The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

Tag Archives: Tenant’s Rights

Three Borough Pool Press Conference

A few weeks ago, tenants from all across New York City came together in front of City Hall to demand that the Three Borough Pool, a group of 44 buildings in the Bronx, Brooklyn, and Manhattan, be taken over by a new, responsible owner.

The current owners (David Kramer, Normandy Real Estate, Vantage Properties, and Westbrook Partners) failed at paying their mortgage, landing all of the buildings in foreclosure. They’ve also failed at maintaining the buildings, resulting in horrific living conditions in apartments. If the lender, LNR, sells the buildings to a responsible developer who commits to rehabilitating the buildings and including tenants in decisions about their homes, this foreclosure can be an opportunity to preserve the nearly 1,600 units of rent regulated housing that are at stake.

UHAB created this video from our footage of the press conference. Follow the link at the end of the video to watch the tenants’ full speeches!

Friday News Round Up!

Made it through another week. Here’s some things that happened in New York while nothing good happened in Washington. 

  1. Big developers and the Department of City Planning are rushing to finish up their final projects before Bloomberg leaves office. Its looking very likely that the next mayor will be a little bit less friendly to big ticket development (and ideally in favor of more affordable housing.) 
  2. Speaking of development: Greenpoint is currently facing a debate that underscores all debates around affordable housing in New York. What does affordable mean? Affordable to who? How much “affordable” should developers provide? Is the AMI even a useful measure of income? 
  3. What does Tish James as Public Advocate mean for the race to be the next City Council speaker? 
  4. Glenn Beck claims that the media focus on Anthony Weiner was simply a distraction, a communist plot to take over the government. It’s funny. 
  5. A coalition of tenants have been fighting against their notorious Predatory Equity landlord, Pinnacle, for years. They charge their landlord used widespread practices to illegally raise rents and push out low income tenants. Though tenants will now be able to seek compensation from their landlord for this malfeasance, tenants are disappointed. This week, a federal judge turned down tenants attempts to appeal an earlier settlement which excluded certain types of claims that Pinnacle could be liable for. We know they’ll keep fighting. 

Predatory Equity in 2013: New Organizing Tools

Since 2008, UHAB and our allies have learned a lot about how financial malfeasance in the rent regulated housing market puts low income tenants at risk. As Wall Street rejoices over the “rebound” in housing prices, we know the truth: the rebound goes hand in hand with a rebound in speculation and overleveraging. Last year, we created the Life Cycle of Predatory Equity that reveals that Predatory Equity to be a cyclical process: an overleveraged mortgage, harassment, neglect, foreclosure, and overleveraging again. Unfortunately, since 2008, we’ve seen many buildings enter their second cycle.

Buildings entering the second round of Predatory Equity often are faced with a new speculative landlord who will use familiar tactics to try and “improve the underperforming asset.” (i.e., Landlord speak for “increase rents by pushing regulated tenants out.”) One common tactic that’s  particularly popular in gentrifying neighborhoods is a “buy-out,” where landlords offer tenants seemingly large sums of money to vacate their units. The money is never very much – hardly even enough to move. (One tenant we work with was offered $6,000 and a bus ticket to Philadelphia where, her landlord said, “housing is more affordable.”)

Fighting these buy-outs is important: when tenants opt to leave, landlords are automatically able to raise rent by 20%, contributing to the erosion of affordable housing stock in New York, and potentially even bringing the unit out of rent regulation.  If a tenant decides to stay, landlords can only raise rent by 4% to 7.75% depending on length of lease.

We developed a fact sheet on these kinds of buy outs while working with tenant groups at 1153 and 1159 President Street in the rapidly-gentrifying neighborhood of Crown Heights. Check it out here.

News isn’t all bad: in the past few years, we’ve seen some buildings get preserved for long term, quality affordable housing. We’ve seen tenants successfully organize to reclaim their buildings from predatory banks, and are currently in the preservation pipeline

Finally, with the help of graphic designer/artist Donna Choi, we developed an organizing tool that we’re using to engage tenants fighting to break the cycle of Predatory Equity. The infographic, available in English and Spanish, explains how developers buy buildings that are in foreclosure and illustrates how tenants can organize and to demand that the building is sold to a developer of their choosing.

We encourage you to these resources and use them!

Tenants from Distressed Bronx & Queens Buildings Descend on Bankruptcy Court to Demand Private Equity Company Preserve Their Homes

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Manhattan, NY: Tenants from six dilapidated buildings in the Bronx and Queens travelled to Bankruptcy Court today to confront Stabilis Capital Management, the mortgage holder on their homes. The buildings are currently in foreclosure and are being managed by an agent who works for Stabilis. Tenants are suffering from leaks, mold, rodent infestations, falling ceilings, and in some cases, a lack of basic plumbing.  Stabilis is scheduled to appear in court today to seek control of the deeds on the properties, which are located in Ridgewood, Queens. Tenants fear that if they are successful in securing the deeds, Stabilis will sell the buildings to the highest bidder, putting residents at risk of continued unlivable conditions, and displacement.

Tenants, advocates, and elected officials are demanding that Stabilis meet with them to present their plan for preserving the properties, which are rent regulated and home to 36 low-to-moderate income families. Tenants are calling on Stabilis to sell the buildings to affordable housing developers who are willing and capable of fully rehabilitating the properties, keep them affordable in perpetuity, and allow tenants significant control in the management of their homes.

