annual notice and Local Law 55 fact sheet to all residents.
• A state-licensed mold assessor and remediator is required if there are 10-plus square feet of mold in a building with more than 10 units.
• Integrated Pest Management (IPM) practices must be used.

Integrated Pest Management is a best management system that downgrades the role of chemical pesticides that do not get to the base of the problem. IPM is a safer and more effective system that targets and fixes the underlying causes of pest problems, improves building conditions, and saves time and money long term.

Implementing an IPM plan can improve indoor air quality, prevent pest-related damage to building systems, and provide long-term pest control. Specifically, the IPM procedures include inspecting and removing pest nests, waste and debris; eliminating sources of water that attract pests by repairing drains, faucets and other plumbing; and repairing cracks and sealing entry points for pests.

While this column focuses on its implementation in urban areas, IPM is also employed in farm and rural communities to reduce the use of chemical pesticides.

With dangerous toxins and spores floating in air, safe work practices are required during inspection and cleanup including correcting underlying defects and using properly covered vacuum tools and non-chemical cleaning agents for clean-up.

Managing agents, boards and landlords are required to provide information to residents about Local Law 55 and what they can do to maintain a healthy environment. A fact sheet prepared by HPD advises steps for tenants including, keeping homes clean and dry, safely handling food and garbage, and reporting pests, leaks or holes cracks in the wall and floors. They are encouraged to call 311 if the remediation is not done promptly or poorly.

For lease renewals or owner transfers, residents should receive a copy of the Department of Health’s fact sheet as well as a notice identifying both building and resident responsibilities.

Buildings are required to correct any violations within a certain time period. Failure to do so can lead to fines from $10 to $125/day to a maximum of $10,000.

Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

While much of our attention over the past nearly three years has been on Covid-19, properties need to remain vigilant about proper upkeep and maintanenace of the physical structure. While we do not know when the next variant will come, or its impact, we do know that the proper vaccine for buildings is preparedness, especially for winter when the elements can create havoc. Fall is the time to start preparations to lessen the possibility of damage to both the building’s interior and exterior.

While our asset managers and building staffs are vigilant throughout the year to ensure all systems are operating properly and necessary repairs are made when problems arise, we pay special attention during the fall to make certain that we are prepared for the winter days. There are numerous items on our checklist.

One essential matter requiring an early start is bringing in a professional boiler company while the heating systems are down during the summer to clean the boiler, inspect to see what repairs, if any, are required and test the system. Failure to do this can lead to a breakdown during a frigid day and increased expense. Dirt build-up in boilers significantly reduces their efficiency adding energy costs. In recent years, many properties we manage have converted to gas, a cleaner fuel that reduces both maintenance costs and the possibility of dirt build-up. Fuel usage is monitored during the winter months for non-weather-related increases, often a sign of boiler or delivery system problems.

Pipe insulation is checked to reduce the loss of heat, maintain maximum efficiency and reduce pipes freezing.

The roof is another important area. We make certain all debris is removed and the drains are clear. Often during cold spells snow and ice freezes on the drains and when they thaw, the drains can’t handle the flow which can accumulate on the roof and seep into units below.

Another area to check is terraces. Residents should follow the same procedures to see whether drains are clogged and barriers need repair.

Many buildings have roof-top water tanks which require monitoring. If controls operating the wood tanks and the piping aren’t properly insulated or protected, water can freeze within the tank. Slight leaks on the tank can freeze and expand the wood leading to damage when the ice thaws.

If a building has window air conditioning units that remain year-round, we work with the residents to be certain they are properly sealed to prevent draughts and the loss of heat. If the units are removed, we ask residents to notify building staff so we can check if there is damage to the casement causing loss of heat.

Exterior water lines exposed to the cold are shut down and drained to prevent the pipes from bursting during extreme cold.

Units with working fireplaces need to have them professionally inspected and cleaned prior to the winter when they receive the most use. Flew dampers need to be open and operating correctly to prevent backdrafts causing smoke damage to walls, furniture and paintings.

Winter preparation includes checking supplies so the building is prepared for a snowstorm. This has become a bigger issue with supply chain disruptions We want to have adequate sand and sidewalk ice melt to last through a heavy snow season and not have to scurry around to find more when it is needed. We check to insure there is sufficient snow removal equipment.

From experience, we understand the importance of taking the steps discussed above, and others, to ensure that the residents of properties we manage have a warm and safe winter.

Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

One lesson from the Covid-19 pandemic is that we need to be prepared for the unexpected. In fact, the unexpected is now commonplace. As I write this, New York City is in another surge cycle and we do not know which variant, if any, will pop up next. This puts a burden on all of us as we schedule events and go about our daily lives — what guidelines do we follow and what personal decisions do we make?

