The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

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Ridgewood Tenants and Elected Officials Speak Out!

Denise Serrano of 1821 Cornelia Street Speaks to Speaker Quinn, CM Velazquez, CM Reyna, Assembly Member Mike Miller

Denise Serrano of 1821 Cornelia Street Speaks to Speaker Quinn, CM Velazquez, CM Reyna, Assembly Member Mike Miller, Antonio Reynoso

Congresswoman Nydia Velazquez, City Councilwoman Diana Reyna and State Assemblyman Mike Miller, attorneys and advocates joined tenants from six extremely distressed buildings in Ridgewood, Queens on Monday of this week. The elected officials came together with the tenants to demand that Stabilis Capital Management, the mortgage holder on the properties, support a plan that will keep them permanently affordable. Tenants are suffering from leaks, mold, rodent infestation, falling ceilings, and a lack of basic plumbing, will also seek emergency repairs.

In an exciting move, tenants will be appearing in bankruptcy court with the help of pro bono counsel Cleary Gottlieb Steen & Hamilton, LLP and Queens Legal Services to advocate for their right to safe and decent housing.

“As a resident of 1821 Cornelia St., I am concerned about the future of these six buildings,” said Tenant Leader Denise Serrano. “I grew up in Williamsburg, and thanks to rising rents my family was forced to move. I raised my children in this building, and on behalf of myself and my neighbors, I do not want to see that displacement happen again here.”

Stabilis’s purchase of the mortgage notes on these six buildings mirrors a recent trend wherein companies, armed with private equity money, acquire debt on regulated rental properties. The properties are often severely physically distressed due to years of foreclosure, and are often located in New York City’s gentrifying neighborhoods. Tenants and advocates fear that these acquisitions closely resemble speculation in the market before 2008, when private equity firms purchased large portfolios of rent-regulated apartment buildings, leading to foreclosure and mass deterioration of the housing stock. This week, tenants, elected officials, and organizers are calling on Stabilis Capital Management to break with this pattern and support the transfer of the properties to a non-profit developer who would provide extensive physical rehabilitation while keeping the properties affordable in perpetuity.

Tenants, who have been organizing for several months, have asked CATCH – a non-profit that practices mutual housing – to try and to take over their buildings.

“These buildings must be transferred to an owner who will rehabilitate them and keep rent affordable,” said Congresswoman Nydia Velazquez. “Tenants have suffered enough already because of poor managerial decisions.”

“I’m here today to support my constituents and neighbors who have been suffering from these horrific and unimaginable living conditions for over five years,” said Assemblymember Mike Miller. “I support the transfer of these properties to a non-profit developer who would provide the necessary repairs while keeping the rents affordable.”

“Stabilis must repair these buildings or sell them to a good developer who will” said City Council Speaker Christine C. Quinn. “Whether these homes are in foreclosure or bankruptcy court, Stabilis’ obligations to provide services to tenants remains the same.  I want to thank Congresswoman Velazquez, Councilmember Reyna, UHAB, Legal Services, HPD, and especially all of the tenants for their hard work to save these homes.”

“Today, after months of discussion, organizing, and legal advocacy, we are able to stand before Stabilis and tell them: ‘We have a plan.’,” said Councilmember Diana Reyna. “We have a plan that will put an end to five years of undignified living conditions, that will ensure that the future of these families remains in the buildings they call home, and that will not undermine Stabilis’s business model. We are calling on Stabilis to include the tenants in any agreement to ensure that these properties are up to code and in the hands of those who live in the buildings.”

We can’t keep letting these vicious cycles sent buildings deeper into distress. Whether they live in a building in foreclosure, a building in bankruptcy or not, all tenants have the right to safe, decent housing,” said Public Advocate Bill de Blasio. “When properties get this bad, we need everyone to come to the table – including banks and lenders – to put them back on sustainable tracks. Tenants deserve nothing less.”

