2014 Alternative Enforcement Program List Released

It is a strange suspense that tenant organizers feel once a year, as they scroll down the new list of buildings being added to HPD’s Alternative Enforcement Program (AEP). Inevitably, our eyes scan the list for buildings we work in. And when we do see addresses we recognize, we are torn between disappointment that the buildings are in such bad shape, and hope that this might give us some leverage to improve conditions.

The Bloomberg administration created the Alternative Enforcement Program as a way for the department of Housing Preservation and Development (HPD) to identify the most distressed buildings in the city and enforce the necessary corrections. As well as the total number of violations, HPD looks at the severity of the problems, which are categorized as A (non-hazardous) B (hazardous) C (immediately hazardous) and I (court ordered to correct, or order to vacate). Once a building enters the program, it is inspected for violations and the owner has four months to do sufficient repairs. If they do not satisfy the requirements by then, they are subject to fees and liens against the building. In some cases, HPD will do the repairs themselves and send the bill to the owner.

We found two buildings whose tenant associations we work with on the 2014 AEP list: 1253 Franklin Avenue in the West Bronx, and 1159 President Street in Crown Heights. We also work with tenants (alongside PACC) in 1059 Union Street, also in Crown Heights. 1059 Union Street and 1159 President Street are both owned by BCB Properties: a landlord the newly formed Crown Heights Assembly Tenant Union has opted to target.

Brooklyn took the lead with 103 new buildings added to the program, 27 of which are in Crown Heights. The list continues with 55 buildings in the Bronx, 19 in Manhattan, 10 in Queens, and none in Staten Island. Only 187 buildings fit the requirements to enter the program this year instead of the usual 200, but according to The Observer, HPD cautions against reading too much into this.

The Observer article begins with a contrast between these distressed buildings and the luxury NYC housing that seems to exist, unscathed, in a separate realm – recalling Mayor De Blasio’s “tale of two cities” theme. As we wait to hear the mayor’s  appointments for several HPD positions, we hope this will be a new chapter in the enforcement of building maintenance and repairs, which is a crucial part of preserving affordable housing stock. We will be fighting on President Street and on Franklin Avenue for the owners to take responsibility for their buildings and provide decent, safe homes for tenants.

If you live in an AEP building or just want to learn more, check out these resources:

AEP Frequently Asked Questions

AEP office:  (212) 863-8262


Tenants Fight Back in Seryl LLC Foreclosure

Over the past couple of months, UHAB organizers have been working with tenants in 10 Westminster Road, a building near Prospect Park South whose mortgage is owned by Seryl LLC, the same private equity company that owns the mortgages on 545, 553, and 557 46th Street. With an HPD violation count of 205 for only 21 units, 10 Westminster is in the Alternative Enforcement Program. The building is in foreclosure and under the control of a receiver named Harry Horowitz who, according to tenants, is doing nothing to improve conditions. On the contrary, there is evidence that he may be trying to illegally raise rents.

Living here has been a long, rough journey for many tenants. Orazio Petito, the building’s landlord landed the building on Bill de Blasio’s Worst Landlord Watch List. One tenant had a ceiling fall in on her, sending her to the hospital and making her unable to work. Some of the apartments once went without running water for five days straight, others have gone without power for hours at a time, and when trying to contact management about such problems, tenants are treated disrespectfully.

The good news is, the people of 10 Westminster have not given up hope. With the help of South Brooklyn Legal Services, several of them are now in the process of entering the foreclosure case so their voices can be heard in court. We support the families in this building as they fight to make their home liveable, and to have some control over their surroundings. Seryl cannot get away with its irresponsible action! Stay tuned as this campaign moves forward!

Three Ways to Improve the AEP Program

The Alternative Enforcement Program (AEP) is an extensive NYC project established to improve landlord compliance with the housing maintenance code. Each year, 200 buildings are enter into the program, which increases oversight from HPD and levies costly fines against landlords who allow their buildings to fall into disrepair. While the program has been effective in forcing repairs, we have also identified several ways in which it can be improved to greater serve New York City tenants.