Property managers face the same quandary. What procedures and rules should we relax, and which maintain? For our properties, in consultation with the boards, we have taken a conservative approach and maintained many of the rules and procedures established when the pandemic overwhelmed us more than two years ago. Yes, it’s been a long haul.

Let’s look at what we have been doing. For more than a decade, Matthew Adam Properties has emphasized the use of non-toxic and extremely effective cleaning materials. While we have been using these in many of the properties we manage, we have extended this to additional properties. Not only are these more effective cleaning materials, but they provide a safer and healthier environment for residents, visitors and staff.

In conjunction with this we have also expanded our warehousing of supplies. We all know about supply chain issues that have prevailed since the pandemic began for cleaning materials and almost everything else. We have adapted the practices of many of our institutional clients to maintain adequate supplies rather than rely on “just-in-time” deliveries. In doing so, we invest in having sufficient PPE’s (personal protective equipment) and other products and applications on hand.

Added to the above, we have significantly stepped up our cleaning protocols by increasing the number of times a day our staffs clean the public areas.

Probably no issue has caused more controversy regionally, nationwide and globally than the use of masks. While requirements and practices are changing, many buildings we manage still require staff to wear masks to protect themselves as well as residents and guests. One concern is that many of the staff take public transportation to work and increasingly fewer people are wearing masks on the subways and buses. The mask requirements also applies to vendors and contractors.

We continue monitoring the health of each staff member. We expanded our cleaning protocols to include sanitizing employee locker rooms. While the city and medical facilities reduced availability for testing, we encourage staff to test regularly, particularly now when there are expanding cases where people are asymptomatic. Most union insurance that our staffs have provide testing kits.
While restrictions have lessened in the past few months, some buildings still do not permit deliveries to the unit and when they do they make certain the delivery person goes directly to the correct floor and apartment.

Gyms have been an issue since day one of the pandemic, with many closing for months in the beginning and then at surge times. Many buildings still require proof of vaccination and boosters, and boards are asking users to wear masks, though it is not mandatory. Since the start of the pandemic some buildings have improved the air circulation systems in the gyms, which usually are located in windowless spaces.

Matthew Adam Properties represents a broad range of clients including foreign governments, medical institutions, universities as well as co-ops and condominiums. It’s interesting to see that each group, with variations within the groups, have their own priorities on rules and procedures. Those that handle considerable traffic each day, such as medical facilities and universities, have different protocols than let’s say a small co-op or condo.

With all the focus on health and safety and with the added expense over the past two-plus years, it’s important that properties maintain their preventive maintenance programs for systems. Failure to do so can only lead to costly future problems. If a property has fallen behind, now is the time to bring the inspections and maintenance up to date. With rising costs throughout the economy, repair costs will only increase as we move forward.

Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

Back in 2019 I wrote about Local Law 97 which requires all buildings of more than 25,000 to meet certain levels of carbon emissions by 2024 and then imposes more stringent requirements by 2030 and beyond to 2050. The city estimated that about 20 percent of buildings would require work to meet the 2024 deadline and nearly 75 percent by 2030. It seemed a long way off then and with the Covid pandemic descending about a year after the law was passed focus on complying was lax.

Well, the deadline is fast approaching and the city estimates about 2,700 buildings (including co-ops and condos) need to upgrade to comply with the first phase of the law. As with commercial buildings, most of those needing work are smaller properties.

It’s a combination of factors, says Darren Johnson, senior account manager of Bright Power, a provider of energy and water management services. “A lot of owners are hoping this will go away,” he says. Additionally, smaller buildings often lack the data to know how compliant they are. And time is running out.

“The timeline to do the work is closing fast for the buildings that need to get below the 2024 emissions cap,” Johnson says, so buildings that have done little are behind the eight ball now and need to move quickly.

One issue confronting buildings was the lack of rules, in effect putting properties in limbo notes Amanda Clevinger, policy and programs manager at Bright Power. The city released preliminary directives in October and after hearings is expected to finalize them in January.

The proposed regulations include formulas to determine a building’s energy use and annual greenhouse gas emissions and the limit to comply. It also sets forth the procedure to determine a building’s gross floor area for the purpose of reporting to the department. One area that is more beneficial to commercial properties than residential is permitting owners to comply by offsetting emissions from electricity by buying renewable energy credits from solar and wind projects. Most residential buildings run on fossil fuels for heating and hot water.

Clevinger points out that while the law is aggressive in seeking to limit carbon emissions, the city has not provided sufficient budget to regulate it.

What do buildings need to do to comply? Since most carbon emissions are generated within individual residences, buildings can leverage utility and NYSERDA (New York State Energy Research and Development Authority) incentive programs to reduce the use of energy in the units. Probably the first step is hiring an energy company to analyze current usage and help the building develop short and long-term plans. As I have previously warned, beware of working with a start-up company that formed solely to assist with compliance for the new law.

