It’s Crunch Time: We Need a #RentFreeze!

There are certain moments when you simply have to ask yourself, “Wow. Is this really happening?”

When the NY Daily News reported that the Rent Stabilization Association was putting out advertisements advocating that New Yorkers support a rent increase, I experienced one of those moments as I tried to get my jaw off the floor.

This is no small time advertising push. This is a six-figure ad buy that will cover the costs of over 700 TV and Radio ads ahead of the June 23rd final Rent Guidelines Board vote. The Rent Stabilization Association, which claims to represent the 25,000 landlords of rent-stabilized buildings in the city, is as the Daily News put it so eloquently: “trying to do the impossible — convince New Yorkers that the rent is too damn low.”

via NYDaily News
via NYDaily News

These same landlords who refused to make repairs or keep the heat on in hundreds of thousands of rent stabilized units across the city are now spending hundreds of thousands of dollars trying to persuade their tenants that they deserve a pay raise.

These same landlords that over-leveraged countless buildings and took sledgehammers to apartments when doing “repairs” in order to harass tenants out of their homes are telling us to pay up!

As we tell every tenant association that we work with, power comes in two forms: Organized money and organized people. Clearly the Rent Stabilization Association has organized money — since they don’t use it on repairs and services for their tenants, they have to use it somehow, right?

But we have organized people.  For the first time in recent memory, the RGB — the Mayoral appointed board that votes on how much the rent should change from year to year in rent stabilized units — is having hearings in the outer boroughs and in the evening so that working people can have their voice be heard.

This past weekend, nearly over 300 tenants in the Bronx and Brooklyn marched for a Rent Freeze, gearing up for the upcoming few weeks of hearings. Tonight is the first one, in the Bronx at Hostos Community College! (A full schedule is below.)

Never in RGB’s history has it voted for a Rent Freeze. And with the May 5th preliminary vote of a 0-3% increase, for the first time in history, a Rent Freeze is within reach! Its up to us to grab it.

The landlords are scared. Over time they’ve grown used to the rents going up every year — now that this is under threat, they are coming out swinging, doing everything they can to stop this movement. They’ve had their allies at REBNY pressure Mayor de Blasio to walk back on his campaign promise to support a Rent Freeze. They’re now putting hundreds of dollars into a campaign to convince tenants that they don’t pay enough in rent. You better believe they will be at these hearings, claiming that they’re barely getting by with the rents being what they are now.

We’ve got to fight back.

The questions is: Will you be there to show the RGB otherwise? Will you share your story about what a Rent Freeze would mean for you and your family? If you don’t want to testify, will you be there to support your fellow tenants as they give their testimonies?

We need each and every single person to show up and show the RGB that we need a Rent Freeze!

Below is a list of the coming hearings the RGB is hosting. We’ll be at them all. Will you join us?

If you can’t make it in person, you can still be involved by calling the Mayor (212-788-3000) and Deputy Mayor (212-788-8510). You can also participate on twitter, by tweeting at them using the #RentFreeze (@BilldeBlasio, @DMAliciaGlen, @MMViverito)! 

Thursday,
June 12, 2014
Public Hearing
(Public
Testimony)
Repertory Theatre of
Hostos Community College/CUNY
450 Grand Concourse
Bronx, NY 10451
Map & Directions
Campus Map (Repertory Theatre is located in Building C – East Academic Complex)
Agenda
5:00 – 8:00 P.M.
Monday,
June 16, 2014
Public Hearing
(Public
Testimony)
Emigrant Savings Bank Building
49-51 Chambers Street
(between Broadway and Centre Street)
New York, NY 10007
Map & Directions
2:00 – 6:00 P.M.
Wednesday,
June 18, 2014
Public Hearing
(Public
Testimony)
Brooklyn Borough Hall
209 Joralemon Street
Brooklyn, NY 11201
Map & Directions
5:00 – 8:00 P.M.
Thursday,
June 19, 2014
Public Hearing
(Public
Testimony)
Queens Borough Hall
120-55 Queens Boulevard
Kew Gardens, NY 11424
Map & Directions
5:00 – 8:00 P.M.
Monday,
June 23, 2014
Public Meeting
(Final Vote)
The Great Hall
at Cooper Union
7 East 7th Street
at corner of 3rd Ave. (Basement)
New York, NY 10003
Map & Directions
6:00 P.M.

 

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Putnam Portfolio and Stuy Town: Preservation Opportunities for Affordable Housing Once Lost to Speculation

Metro North Residents at Putnam Rally, photo courtesy of Tenants & Neighbors

In recent years, speculation in the affordable housing market is an accepted fact. Real estate investment targets the homes of low income families with the express intent to make financial profit from exploiting the residents who live in these buildings. This practice has failed. Over and over again. However, this hasn’t stopped the perception that massive profits can be gained by gambling on NYC’s affordable housing stock. The question in front of our policy makers now is how will we respond to this continuing and destabilizing crisis?

Stuyvesant Town is likely the most famous affordable housing complex that was victim to the overleveraging crisis of the early to mid-2000s. This is because both it is the largest housing complex with over 11,000 apartments and the fact that in 2006 it was purchased for an astronomical price of over $6 billion. This deal was in default within 3 years. Due to the complex nature of the financing, the buildings have been in limbo since 2009, but as was reported by the New York Times, the properties are back on their way to auction, and unfortunately, there are already willing bidders preparing to speculate on the buildings again.

