Crain’s New York Business: “Housing bust; busted housing”

People usually go to their neighbors for a cup of sugar or a stick of butter. Idalina Padilla, 87, makes a more personal request of fellow tenants in her Bronx building: She asks to use their toilets.

“I’m afraid to use my bathroom,” she said, “because the ceiling might fall and hurt me.”

Her sagging, dripping ceiling is one of many problems faced by residents of her building, a mile north of Yankee Stadium. In July 2010, Manhattan-based investment firm The Bluestone Group purchased the mortgages on the foreclosed property and five others in the Bronx from Dime Savings Bank for $10 million, promising to end a cycle of neglect wrought by two previous landlords. Tenants feared that Bluestone, which had little experience in fixing dilapidated housing, had overpaid and would be forced to skimp on repairs.

Bluestone principals promised to spend $5,000 to $7,000 per unit and prove the skeptics wrong. (Twenty times more is being spent to rehabilitate similarly run-down buildings in the Bronx.) They had some initial work done—painting walls, laying vinyl tile and rewiring, reducing the number of violations on the portfolio to 225 from almost 3,000.

But tenants are still suffering—many of the violations were fixed with patchwork repairs, leaving underlying problems—and the city Department of Housing Preservation and Development reports “little progress” at the properties.

Read more at Crain’s New York.

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