A SoHo loft owner bought his loft in 1979 for about $40,000. He is now looking at a conversion fee. That fee is not a rumor or a worst case. On January 13, 2026, Bloomberg Law reported that New York's Court of Appeals confirmed it in a 6-1 ruling.
If you are shopping for a loft in SoHo or NoHo this year, or you own one and are weighing a sale, this is the fact pattern that matters more than square footage or exposed brick. A meaningful share of the neighborhood's inventory still carries the JLWQA designation that the Department of Cultural Affairs says dates to 1971, and the court decision that most people assumed would finally settle the question instead did the opposite. It made the fee attached to that designation collectable.
What the Court Actually Decided in January
The designation in question is Joint Living-Work Quarters for Artists, or JLWQA, a use category the city created in 1971 to let artists legally occupy former manufacturing lofts on the condition that at least one resident held a certification from the Department of Cultural Affairs. For decades the rule sat there mostly unenforced. City figures from 2022 showed roughly 1,600 units still carrying the JLWQA designation, with only 36 of them occupied by an actual certified artist.
The 2021 SoHo/NoHo rezoning was supposed to modernize this. The Court of Appeals decision describes a way for JLWQA owners to convert their units to ordinary, unrestricted residential status by paying a one-time, non-refundable contribution of $100 per square foot into a city-administered SoHo-NoHo Arts Fund. A coalition of residents sued over the fee. As SBJ Law reported, an appellate panel agreed in December 2024 and struck the fee down. Then the Court of Appeals reversed that decision.
The upshot for anyone transacting in these two neighborhoods right now: the fee stands, the conversion pathway is open, and the underlying zoning restriction has not gone anywhere for units that stay unconverted.
Not Every SoHo Loft Carries the Same Exposure
The mistake I see most often is buyers assuming every loft south of Houston Street carries the same risk profile. It doesn't. Before falling for a listing, find out which category the building actually sits in.
| Building type | Governing body | Arts Fund exposure | What to verify |
|---|---|---|---|
| JLWQA co-op or condo, unconverted | City zoning resolution, Certificate of Occupancy | Full $100/sq ft base fee applies on conversion | Whether the unit's C of O still reflects the JLWQA designation |
| State Loft Law building (Interim Multiple Dwelling) | NYC Loft Board | — | Whether legalization is complete or still in progress |
| Fully converted or never-JLWQA building | Standard residential zoning | — | — |
The New Museum Building at 158 Mercer Street was built in the 1890s as an office building and later housed the New Museum of Contemporary Art before the museum moved to the Bowery.
The Math Behind $100 a Square Foot
A single number like "$100 per square foot" doesn't mean much until you run it against real inventory. SoHo lofts often run 2,000 to 3,000 square feet, sometimes more. At 2,500 square feet, a size owners and their attorneys point to as typical for these units, the $100-per-square-foot base calculation comes to roughly $250,000, which Pacific Legal Foundation describes as an average fee for a typical loft.
As amNewYork reported, the city's own rate schedule adjusts the fee upward by 3 percent a year, which means the amount due rises above the $250,000 base calculation as annual increases take effect.
The Case Isn't Over, and Waiting Has a Cost
The residents' attorney, Christopher Kieser, filed a petition for certiorari with the U.S. Supreme Court this spring, and SCOTUSblog lists the case as No. 25-1187; it has drawn support well beyond the original parties. The Manhattan Institute says its amicus brief was joined by the National Association of Realtors, the New York State Association of Realtors, the National Association of Home Builders, and the National Apartment Association, while the Cato Institute and Council Member Marte filed separate briefs of their own. The city filed its opposition on August 3, 2026, the petitioners replied on August 17, and the case is now set for the justices' private conference on September 28, 2026, when they will decide whether to hear it at all. Kieser has said publicly that even a favorable outcome at that stage would put a new decision more than a year out. Marte, whose district covers SoHo and NoHo, is also looking at a City Council fix to lower or eliminate the fee, but nothing has passed as of this writing.
The loft owner put it simply after the ruling, as amNewYork reported: "We put all our energy, our blood into these lofts."
What Actually Changes at the Closing Table
For buyers, this means the due diligence conversation with your attorney needs to start with the unit's Certificate of Occupancy, not the finishes. If a loft still carries the JLWQA designation and you are not a certified artist, you are either buying a restriction that follows the property or budgeting for a six-figure conversion cost before you can treat the space as an ordinary home. Financing gets harder to line up on unconverted units, since lenders weigh the uncertainty of a restricted Certificate of Occupancy differently than a clean residential one.
For sellers, particularly those who inherited a loft from a family member who held the original artist certification, the calculation is different but no less concrete. A 2022 amendment to the Multiple Dwelling Law, as BBG LLP explains, lets a permanent occupant who lived in the unit before December 15, 2021 continue to occupy it lawfully without the certification. That protection does not run with the property to a future buyer. If you plan to sell to someone who isn't certified, that issue belongs in the pricing conversation from the start, not discovered at attorney review.
The approval path also differs slightly between co-ops and condos, so build extra time into your timeline either way.
Questions Worth Asking Before You Sign
Do I have to be a certified artist to buy a SoHo loft today? Only if the specific unit still carries an unconverted JLWQA designation and you want to occupy it without paying the conversion fee. Buildings that completed conversion, or that were never JLWQA to begin with, carry no such requirement.
A cast-iron loft with twelve-foot ceilings and six arched windows is still one of the more distinctive things you can buy in Manhattan. What's changed is that the zoning history behind that facade is no longer a dusty footnote. It's an active cost with a court record behind it, a legislative fight still underway, and a fee that gets more expensive every year the parties keep arguing. If you're evaluating a purchase or a sale in SoHo or NoHo this year, that history deserves the same scrutiny as the kitchen.
If you're weighing a move in this market, whether you're chasing the light through a loft's original windows or trying to price what a family unit is actually worth with this fee attached, Kobi Lahav has walked buyers and sellers through exactly this kind of building-level complexity before. Contact Kobi to talk through what a specific SoHo or NoHo address actually carries on its Certificate of Occupancy, and what that means for your offer.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
