The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

We Need to Organize, People! By Guest Blogger, Keisha Jacobs

This post is written by Keisha Jacobs, an organizer and member of the Crown Heights Tenant Union.  Keisha acted as MC for Saturday’s march and picnic where the CHTU targeted several landlords to sign onto the CHTU demands.  For more information about CHTU, visit http://www.crownheightstenantunion.org 

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Hello and welcome. Welcome everyone. I’m so glad to see all of you here this afternoon. We are here today to show our solidarity as long standing tenants and new residents against the negative changes in our Crown Heights community. Predatory practices by banks, landlords and building management are forcing rent stabilized tenants out and overcharging new residents.

The stack of small injustices, the clerical mistakes on your rent receipt the administrative errors like cashing your rent check late. The miscommunication, repeated unreturned messages. Come on folks! You know that it looks like. They say they’re coming to FINALLY fix your sink. You take a valuable the day off only to have them never show up. Or the ceiling in your bathroom that’s coming down around your ears, but you see workmen fixing your new neighbors apartment because they pay twice as much as you do.

These things are not just oversights. It’s not incompetence.  It’s not mismanagement. This is not just a simple screw up.  It’s systemic. It’s tactical. You are being targeted.

There are speculators betting on our neighborhood, people. The predatory equity practices by the banks have placed a gamble on our homes. Our landlords have huge mortgages on the buildings we live in. Values set by appraisers using some arbitrary figures of which your rent controlled or rent stabilized apartment is not a factor. In order to cover their bets, your apartment needs to bring in a higher price. So to make up the difference they skimp on services. No heat or hot water for days during the coldest times of year. Major infrastructure items like plumbing, furnaces or water heaters don’t get repaired or replaced. The lobby and halls haven’t been painted in a decade. And repairs in your apartment go undone. All the while we are being dragged back and forth to housing court in an effort to evict us, or being harassed, or offered paltry buyouts to move us from our homes.

We need to organize, people. This is organizing. Get your neighbors together and if you haven’t already get your rent history and start your tenant association and join us.

On June 18 we will be at the Brooklyn rent guidelines board meeting at borough hall and we DEMAND A RENT FREEZE! We are here to fight. Enough is enough. Hands off our homes!

Join tenants from all over Brooklyn at Borough Hall on June 18th from 5:00 to 8:00 to demand a rent freeze!  If you’d like to travel with the Crown Heights Tenant Union, we’ll be meeting at 6:00 at Franklin and Eastern Parkway.  

MEDIA ADVISORY: HUNDREDS OF CROWN HEIGHTS TENANTS RALLY, MARCH FOR HOUSING JUSTICE

This Saturday the tenants of Crown Heights are taking to the streets o tell their landlords that they are fed up with the cycle of displacement and rent overcharges! Tenants will be rallying with elected officials before marching through the neighborhood — stopping at some buildings with the worst landlords — and then ending with a picnic!

Please join us for ANY part of the day.

Media Advisory for June 7th, 2014

Kerri White: (212) 479-3371 // (520) 507-5863 (c)

Joel Feingold: (608) 201-9345

Hundreds of Crown Heights Tenants Rally,March for Housing Justice

Crown Heights Tenant Union, elected officials, and housing advocates call for strengthened tenant protections to end displacement and systematic rent overcharges.

WHO The Crown Heights Tenant Union (CHTU), a new alliance of long-term residents and recently-arrived tenants who have joined forces to fight displacement, harassment, and the rapid loss of affordable housing in Crown Heights. The CHTU will be joined by State Assembly Members Walter Mosley and Karim Camara and housing organizers from the Urban Homesteading Assistance Board.

WHEN Saturday, June 7th 2014, 12:30 pm

WHERE Dr. Ronald McNair Park: Eastern Parkway and Washington Avenue

WHAT Rally and March to end landlord tactics that displace long-term, working-class residents — and to call for meaningful tenant power over affordable housing in one of New York City’s most rapidly gentrifying neighborhoods.

WHY Recent data shows that New York City faces a severe housing crunch, and that the cost of renting in New York City is sky-rocketing. This problem is particularly profound in Crown Heights, where the real estate industry is seeking to profit from rising rents through harassment and displacement of long term residents and illegal overcharging of newcomers. The Crown Heights Tenant Union is using a collective bargaining strategy to push back against these unethical and at-times illegal tactics. CHTU demands include: a five-year rent freeze, a ban on common methods landlords use to vacate rent regulated buildings and convert them into luxury apartments, and radical strengthening of State tenant protection laws. On Saturday, June 7th, the Crown Heights Tenant Union will be calling on BCB Capital Management, Pinnacle Realty, and TGB One Associates, among others, to comply with these demands through a legally binding agreement.

