The Wall Street Journal published an article on Sunday highlighting a new relationship between New York Community Bank and housing advocates (including us, the Urban Homesteading Assistance Board.) To long-time readers of our blog, this is old news. In the years leading up to 2008, NYCB was the largest lender on rent regulated multi-family buildings in New York City and were known for lending to high-profile predatory equity players, like Pinnacle Group, and well-known slumlords, like Frank Palazzolo. After years of organizing on our part along with along with a coalition of housing advocates, New York Community Bank came to the negotiation table in December. In March, the Mutual Housing Association of New York purchased four distressed notes in Brooklyn.
What’s changed? While the bank has long denied wrongdoing, it was displeased with the attacks and agreed to a pact under which it plans to give landlords and nonprofits a first shot at every distressed mortgage it sells in New York City.
Under the voluntary agreement reached earlier this year with two leading housing advocacy groups, New York Community Bank intends to offer to sell assets first to nonprofit developers and landlords approved by the city’s Department of Housing Preservation and Development as having good track records.
Under the “First Look” program, approved developers will get get an exclusivity period of 2 weeks in which to make an offer on distressed NYCB assets before the bank begins to actively market them. We are hopeful that this agreement willprove useful in recapturing large scale amounts of NYC affordable housing stock — perhaps through an Interim Facility. As we move forward, to different campaigns with different banks, we hope to reproduce this model and create healthier relationships between the non-profit and NYC banking communities to benefit rent regulated tenants.