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Q&A
Challenges in predicting future costs of reformed TPT program
2:14:50
ยท
113 sec
Deputy Commissioner Kim Darga explains the difficulties in predicting future costs for the reformed Third Party Transfer (TPT) program, highlighting various factors that impact cost projections.
- Uncertainty in predicting the redemption rate for properties, which historically was over 80% but could drop significantly with program reforms
- The number of properties transferred greatly affects overall costs
- The need to balance the number of properties per round to ensure program success
- Council Member Sanchez notes that while initial costs may be high, the program could lead to improved compliance from property owners over time
Kim Darga
2:14:50
So I think one thing that is really tricky in predicting the future, well not only are we still working through some of the big legal questions, but I think one of the biggest challenges is predicting the redemption rate for properties.
2:15:05
So historically the redemption rate was over 80% of properties from the commencement of an interim action until transfer.
2:15:20
We expect as we reform the program and focus on the properties with the highest amount of financial and physical issues that that redemption rate could drop really significantly.
2:15:34
So if we look at the last round of TPT, there were four twenty buildings at commencement, just over 60 transferred.
2:15:43
So the costs that we were referencing are related to just over 60 buildings.
2:15:49
That is aside from staffing costs.
2:15:53
We, let's say going forward we end up with the opposite where only 20 ish percent of the buildings redeem, the cost is significantly higher.
2:16:04
So I think as we reform the program, I think we want to be in a position where we have some ability to set the number of properties that make sense per round because what we're going to want to do at least in that first round after any legislative changes is make sure that we're setting the program up to be successful.
2:16:25
So if we start with 400 and we end up transferring three fifty, the cost of the city would be much higher than if it's less than 60 buildings.
Pierina Sanchez
2:16:36
But hopefully we'll all work ourselves out of a job.
2:16:38
Right?
Paula Z. Segal
2:16:38
Yeah.
2:16:38
It'll be
Pierina Sanchez
2:16:39
very expensive upfront.
2:16:40
And then when owners realize that they will lose their properties yep.
Gale A. Brewer
2:16:43
Yeah.
Ahmed Tigani
2:16:44
Sorry, Commissioner.