  1. DHCR should approve an automatic rent reduction for tenants whose homes enter the alternative enforcement program.
    DHCR, the NYS Department of Housing and Community Renewal, administers rent regulations and has the power to provide tenants with legal rent reductions when negligent landlords refuse to make necessary repairs in their homes. If a building enters the Alternative Enforcement Program, it is clearly one of the most physically distressed buildings in New York City, and tenants have likely been paying rent without receiving anything in return for a very long time. In order to decrease the burden of bad housing on working families as well as increase the pressure on property owners to make repairs, DHCR should grant automatic rent reductions to any tenant who lives in a building that enters the Alternative Enforcement Program.
  2. Remove AEP buildings from the lien sale list.
    Each year, the NYC Department of Finance sells off uncollected tax, water, and emergency repair liens to raise money. This process gives a third party (usually a bank or a trust) the right to foreclose on these debts. Buildings in AEP are often included in the lien sale list: it stands to reason that landlords who are negligent about repairs may also be negligent about paying their bills, and these buildings are often candidates for emergency repairs done and billed by the city.When a building is in severe physical distress, it does not make sense to bring in a speculative actor whose only interest is in sucking more money out of the property. It does make sense, however, for the city to hang onto these liens: they are secured debt, and can be used by the tenants and the city as leverage to fight for a deal that preserves the building’s affordability. AEP buildings should be automatically removed from the city’s lien sale list in order save the city’s most vulnerable housing stock.
  3. Hold the bank accountable when a building is in foreclosure.
    As we’ve discussed on this blog before, the Alternative Enforcement Program is not nearly as effective as it could be when a building is in foreclosure. The heart of the program is that it puts financial pressure on building owners to make necessary repairs. But what if the owner is legally forbidden from intervening in building management, as is the case in most multifamily foreclosures? The AEP program has no way to hold receivers responsible for making repairs. Moreover, the fines levied while the building is in the program (unpaid during foreclosure) are not enough to deter a predatory buyer, but they are enough to throw off a non-profit landlord or a tenant group who is looking to reclaim the building in a cost effective manner.

    As foreclosure proves to be a persistent problem in New York City, we need a program that ensures tenants living in multifamily buildings receive decent housing. A foreclosure can last for up to five years, and that is FAR TOO LONG for tenants to live in AEP conditions. In the landmark Milbank case, courts have ruled that when buildings are in foreclosure, banks have a responsibility to maintain the asset: i.e., pay for repairs. In foreclosure cases, the AEP program must demand accountability from lenders as well.

Tenants at 553 E. 169th St. Continue to Organize as Building Goes to Auction

apt 3D- bedroom

Bathroom Mold, March 2012

Last night, tenants at 553 E. 169th St. had an important meeting to talk about the fact that their building will be going to auction on April 15th.  Auctions are breeding grounds for speculation – the whole style of an auction is designed to drive up price – and they are pretty much worst thing for distressed affordable housing.  Rather than take time to look at a building, calculate its repair needs and meet with tenants, auction-goers are usually looking to buy up housing and make a quick buck.

The tenants at 553 E. 169th St. have been organizing for almost two years to improve conditions in their apartments and find a preservation outcome for their building.  They met with their receiver, Miriam Breier, to address immediate health concerns, including heat and hot water.  They tirelessly called 3-11.  They opened their doors to good developers, none of whom were able to meet Valley National Bank’s inflated asking price. (The bank refused to lower it.) They met with Councilwoman Helen Foster’s office, and they attended tenant meeting after tenant meeting.

This year, the building was entered into HPD’s Alternative Enforcement Program, and the city so has more power to control the repairs in the property. While the management company has made many repairs, the building continues to have over 150 violations in 18 units.

A key component of the Alternative Enforcement Program is the costly liens that are assigned to the property by HPD. These liens will not go away when the building is sold, and any purchaser must incorporate the cost of correcting violations and removing the building from the AEP program into the cost of acquisition. We suspect that most auction-goers on April 15th will not be prepared to do this for 553 E. 169th Street, of if they are even aware of the program at all.

Tenants will be at the auction on April 15th to show speculators that they are organized, that they know their rights, and that they won’t back down!

HPD Releases FY 2013 AEP List

Each year, HPD releases a list of the 200 most physically distressed buildings in the city. These are the 200 new buildings that will enter the Alternative Enforcement Program. Because buildings are not discharged from AEP until conditions have been rectified, about 500 buildings remain in the program from previous years. You can read more about AEP in the City’s report on the first 5 years of the program, released in July 2012.

Last week, HPD released the list of AEP buildings for FY 2013. Check it out. The buildings are overwhelmingly located in low income areas of Brooklyn, Upper Manhattan and the Bronx. There are only a few properties located in Queens and Staten Island. Many of them have active Lis Pendens – the first step in a foreclosure case – indicating that distressed buildings are experiencing financial troubles.

There are some familiar addresses on the list. In 1054 Southern Boulevard, tenant leaders, are asking HPD to replace their negligent landlord with a city-approved manager (the 7A program.)  The Tenant’s Association of 3 buildings in Sunset Park are on rent strike with the assistance of UHAB and South Brooklyn Legal Services.