Putnam Portfolio and Stuy Town: Preservation Opportunities for Affordable Housing Once Lost to Speculation

Metro North Residents at Putnam Rally, photo courtesy of Tenants & Neighbors

In recent years, speculation in the affordable housing market is an accepted fact. Real estate investment targets the homes of low income families with the express intent to make financial profit from exploiting the residents who live in these buildings. This practice has failed. Over and over again. However, this hasn’t stopped the perception that massive profits can be gained by gambling on NYC’s affordable housing stock. The question in front of our policy makers now is how will we respond to this continuing and destabilizing crisis?

Stuyvesant Town is likely the most famous affordable housing complex that was victim to the overleveraging crisis of the early to mid-2000s. This is because both it is the largest housing complex with over 11,000 apartments and the fact that in 2006 it was purchased for an astronomical price of over $6 billion. This deal was in default within 3 years. Due to the complex nature of the financing, the buildings have been in limbo since 2009, but as was reported by the New York Times, the properties are back on their way to auction, and unfortunately, there are already willing bidders preparing to speculate on the buildings again.

Although, Stuy Town is the largest and most recognizable portfolio, it is hardly the only large complex on the edge of another critical moment. The Urban American Putnam Portfolio is a group of five former Mitchell Lama projects in upper Manhattan and Roosevelt Island that comprises nearly 4,000 units of what used to be protected, affordable housing. This portfolio is, similar to Stuy Town, at risk of being flipped again. Last week, Bloomberg News rendered an accurate and clear explanation of the history of the properties and the risk the portfolio is currently facing.

To give a brief history, in the height of the housing boom the portfolio was flipped twice under business plans to remove the affordability from the project, push out lower income residents and raise rents as high as possible. Urban American purchased the buildings for $918 million, taking out an $800 million mortgage financed by Fannie Mae. Fannie Mae also took the opportunity to invest at least $60 million in equity in the portfolio (although they won’t admit it) something which seems to be in direct conflict with their mission to protect affordable housing. It should come as no surprise that this isn’t the only time they’ve invested in these types of deals. To complicate matters further, it was discovered that the City Investment Fund partnered with Urban American in this predatory deal. The City Investment Fund includes money from the New York City and New York State retirement systems; a bitter irony considering many of the residents in these Mitchell Lama projects were public workers.

This $800 million mortgage is now due, which has inspired a flurry of activity around the portfolio. Urban American is looking for a new investment partner that would help them refinance. Brookfield Properties has expressed interest in buying a stake in a $1.1 billion refinancing. This is a $182 million increase over the last purchase price, which has stretched the rents to the highest level and allowed the conditions of the properties to decline. In the event of this refinancing both the City Investment Fund and Fannie Mae would be paid off, fulfilling their fiduciary responsibility at the expense of thousands of New Yorkers’ having an affordable place to live.

It DOESN’T have to be this way. We as a City can decide that we are going to fight to preserve these homes, as well as other buildings that are victims of this crisis. We can do this without creating diminution in value to the bondholders. Here’s what we need to do:

Fannie Mae: The mortgage was due in early May. As a deal has still not been completed, Fannie Mae is in a position as holder of the defaulted debt to push for a quicker preservation deal. Fannie Mae could also commit to finance a preservation deal that would protect the affordability and commit to improving the conditions. Additionally, Fannie Mae should take responsibility for the fact it invested in this portfolio and use its equity stake as additional leverage to push for a better outcome.

City Investment Fund/Comptroller Scott Stringer: The Comptroller should support the tenants and the preservation of affordable housing by taking a stance that doesn’t ignore the impact of his predecessor’s actions. Pension funds should never have been used in a deal that puts low and moderate income tenants at risk of losing their homes. However, there is no reason why the City Investment Fund couldn’t explore the opportunity to remain invested in these properties as long as an owner steps in who commits to affordability and decent housing.

HPD and other City Agencies: This portfolio represents a substantial amount of affordable housing in Upper Manhattan and Roosevelt island, and it should have never been allowed to lose its affordability protections. HPD and the other City Agencies should explore ways to once again tie rent restrictions to these buildings through the use of tax abatements or subsidy that would (a) provide much needed capital towards repairs and (b) add regulatory agreements that would keep the buildings affordable for the residents who call them home.