“The blight and distress of these properties is not only hazardous to the well being of the families who live there, it also threatens the stability of the surrounding neighborhood,” said HPD Commissioner Mathew M. Wambua. “We are resolved to use our resources and enforcement tools, such as those in the Alternative Enforcement Program, to keep the pressure on negligent landlords and owners to ensure that these tenants get relief and the quality of housing that they deserve. We thank our elected officials for their partnership and support in working to end the cycle of overleveraging and distress that has plagued these buildings.”

 “The tenants in these six properties have suffered at the hands of predatory equity groups for long enough,” said Kerri White, Director of Organizing and Policy at the Urban Homesteading Assistance Board. “These buildings need to be transferred to a responsible developer with the capability of renovating them while keeping rents affordable for the residents. We will do anything in our power to reach this outcome, whether its demanding Stabilis work with HPD on a preservation sale, or advocating through the bankruptcy court, the tenants will keep fighting for what they deserve.”

Friday News Round Up!

Happy February, the shortest month!

  1. A rent strike in Sunset Park may be coming to an end. We’re currently working with a tenant association on 46th Street in Sunset Park that has been on a rent strike for nearly a year. Finally, after several twists and turns, the Brooklyn Supreme Court has moved to appoint a receiver, which will take the building (which is in foreclosure) out of the hands of the negligent slumlord. If the receiver successfully takes over the building and makes agreed upon repairs, we suspect that the Tenants Association will move to end the rent strike.
  2. This excerpt from Ed Koch and the Rebuilding of New York City was published in Gotham Gazette nearly three years ago. The excerpt discusses his 5-billion ten year housing plan, which, Jonathan Soffer writes, “has generally been viewed as the greatest success of his 12 year mayoralty.” Koch’s housing plan so drastically changed the shape of affordable housing in New York that it is hard to effectively imagine a world apart from it. Many of the programs that his plan initiated made it possible for UHAB residents to become cooperators and homeowners. However, the program was not so much an affordable housing plan as it was a plan to spur economic development — to transfer properties away from the city and turn them into tax-revenue generating, privately owned apartments. Advocates at the time questioned the “low-income” nomenclature, arguing that the plan favored the middle class and did little to alleviate the housing burden for very low income people. Regardless, the former mayor’s housing legacy was impactful and important, changing the face of development in New York and at the very least, emphasizing that the city had a role to play in affordable housing.  (For more on the recently deceased former mayor, listen to Juan Gonzalez and Amy Goodman talk about the controversial mayor at Democracy Now.)
  3. We’re working with several buildings in Crown Heights right now, and the tenants are definitely feeling the threat of displacement. This article in Narrative.ly was written in part by a former UHAB employee, and details the changing landscape of Franklin Avenue and what that means for long term residents.
  4. Last week, ANHD published a report, “Affordable Neighborhoods: Housing Policy for the Future of New York City.” The report lays out nine items that make up the affordable housing platform that ANHD and the affordable housing community plan to call on Mayoral Candidates to address.
  5. Foreclosure rates are falling, according to Housing Wire, and lending is up. We don’t happen to think that this is the most reliable barometer for housing market health. As lending is coming back, we need to stay vigilant that banks do not return to their pre-2008 lending methods!

That’s all for today! Stay tuned for more from us, and even some upcoming guest bloggers!

Press Release: FRUSTRATED TENANTS HOLD BANK AND PREDATORY LOAN SERVICER RESPONSIBLE FOR DEPLORABLE CONDITIONS

Monday, December 10th, 2012, Brooklyn, NY—Tenants at 1507 St. Johns Place, represented by South Brooklyn Legal Services and Bedford-Stuyvesant Community Legal Services (programs of Legal Services NYC) have filed a motion demanding that Wells Fargo and its servicer Lone Star Funds advance the funds necessary to repair deplorable conditions in their building. The property, in foreclosure since 2010, has a current total of 105 city code violations on 21 units, leaving the frustrated tenants no choice but to ask the court to intervene on their behalf.

