Meng and Suozzi Lead NY Delegation Members in Calling for Co-Ops and Condos to be Eligible for Coronavirus Relief Funds
April 28, 2020
Lawmakers send letter to Treasury Secretary and head of SBA; Co-ops and condos critical to Queens and NYC
QUEENS, NY – Today, U.S. Reps. Grace Meng (D-Queens) and Tom Suozzi (D-Queens/L.I.) led members of the New York congressional delegation in calling for co-ops and condos to be eligible for loans under the federal Paycheck Protection Program (PPP).
In a letter to Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza, the lawmakers called for immediate reconsideration of the decision to exclude co-ops and condos from PPP loans.
"Co-ops and condos are a critical part of Queens and New York City, serving as homes for so many residents throughout our borough and city," said Meng. "They are integral parts of our communities, and like many other entities are being impacted by the COVID-19 pandemic. They deserve relief and we urge the Treasury Secretary and SBA Administrator to make it happen so that co-ops and condos are not forced to endure further financial burdens as a result of this crisis."
"Residential housing cooperatives and condominium associations must become eligible for Paycheck Protection Program loans under the CARES Act to ensure their financial stability throughout the COVID-19," said Suozzi. "I will continue to urge the Federal Government to deliver more help to communities hit hardest by the pandemic like those in Queens and throughout all of New York."
The PPP provides coronavirus relief funds through guaranteed loans to small businesses, and the loans are forgiven if certain conditions are met. The initiative, which is administered by the Small Business Administration, was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the third coronavirus relief bill passed by Congress and enacted into law last month.
A copy of the letter is below and the correspondence can be viewed here.
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The Honorable Steven Mnuchin
Secretary
U.S. Department of Treasury
1500 Pennsylvania Ave., NW
Washington, DC 20220
The Honorable Jovita Carranza
Administrator
U.S. Small Business Administration
409 3rd Street SW
Washington, DC 20416
Dear Secretary Mnuchin and Administrator Carranza:
We write to ask that residential cooperatives and condominiums be considered eligible under the Paycheck Protection Program (PPP) loans which are administered by the U.S. Small Business Administration.
In New York City alone, there are well over 100,000 units of affordable cooperative and condominium housing units. As you know, New York City has been deemed the epicenter of the epicenter. The devastating health impacts of the pandemic has thereby brought enormous financial losses to these units. During this crisis, these units are facing the same dire liquidity challenges as other businesses, including declining revenues due to job losses, declining rental income from commercial tenants, and lost revenue. And due to the stay-at-home statewide orders, there are significant increases in utility usage (water, electric, and fuel). Many of the residents are also seniors with fixed incomes.
Furthermore, while residential co-ops are considered C-Corps, they act as nonprofit entities, since all their monthly maintenance-rent revenue is applied to operate their residential buildings. Such maintenance operations include, but are not limited to, garbage collection, plumbing, electrical and emergency repairs, landscaping and providing services to seniors – all of which are deemed essential duties and responsibilities.
As you know, Congress created the PPP in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, with the intent to prevent financial harm to small businesses and their employees. On April 2nd, however, SBA issued an interim final rule that added restrictions rendering residential cooperatives and condominiums ineligible for PPP loans.
We urge you to reconsider this interim final rule and ensure these entities – as well as their employees – are not excluded from the PPP and any related benefits. Ultimately, the availability of PPP loans would be a lifeline for these entities to pay their essential employees, so they may meet other critical operating expenses.
We thank you for this consideration, and look forward to your prompt reply.
Sincerely,