Last year, a coalition of organizations including UHAB negotiated with three banks (New York Community Bank, Valley National Bank, and Chase) to establish the “First Look” Program. As we mentioned in previous posts, this program allows community development organizations a two week grace period to make an offer on distressed housing. This two week period minimizes competition, and ideally gives nonprofits an advantage over other developers to purchase and preserve affordable housing.
An exciting deal has been reached this week between Banana Kelly and New York Community Bank! (For the record NYCB has been the only bank which has successfully sold distressed buildings to nonprofits through “First Look.”) The New York Times published an article yesterday about 63 distressed units on College Ave in the Bronx which were previously owned by notorious landlord Eli Abbott. We are thrilled that these buildings will be preserved as long-term affordable housing, and that tenants will get the repairs that they deserve!
While the “First Look” program has been successful a handful of times, the way the market has been recently, banks are selling debt, rather than selling deeds. This means that in order to purchase a building, a developer must buy the debt from the bank, finish the foreclosure, go to auction, and then take over as owner of a property. It is unusual for nonprofits to have the capacity to negotiate with banks and go through this lengthy process.
This challenge for nonprofits to purchase buildings (especially smaller buildings in foreclosure) is why we at UHAB continue to advocate for the creation of an Interim Facility. The way we see it, an Interim Facility would take a great deal of pressure off the nonprofits, and allow for more deals like this one deal to take place.
To read the NYTimes article on the College Ave buildings, click here.