The 15% rule is shorthand for the conversion threshold: the share of a building’s units a sponsor had to put under contract before a non-eviction plan could be declared effective and a rental building could actually convert. At 15%, a plan went effective, and the buyers making up that 15% could be sitting tenants or bona fide outside purchasers. The 2019 Housing Stability and Tenant Protection Act (HSTPA) rewrote that math. It scrapped eviction plans altogether and lifted the non-eviction threshold to 51% of the tenants in occupancy, a jump steep enough that conversion filings across the city fell off a cliff. The underlying authority is Section 352-eeee of the General Business Law, part of the Martin Act, administered by the New York State Attorney General.
Fifteen percent never vanished, though; it just narrowed to specific cases. Legislation in 2022 brought the threshold back to 15% for small buildings of five or fewer units. Then the 2025 Affordable Housing Retention Act (AHRA) carved out a pathway for certain larger affordable-housing developments to convert at 15% of units sold to tenants or bona fide purchasers, on the condition that income-restricted units stay permanently affordable and the sponsor make a good-faith effort to sell at least 51% within the condominium’s first five years. What this means in practice: the number your building has to clear depends on its size and the pathway it qualifies for, and a percentage quoted in an older black book may be out of date. The red herring and black book stages still bookend a conversion; the effectiveness threshold is simply the piece that keeps moving.
A conversion lives or dies on getting that threshold right, and on the numbers behind the plan holding up. MD Squared sits on the consulting side of that work, partnering with your plan attorney to build the budget and Schedules A and B, pressure-test the first-year projections, and move the plan through the Attorney General’s review. See what our Offering Plan Consulting service covers, or start a conversation about the building you have in mind.