Stabilis is one of several companies that has been buying up debt on severely distressed rental properties in New York City’s gentrifying neighborhoods. The acquisitions resemble activity of 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. Today at Bankruptcy Court, the Queens tenants are joined by tenants from 836 Faile Street in the Bronx, where families are facing a similar situation with Stabilis Capital Management.

“As a resident of 1821 Cornelia St., I am concerned about the safety of the adults and children living in these six buildings,” said Tenant Leader Denise Serrano. “We pay our rent, so Stabilis should pay their bills and prevent the electricity and hot water from being shut off. They need to fix things like the locks on the front doors. We want to meet them to discuss who the next owner will be.”

There are currently 549 violations on 36 units at 1821 & 1894 Cornelia, 1673, 1675 & 1726 Woodbine, and 18-14 Woodbine. Tenants have been working alongside their elected officials and the Urban Homesteading Assistance Board to encourage the equity company to meet with them and allow them a voice in the future of their homes.

“Tenants should not suffer because of bad bets made by private equity investors seeking to gamble on New York’s housing market,” said Congresswoman Nydia Velazquez. “Stabilis Corporation must comply with local, state, and federal Fair Housing laws and should move swiftly to make badly needed repairs in all of its properties, including those in Ridgewood.”

“Too often, tenants are the ones who pay the price for bad lending decisions,” said City Council Speaker Christine C. Quinn. “If Stabilis Capital Management refuses to meet with tenants to develop a plan to protect the future of their homes, then they must sell these buildings to someone who will. I thank the tenants, UHAB, Congresswoman Velázquez and Council Member Reyna for their efforts to protect these homes and call on Stabilis to immediately begin repairs on these neglected buildings.”

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

“It is not acceptable to put families at risk and force them to live through undignified conditions because of the irresponsibility of a landlord. Stabilis has acquired more than just foreclosed buildings, they have acquired people’s homes,” said Council Member Diana Reyna. “These tenants have a right to clean and safe housing and it is incumbent upon Stabilis to appropriately renovate any buildings in their portfolio.  If they are incapable or unwilling to do this renovation, they need to transfer control of the building to someone who can.”

“I am here today to support my constituents and neighbors who are suffering with the horrific and unimaginable living conditions for over 5 years,” said Assemblyman Mike Miller.  “Clearly, the present owner and the management corporation have been absentee allowing their tenants to live in unsuitable conditions for years.  I stand with my neighbors together to demand that our Judicial System, in particular our Bankruptcy Court, force the equity company to rehabilitate the properties immediately or to step aside and allow the buildings to be sold to HPD-approved developers who have the skills to stabilize these properties and provide safe living conditions for our community.”

“Stabilis Capital Management financial transactions seem to be disastrous for the tenants who occupy these buildings,” said Kerri White, Director of Organizing and Policy at the Urban Homesteading Assistance Board. “If Stabilis has no plan on how they will rehabilitate these properties to make them safe and decent for the families who live there and compliant with the laws of the City they should exit this deal now.”

Fighting for Preservation in Ridgewood, Queens

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Tenants living in 6 buildings in Ridgewood, Queens are caught in the middle of a complicated foreclosure and bankruptcy case which will determine the future of their homes. While the courts continue to drag out the 5-year-and-counting foreclosure, tenants suffer from horrible living conditions with no one to turn to.  Check out Friday’s video from Channel 11 News demonstrating the unsafe living conditions tenants face on a daily basis. 

Here are tenants allies and adversaries in the fight for affordable housing preservation:

Steven Kates, Landlord: Mr. Kates is fighting the foreclosure in bankruptcy court. However, he never could be trusted: he lied about the number of units in the 6 buildings to take out an unreasonably large mortgage! Tenants are fighting to make sure that he does not get to keep these buildings. 

Stabilis Capital: The original lender, Washington Mutual, collapsed in the 2008 financial crisis.  Chase, who took over the failed bank, sold the debt to Stabilis — a private equity company we’ve seen lend on other severely distressed properties. We hope that Stabilis will come to the table to meet with residents and advocates to work out a deal that will benefit tenants and NYC’s affordable housing stock.

CATCH: Tenants have asked CATCH, a nonprofit preservation developer to purchase their buildings, rehab them, and rent them at affordable levels. Tenants want to have a voice in the way their buildings are managed, and CATCH runs buildings they own through “mutual housing,” which ensures resident-input. However, in order for CATCH to buy the buildings, they will have to purchase the note at a discount and wind their way through bankruptcy court.

Elected Officials: Tenants have found a great deal of support from their elected officials, including Congresswoman Nydia Velazquez and City Councilwoman Diana Reyna. They hope that through political pressure, Stabilis will discount the mortgage on these six properties (which they likely bought for a discount from Chase) and sell them to CATCH. With the help of Councilwoman Diana Reyna, tenants are asking HPD to remove these buildings from the lien sale list. The liens are a crucial tool that will give the tenants some serious leverage in the bankruptcy case.

Queens Legal Services: Tenants are represented by Queens Legal Services to help make sure that immediate repair needs are met. While the bankruptcy case has made legal matters a little confusing, attorneys are strategizing to get repairs done as soon as possible.

Stay tuned on this exciting fight to preserve affordable housing in Ridegwood, Queens!

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