Housing co-operatives in the USA are now able to participate in the Paycheck Protection Program (PPP), a Covid-19 relief initiative run by the Small Business Administration (SBA).
PPP was created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 to provide forgivable loans to small businesses provided certain conditions are met. The SBA initially rendered housing co-ops ineligible to participate in the programme.
Since then apex NCBA CLUSA led efforts in coordination with the National Association of Housing Cooperatives and other organisations within the co-op community to urge the inclusion of housing co-ops. Those who championed the provision included Sen. Minority Leader Chuck Schumer and House Small Business Committee Chairwoman Nydia Velázquez championed this provision to ensure that housing co-operatives could equitably access this federal programme.
US Rep. Grace Meng (D-Queens) has also been working her congressional colleagues and the President’s Co-op & Condo Council to reverse this omission. Her advocacy efforts included leading members of the New York congressional delegation in a letter to Treasury Secretary Mnuchin and SBA Administrator Carranza urging them to make co-ops and condominiums eligible to participate in PPP.
“Financial relief is finally available to housing co-operatives in Queens that 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,” said Ms Meng.
“Covid-19 has placed an unprecedented strain on the affordable co-operative housing units in New York City alone. Leaving out co-ops from PPP was a disservice to them despite their economic hardship. I was proud to press the Administration on this issue, and to help secure language in the Heroes Act and Heroes Act 2.0, which passed the House in May and October, respectively.”
She added that co-operatives remained “a critical source of affordable housing for Queens and New York families”.
“Opening up the PPP to these entities will give them this lifeline. I want to thank my congressional colleagues and the president’s Co-op & Condo Council for their partnership on this issue. I encourage all to apply once the program resumes, and I will continue to push for more assistance to help families and workers in Queens in the coming months.”
NCBA Clusa, which represents country’s co-ops, welcomed the news. “NCBA CLUSA greatly appreciates the leadership of Congresswoman Meng to provide much needed certainty for housing cooperatives to participate in the Paycheck Protection Program,” said president and CEO Doug O’Brien.
“Housing co-ops, like all co-operatives, are businesses owned and controlled by their member owners. Like other small businesses weathering the on-going impacts of the pandemic, these co-ops keep employees on payroll for critical on-going operations such as maintenance, safety, and other essential needs vital to the member-owners.
“The co-op community is grateful for leaders in Congress like Congresswoman Meng, who understands the important role that housing co-ops play in their communities and the local economy. We applaud the efforts of Congresswoman Meng who, alongside members of the NY delegation including Chairwoman Velázquez and Leader Schumer, have tirelessly worked on this issues since the Paycheck Protection Program launched in April.”
“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,” said Geoffrey Mazel, Legal Advisor for the president’s Co-op & Condo Council (PCCC).
PPP provides forgivable loans if 60% is used for payroll and 40% is used for non-payroll expenses like rent, mortgage interest payments, or utilities. The USA’s 65,000 co-operative businesses generate more than US$75bn (£60bn) in annual wages.