The city now requires annual benchmarking of energy use. This information can be used in determining energy usage and where reductions can be made.

Johnson said areas of concentration include heating and hot water to reduce the amount of energy they require. During this century, technology has come to the market to help properties control and equalize the flow of heat to reduce fuel use. Similar efforts can be made with cooling systems. This helps, coupled with work on the exterior and windows to reduce the loss of heat and air conditioning.

For hot water, Johnson points to such basic efforts as reducing the fixtures’ flow. Many larger properties have installed these improvements, but they do cost.

While numerous buildings and individuals now use LED bulbs, lighting overall does not represent the largest use of electricity in an apartment building.

Buildings requiring work to meet the 2024 requirements should take a long-range view, Johnson and Clevinger say. Just meeting the minimum standards for 2024 leaves a big gap to fill by 2030, which we have seen from the current timeline comes with the speed of a sprinter, not a marathon runner. So too for buildings in compliance for 2024 but faced with new equipment needs. These properties should look at options that will satisfy requirements beyond 2030 not just the most economic short-term solution. While it may be more expensive now, in the long-term buildings will come out ahead. Another factor when considering long-term planning is increased costs for materials and work as the deadlines approach.

Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com

By
Ira Meister,
President and CEO,
Matthew Adam Properties, Inc.

Much of the discussion recently in co-op and condo circles has revolved around a recent state law that removes the property tax abatement for buildings not paying prevailing wages. This applies to non-union buildings, mainly smaller properties.

While an important issue for concerned buildings, the elephant in the room is the disparity between the tax rate for one-three family homes and co-ops, condos and rentals. The latter group pays a significantly higher property tax rate than the first creating a larger tax bill. This unbalance has existed since 1981 despite numerous attempts to equalize it. The power for change rests with the City Council of New York, and progressive members representing districts with many single-family homes predominate.

But, before we get ahead of ourselves let’s look at the tax abatement issue.

Prior to enactment of the recent prevailing wage law, co-ops and condos since 1997 were entitled to an abatement on their property taxes ranging from 28.1 percent on properties assessed below $50,000 to 17.5 percent for properties assessed over $60,000. This is based on assessed valuation, a small percentage of the actual selling value.

The new law, pushed by Local 32BJ and other unions representing building employees, requires co-ops and condos to pay the prevailing wage with benefits, what union members receive, or lose the abatement. Employees included are doormen, porters, handymen, janitors, security guards and others who work at least eight hours a week in the building. In effect, it is the entire building service staff.

Whether or not buildings opt to pay the prevailing wage and maintain the abatement or exit comes down to dollars and cents. Some estimates say that the cost for a union employee is about 50 percent higher than a non-union employee. Buildings, in making the determination, look at the bottom line and analyze if it they benefit with the abatement and paying the prevailing wage, or opting out. In many cases a property gains by opting out.

Co-ops and condos have until February 15 of each year to decide the route for the upcoming year. Properties with more than 30 units and an assessed valuation of more than $60,000 and those with less than 30 units with assessed valuation of $100,000-plus need to file an annual certification that they are paying the prevailing wage.

A sidenote, because of the corporate structure of condos and co-ops, the abatement affects each differently. Shareholders in co-ops pay the real estate tax as part of the monthly maintenance fee. The abated funds are returned to the building but the cooperative must distribute the abatement. What many/most cooperatives do to recover approximately the same amount is to levy a per share assessment on all shareholders at the same time as they distribute the abatement. In condos, the unit-owner pays the taxes directly to the city and the abatement is returned to the unit-owner. To be eligible, the unit must be the primary residence.

While the abatement helps reduce taxes for residents of co-ops and condos, it doesn’t cover the disparity in real estate taxes between them and owners of single-family homes. The city tax rate for single-family homes is comparatively low compared to taxes in the region. To make up the difference for the city coffers, the burden is placed on co-ops and condos. They are classified as Class 2 properties as are rental buildings and valued as income producing buildings.

The actual assessment for co-ops and condos is based on a complex process that establishes a market value taking into account the property’s income and expenses compared to similar rental properties. From this, and other factors, the assessed value, upon which taxes are based, is determined. The result is that the co-op and condo assessment is much higher than it would be if based on the Class 1 single-family formula.

Right now, the focus is on the prevailing wage issue, which does impact a certain number of non-union buildings. Long-term this will have a negative impact on those properties, but the big, real focus is on the overall imbalance in the tax rates. With so much discussion on equity and affordability in housing, it will probably require a Solomon to find a solution, and then not everyone will be happy.

Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com