The Alternative Enforcement Program is an excellent example of the ways that HPD has been effective in intervening in dangerous housing situations in New York City. That’s why we were excited last month when the program was expanded to take into account underlying conditions and to enable the City to work with more buildings.

Hazardous living conditions, like the kinds identified for targeted enforcement through AEP, put already-vulnerable families at an even higher risk. It is a public health concern, a housing concern, and a human rights concern. We hope that these identified buildings will improve over the next year as HPD oversees extensive repairs.

Townhouse Management on Buying Spree of Flushing Bank Mortgages

About two years ago, we began organizing an eight building portfolio connected to the notorious wrong-doer Frank Palazzolo. At the time, these buildings, including 1221 & 1225 Sheridan, 735 Bryant and 3212 Cruger, were in foreclosure and suffering from severe neglect. Tenants were living alongside rats, roaches, mold, lead paint, crumbling ceilings and leaky faucets without heat or hot water.

After fighting for a preservation deal for nearly a year, these buildings were sold against tenants’ wishes to a group called Townhouse Management. This happened in early Spring 2011, though it took the group until August 2012 to secure the deeds to the properties. Tenants were cautiously optimistic about a Townhouse landlord, and initially the building saw a rapid decline in dangerous code violations. But, as we’ve been saying for quite some time, code violations do not tell the whole story.

Last week, we went out to these buildings to check in on repairs. These are some of the things we saw:

735 Bryant
735 Bryant
1221-1225 Sheridan Ave
1221-1225 Sheridan Avenue

1221 & 1225 Sheridan Avenue had experienced a fire in the boiler room the very morning we arrived.  When the fire erupted, the fire alarm did not go off, and tenants were understandably scared and frustrated. Other tenant responses about Townhouse Management was also not stellar. Many people feel neglected and abused. Tenants also feel that conditions have not improved, and management quality has not changed.

Meanwhile, Townhouse Management is on a buying spree. They are purchasing mortgages on buildings in foreclosure all over the Bronx and Brooklyn. Notably, they are buying a significant portion of Flushing Savings Bank’s distressed portfolio. Various LLCs associated with Townhouse Management have bought the mortgages on at least 15 properties in foreclosure from Flushing Savings Bank over the past year.

Nearly half of Flushing Bank’s foreclosure portfolio is in the Alternative Enforcement Program. On these highly distressed buildings, it is essential that the bank not do business with groups like Townhouse Management. Townhouse Management has proven themselves incapable of providing the rehabilitation that these properties need. This kind of cooperation between a lender and a negligent, predatory landlord is exactly the kind of behavior that led us to a foreclosure crisis in 2008, and it cannot be allowed to continue here.

We are working with tenants in many of the buildings that are in foreclosure with Flushing Savings Bank, and fighting alongside them for a safer, more affordable, more habitable future. We will fight to prevent the sale of future mortgages to Townhouse Management, or any buyer not on HPD’s approved developer list.  Stay tuned.

New Foreclosure Legislation Would Require Banks to be More Transparent

Yesterday, New York 1 reported on legislation proposed by Christine Quinn that would require banks to notify the city when they’re going to put a building in foreclosure. This legislation will help tenants who live in foreclosed buildings continue to get the services they need, which is very important, considering foreclosure often means divestment and deterioration for the buildings.

The tenants who live in 164 Dikeman, the building featured in the NY1 video, are a great example of why this type of legislation is needed. For this building, the foreclosure process consisted of an absentee landlord and deteriorating conditions.  The residents discovered that the foreclosure was only the tip of the iceberg of the buildings problems. Due to the poor conditions the building fell into the Department of Housing Preservation and Development’s (HPD) Alternative Enforcement Program (AEP), meaning it was one of the 200 worst buildings in the city. On top of this, the residents realized all the tenants were being illegally overcharged for rent, while receiving no services. The tenants were able to file for rent reductions to have the legal rents restored, but while this was going on the bank sold the notes to a building to a Eman Realty who has now become the owner.

Unfortunately, the new owner has not proved to be more responsive than the last.  Eman Realty’s principal, Alexander Varveris, has a history of being a neglectful landlord.  Eman took over in September, yet tenants have seen very little change in the building.

Besides tipping the city to be on the lookout for declining physical conditions, another reason this legislation could be helpful is it could provide more time for the tenants to have a voice in what happens to their homes after the foreclosure ends. The tenants at Dikeman were not able to intervene in the sale of the note because they were not aware that was a possibility and that a new landlord was going to take over through a note sale. The residents are fed up with the neglect and would like the building to become Co-op. The tenants and UHAB are currently organizing and working towards this goal, but this outcome might have come sooner and possibly easier for the tenants if the foreclosure proceedings were more transparent to the city and to residents of the buildings.