The rent-regulated building, home to nearly twenty low-income families, was purchased by S&Z Capital and Development in May 2006. S&Z has a history of mismanagement throughout Brooklyn and has lost several of its buildings through foreclosure—a pattern that was repeated at the St. Johns property when Citibank began foreclosure proceedings in March 2010. Lone Star Capital, a private-equity investment group based in Texas, purchased the delinquent mortgage in January 2011. Lone Star sold the note to Wells Fargo a short time later, but continues to service the mortgage and has taken over the foreclosure case.

Lone Star drew recent local scrutiny following their purchase of several distressed mortgages portfolios in Manhattan, when it was accused by tenants, elected officials and HPD of attempting to profit from a speculative sale of the properties. Although Lone Star has not yet attempted to sell the St. Johns property, conditions have seriously declined since the firm took over the mortgage—leaving the tenants to deal with pervasive mold, leaks, peeling paint, falling and cracked ceilings and inconsistent hot water. Some tenants are even experiencing health issues as a result of dangerous conditions in their apartments. With this legal motion, the tenants are demanding that Lone Star advance the funds necessary to repair these hazardous defects.

“Shelter is a basic human right that many New Yorkers have too often been denied. The tenants of 1507 St. Johns Place deserve to live and raise their families in a safe environment,” said Representative Yvette D. Clarke. “I wholeheartedly support these tenants in their fight to improve the conditions in their building and preserve affordability. We cannot allow these housing units in Brooklyn to be lost to speculative investment schemes that drive tenants out of their homes.”

“It is important that Lone Star be held accountable and take full responsibility for the deplorable living conditions under which these 20 families live on a daily basis,” said State Senator Eric Adams. “The irresponsible mismanagement of 1507 St. John’s Place is a clear reflection of Lone Star’s disregard for its tenants and the community at large. We will not tolerate exploitation by investors whose only concern is their profit margin!”

“Lone Star must bring relief to tenants and immediately release funds to make much needed repairs in this building,” said City Council Speaker Christine C. Quinn. “The courts have confirmed that lenders can be held responsible for conditions at buildings like these, but Lone Star shouldn’t wait for tenants to file actions or judges to make decisions. They should fix the building now.”

“Our clients are living in squalor because of the outrageous investment schemes of Lone Star Funds and Wells Fargo,” said Rachel Hannaford, Staff Attorney at South Brooklyn Legal Services. “Many tenants have been living in the building for decades and have never witnessed such unhealthy and unsanitary conditions. Tenants have developed rashes because of pervasive mold and have to contend with intermittent heat and hot water. Repairs are simply not being done. We have filed this motion so that the Court understands the seriousness of the situation and exercises its power to ensure that the tenants do not suffer at the hands of irresponsible and callous speculators.”

“Lone Star has made a practice of purchasing debt some of New York City’s most vulnerable buildings because they, like other investors before them, feel they can make a profit off of exploiting affordable housing” said Kerri White, Co-Director at the Urban Homesteading Assistance Board. “This business plan is destined for failure as recent history has already taught us. Lone Star must take responsibility for the deteriorating conditions tenants face under their control as well as the impact their financial decisions have on the residents and communities where these buildings reside.”

Contact: Rachel Hannaford, 718-237-5513 Kerri White, 520-507-5863

###

Panel Discussion Holding Landlords Accountable Monday in the Bronx

On Monday, I will be joining an impressive group of housing experts to discuss current housing issues and possible solutions for holding bad landlords accountable. This forum was inspired by the recent City Limits issue,”The Phantom Landlord” (a must read if you haven’t already) which focused on one landlord Frank Palazzolo and his inexplicable ability to remain untouched despite his involvement in many, many properties where bad conditions have been disastrous and even deadly for the residents. This forum will talk about possible legislation and strategies for holding landlords like this accountable.

The discussion will be held on Monday, April 23rd at the Scala Auditorium on the first floor of the Leo Engineering Building, 3825 Corlear Avenue (a block west of Broadway, between E. 238th and E. 240th streets). Please join if you can it should be a very interesting discussion!

For more information on who the panelists are and what will be discussed check out Bronx Matters!

