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Council urges funding for preservation, seeks costs for third-party transfer reform
Summary
Council members and HPD discussed preservation tools including Neighborhood Pillars, and the proposed third-party transfer reforms. HPD said costs will depend on program design and involve multiple agencies; an earlier round of neighborhood-restore support has totaled about $79 million, and capital needs for transfers can be high.
Council members urged HPD to pair legislative reforms aimed at negligent landlords with robust budget resources to operate and implement new preservation tools.
Council Member Pierina Sanchez highlighted the Housing Rescue / Resident Protection Act (third-party transfer reform) and told HPD the committee expects the legislation to be matched with budgetary resources. Deputy Commissioner Darga told the committee that exact staffing and capital costs for an expanded third-party transfer (TPT) program depend on the final program design and interagency roles. Darga said a prior program round routed roughly $79 million to Neighborhood Restore to manage interim ownership, and that city capital and neighborhood-restore expenses have historically been major costs. She estimated that future per-unit capital costs for remediation could be on the order of $250,000 per unit (a rough forward-looking figure for rehabilitation), but stressed the amount would depend in part on redemption rates and eligibility criteria.
HPD said it is discussing technical assistance for struggling owners, including expanding an owner resource center modeled on the 1–4 family homeowner help desk, and would seek to coordinate with Department of Finance, Law Department and DEP as part of any expanded TPT program. In addition, HPD said Neighborhood Pillars has been relaunched and, with $15 million in FY26, is expected to support modest production (HPD estimated roughly 100 units per year under that specific term sheet level) while a wider set of preservation term sheets and the New York Acquisition Fund would address many additional preservation needs.
Why it matters: Third-party transfer and other preservation tools are targeted at distressed properties and negligent owners; without adequate capital and operational funding, council members warned, legislation risks being unenforceable or produce a slow rollout.
What comes next: HPD agreed to supply the council with more detailed cost estimates, an assessment of interagency needs and a proposed timeline for when an initial round could be executed (HPD suggested initial staffing and outreach costs could begin in mid‑2026 after tax‑lien sale timing).
