Queens housing co-ops and condominiums will be eligible to participate in the Paycheck Protection Program (PPP), after Congresswoman Grace Meng worked with her congressional colleagues and the President’s Co-op & Condo Council to provide relief.
This change was included in the $900 billion coronavirus relief package that was signed into law on Dec. 27. The Paycheck Protection Program is the Small Business Administration’s (SBA) signature coronavirus relief initiative to assist struggling small businesses during the national health crisis.
In March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act created PPP which provides forgivable loans provided certain conditions are met, but SBA subsequently rendered housing co-ops and condominiums ineligible to participate in the program.
“Financial relief is finally available to housing co-ops and condominiums in Queens who have faced declining revenues and increasing costs during COVID-19. I am relieved that they will soon be able to participate in the Paycheck Protection Program and get the assistance they need,” Meng said.
PPP provides forgivable loans if 60 percent is used for payroll and 40 percent is used for non-payroll expenses like rent, mortgage interest payments, or utilities. The program closed in August despite over $130 billion remaining.
The $900 billion coronavirus relief measure reopens PPP and expands eligible expenses to also include personal protective equipment, supplier costs, and business operations software and human resources needs.
According to Meng, COVID-19 has placed an unprecedented strain on over 100,000 affordable cooperative and condominium housing units in New York City alone.
“Leaving out co-ops and condominiums from PPP was a disservice to them despite their economic hardship,” Meng said.
Geoffrey Mazel, Esq., legal advisor of Presidents’ Co-op & Condo Council, said the inclusion of co-ops eligibility for forgivable PPP loans in the Stimulus Package will have a profound impact on the co-op community.
“The many co-op groups partnering with Congresswoman Meng on this important issue was a model of how good government is supposed to work,” Mazel said.
Doug O’Brien, president and CEO of the National Cooperative Business Association CLUSA International, said the co-op community is grateful for leaders in Congress like Meng, who understands the important role that housing co-ops play in their communities and the local community.
“NCBA CLUSA greatly appreciates the leadership of Congresswoman Meng to provide much needed certainty for housing cooperatives to participate in the Paycheck Protection Program,” O’Brien said. “Housing co-ops, like all cooperatives, are businesses owned and controlled by their member owners. Like other small businesses weathering the ongoing impacts of the pandemic, these co-ops keep employees on payroll for critical ongoing operations such as maintenance, safety, and other essential needs vital to the member-owners.”
O’Brien applauded the efforts of Meng who, alongside members of the New York delegation including Rep. Nydia Velázquez and Senator Chuck Schumer, have worked tirelessly on the issue since the PPP launched in April.
Meng and Congressman Tom Suozzi led members of the New York congressional delegation in a letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza urging them to make co-ops and condominiums eligible to participate in PPP.
In May, Meng along with Schumer, Velázquez, Rep. Elliot Engel, and other New York lawmakers called on SBA to clarify guidance on PPP eligibility for co-ops and condominiums. The House passed the Heroes Act in May and the updated Heroes Act 2.0 in October that expanded PPP eligibility to include co-ops and condominiums.
Meng thanked her congressional colleagues and the Presidents’ Co-op & Condo Council for their support on the issue. The congresswoman is encouraging all to apply once the program resumes, as she continues to push for more assistance to help families and workers in Queens in the coming months.
“I am glad that we finally secured eligibility for co-ops and condos in the recent coronavirus relief package. Cooperatives remain a critical source of affordable housing for Queens and New York families and they must be made whole in the midst of this unprecedented public health and economic crises,” Meng said. “Opening up the PPP to these entities will give them this lifeline.”