Mayor de Blasio and other Elected Officials: Mayor de Blasio, Speaker Melissa Mark-Viverito and the other Elected Officials should support the residents of these properties and the need to protect these units of affordable housing, a much needed resource of affordable housing in upper Manhattan and Roosevelt Island. They also could call all the above mentioned parties to the table with the tenants to negotiate how to preserve these properties.
This is not an easy task, in fact it will be difficult and tedious and with no assurances that we can win. However, the tenants are ready to stand up and take on this fight, the only question is who will stand with them?

This is not an easy task, in fact it will be difficult and tedious and with no assurances that we can win. However, the tenants are ready to stand up and take on this fight, the only question is who will stand beside them?

Friday UHAB News Round-Up!

It’s Friday and though it’s been a while, we’re back with a Friday News Round-Up!  This week, we thought we’d take advantage of all the work UHAB has been doing with press and highlight our campaigns in the news over the past couple of weeks. Check out the following articles pointing to UHAB’s work with organized tenants fighting back!

 Stabilis Capital:

Ridgewood tenants seek city assistance to wrest control of six buildings from Stabilis Capital,” NY Daily News, 5/12/14

Melrose Tenants Still in Limbo,” Mott Haven Herald, 5/12/14

Bronx Tenants Protest Building Conditions NY1, 5/6/14

After Foreclosure Crisis, Renters Suffer Under Wall Street Landlords, ” Al Jazeera America, 4/20/14

 

Crown Heights Tenant Union: 

Tenants Fight to Save Their Homes in Up and Coming Crown Heights,” Epoch Times, 5/15/14

Desperate Forces Align Over Affordable Rents,” The New York Times, 4/28/14

 

Three Borough Pool: 

Garodnick Calls for Citywide Action to Stop Predatory Equity,” Capital New York, 4/22/14

 

Putnam Coalition:

Renters ‘Sold Out’ by NYC’s Pensions Press de Blasio on Housing,” Bloomberg News, 5/14/14

 

We’re proud of our work and excited to continue mobilizing and growing tenant power throughout NYC!

 

Accepting Money to Leave

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Predatory equity takes place when landlords buy buildings based on the “projected” rents of a building rather than the current ones, subsequently paying huge amounts of money for rent stabilized affordable housing.  The only way the finances will work is by forcing out long term residents and bringing in higher paying ones.  This process, also known as gentrification, is taking place in rent stabilized, affordable housing all over New York City.

Predatory landlords do everything in their power to get long terms residents to leave their apartments such as ignoring tenant rights, decreasing basic services, or offering buy-outs.  While asking tenants to accept money to leave isn’t illegal, it almost always is against the tenants’ interests.   (Check out our one-pager on how to decide whether or not to accept a buy-out)  One super at 725 4th Ave in South Slope, Brooklyn spoke with the Gothamist about his experience asking tenants to accept buy-outs to move:

“He said he was hired with a mandate to clean up the building,” so he did.  It was his job.

After the fourth of fifth [buy-out], Duarte said, “I felt like I was doing wrong,” but people kept coming, and if he wanted to keep his job and support his family, he had to continue paying out. Twenty families left in the first round…Some tell Duarte that taking a buyout was the biggest mistake of their lives. He is sympathetic, but said, “I never pushed anybody out. They asked me, and I made an offer. I hoped they didn’t take it.

Long term residents living in Crown Heights, Bushwick, and other quickly gentrifying neighborhoods have their own stories of being offered buy-outs.  Most often than not, tenants who accept money to leave will have a hard time finding a new apartment in the neighborhood in a similar price range.  Families and communities are uprooted.  Furthermore, each time a family leaves, the price of an apartment unit increases, and the precious stock of affordable housing diminishes.

This crisis is not just a trendy Brooklyn one.  At 836 Faile St. in Hunts Point, tenants have been offered $3,000 to move out of their rent stabilized homes! (Likely this is to produce a cluster-site homeless shelter and allow private developers to profit off of evicting long term residents and exploiting the homeless crisis).

The more tenants understand their rights and the pros and cons of accepting buy-outs, the more they are determined to fight for their homes.  To learn about how to fight back against predatory landlords, come out to the Crown Heights Tenant Union meetings every 3rd Thursday of the month at 7:00 pm at the Center for Nursing the Rehabilitation.

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