NY Daily News: “Determined West Farm Tenants Band Together to Fix Up Neglected Bronx Slum Building, Work to Form Co-op”

The New York Daily News  reported on an amazing group of tenants today. The tenants at 943 E 179th street, have shown amazing resilence in face of a seemingly hopeless situation. Their building has been in foreclosure for several years, the owner has disappeared, and the court appointed a receiver has yet to step foot in the building. This is what abandonment looks like in New York today. With nobody around to make repairs or take responsibility many tenants in this situation either leave or are forced to live in horrific conditions. The tenants at 943 decided to take a different rout. They’ve been collecting their own rent for several months which goes into an account under the Tenant’s Association, and they have been using it to make their building livable again.

The residents still have a long way to go. They want to become a Co-op because  after years of poor management, they feel that no one will look after the building better than themselves. After seeing what they’ve done so far, it would be hard to disagree with them. Check out what the Daily News has to say about these tenants:

From New York Daily News: Jacqueline Rodriguez and fellow tenants Jose Luis Alameda (left) and Marcelo Alameda at 943 E. 179th St.

Some tenants in slum buildings with rats and leaks stop paying rent. Others move out, complain or ask for handouts.

But when their Bronx tenement crumbled due to landlord neglect, the tenants at 943 E. 179th St. banded together to collect rent and make repairs.

Now they boast new kitchen cabinets, refrigerators, stoves, walls and floors, and they could become homeowners soon.

With help from the Urban Homesteading Assistance Board, the tenants hope to buy their beloved West Farms building outright and form a co-op.

Department of Housing Preservation and Development officials harbor concerns about tenants performing renovations without permission rather than letting the city force landlords to make repairs.

But Jacqueline Rodriguez and her neighbors were tired of waiting.

“Most of the people here have been here a long time,” said Rodriguez, tenant association president. “They don’t want another landlord. No one is going to take care of the building better than the people who live here.”

Tucked between E. Tremont Ave. and the Bronx Zoo, 943 E. 179th St. began to deteriorate in 2007, after a Hamptons-based landlord purchased the four-story walkup, said Rodriguez, 32, a recreational therapist who grew up in the building.

Broken pipes and windows went unmended and cockroaches swarmed to the slum. The 9-unit building still has 248 open housing code violations. It entered foreclosure in 2008, with Lehman Brothers holding the mortgage: a nightmare scenario, said Kerri White, UHAB organizer.

“There were no repairs at all,” said Rodriguez, 32, a mother of twin infants. “We suffered without hot water for six months and without heat for months…You pay your rent and you don’t know where the money is going.”

The tenants found out about the foreclosure in 2010, when they were instructed to pay their rent to Con Edison via city marshals. Their landlord owed the utility $38,000, Rodriguez said.

The revelation spurred Rodriguez and her neighbors to form a tenants association and corporation. They opened a bank account to hold their rent in escrow.

In five months under the new system, the tenants have used their rent money to remodel several kitchens, buy new appliances and hire an exterminator.

“When I got here there were roaches and rats all over, in every crevice,” said exterminator Major Meyers of Complete Enterprize. “Now there are minimal issues.”

Several tenants who boast carpentry skills have donated their time and Rodriguez has taught some English to neighbors who speak only Spanish. The building “feels like a family” now, she said.

Meanwhile,
HPD has completed $80,714 in emergency repairs, and helped with boiler oil.

The building
–controlled by
Lehman-affiliated mortgage holder 745 Special Assets LLC
, and Aurora Bank
— could head to foreclosure auction soon.

But the tenants and UHAB are negotiating to acquire the slum before that occurs, White said.

Buying the building and founding a co-op will be difficult, but longtime tenant Juana Almanzar is up for the challenge, she said.

“I like it better with us in charge,” said Almanzar, 52. “I want to own my home.”

Read more: http://www.nydailynews.com/new-york/bronx/determined-west-farms-tenants-band-fix-neglected-bronx-slum-building-work-form-co-op-article-1.1051118#ixzz1qKaU7vM7

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