Although, Stuy Town is the largest and most recognizable portfolio, it is hardly the only large complex on the edge of another critical moment. The Urban American Putnam Portfolio is a group of five former Mitchell Lama projects in upper Manhattan and Roosevelt Island that comprises nearly 4,000 units of what used to be protected, affordable housing. This portfolio is, similar to Stuy Town, at risk of being flipped again. Last week, Bloomberg News rendered an accurate and clear explanation of the history of the properties and the risk the portfolio is currently facing.

To give a brief history, in the height of the housing boom the portfolio was flipped twice under business plans to remove the affordability from the project, push out lower income residents and raise rents as high as possible. Urban American purchased the buildings for $918 million, taking out an $800 million mortgage financed by Fannie Mae. Fannie Mae also took the opportunity to invest at least $60 million in equity in the portfolio (although they won’t admit it) something which seems to be in direct conflict with their mission to protect affordable housing. It should come as no surprise that this isn’t the only time they’ve invested in these types of deals. To complicate matters further, it was discovered that the City Investment Fund partnered with Urban American in this predatory deal. The City Investment Fund includes money from the New York City and New York State retirement systems; a bitter irony considering many of the residents in these Mitchell Lama projects were public workers.

This $800 million mortgage is now due, which has inspired a flurry of activity around the portfolio. Urban American is looking for a new investment partner that would help them refinance. Brookfield Properties has expressed interest in buying a stake in a $1.1 billion refinancing. This is a $182 million increase over the last purchase price, which has stretched the rents to the highest level and allowed the conditions of the properties to decline. In the event of this refinancing both the City Investment Fund and Fannie Mae would be paid off, fulfilling their fiduciary responsibility at the expense of thousands of New Yorkers’ having an affordable place to live.

It DOESN’T have to be this way. We as a City can decide that we are going to fight to preserve these homes, as well as other buildings that are victims of this crisis. We can do this without creating diminution in value to the bondholders. Here’s what we need to do:

Fannie Mae: The mortgage was due in early May. As a deal has still not been completed, Fannie Mae is in a position as holder of the defaulted debt to push for a quicker preservation deal. Fannie Mae could also commit to finance a preservation deal that would protect the affordability and commit to improving the conditions. Additionally, Fannie Mae should take responsibility for the fact it invested in this portfolio and use its equity stake as additional leverage to push for a better outcome.

City Investment Fund/Comptroller Scott Stringer: The Comptroller should support the tenants and the preservation of affordable housing by taking a stance that doesn’t ignore the impact of his predecessor’s actions. Pension funds should never have been used in a deal that puts low and moderate income tenants at risk of losing their homes. However, there is no reason why the City Investment Fund couldn’t explore the opportunity to remain invested in these properties as long as an owner steps in who commits to affordability and decent housing.

HPD and other City Agencies: This portfolio represents a substantial amount of affordable housing in Upper Manhattan and Roosevelt island, and it should have never been allowed to lose its affordability protections. HPD and the other City Agencies should explore ways to once again tie rent restrictions to these buildings through the use of tax abatements or subsidy that would (a) provide much needed capital towards repairs and (b) add regulatory agreements that would keep the buildings affordable for the residents who call them home.

Mayor de Blasio and other Elected Officials: Mayor de Blasio, Speaker Melissa Mark-Viverito and the other Elected Officials should support the residents of these properties and the need to protect these units of affordable housing, a much needed resource of affordable housing in upper Manhattan and Roosevelt Island. They also could call all the above mentioned parties to the table with the tenants to negotiate how to preserve these properties.
This is not an easy task, in fact it will be difficult and tedious and with no assurances that we can win. However, the tenants are ready to stand up and take on this fight, the only question is who will stand with them?

This is not an easy task, in fact it will be difficult and tedious and with no assurances that we can win. However, the tenants are ready to stand up and take on this fight, the only question is who will stand beside them?

We Demand a RENT FREEZE!

There is a routine that is all-too familiar to New Yorkers living in rent stabilized apartments. Every year or two,  depending on your lease, rent goes up. Every year, the Rent Guidelines Board (RGB) sets a percentage that the landlord can raise rents by. (This year it’s 4% for a one year lease and 7.5% for a two year lease.) No one asks tenants if they got a raise that year, or if their grocery bill has mysteriously gotten lower. Crucially, no one asks what services are like in the apartment buildings. Rents can go up and up and up, based on a city wide price index, while building services go down.

This year, tenants are demanding an even more radical change — at a rally on Thursday, we are calling for a RENT FREEZE.

Over the past few years, rent has gone up way faster than income in New York City. Landlords are spending less and less on building maintenance, something that shows in building conditions. Tenants are not getting the services to justify the rental increases they are facing, and they don’t have the income to support it either. At a time of apocalyptic homelessness in New York City, we need to keep more people in their homes — we don’t need to make homes more expensive than they already are!

Tenants have historically demanded more input in the rent setting process: something that UHAB believes would lead to truer and deeper affordability. Last year, the RGB didn’t even hold public hearings in the outer boroughs, prompting tenant advocates to hold an alternative “People’s RGB,” demanding more tenant input in the rent-setting process.  Candidate Bill de Blasio met with the People’s RGB, and joined tenants in their call for a more fair process, and even said he would support a rent freeze. Now the candidate is mayor — a mayor whose administration understands that so so many rent stabilized tenants can barely afford rent as it is. The decision the rent guidelines board makes this year will either push low and moderate income tenants towards evictions, or help them stay in their homes. Join us in calling on the administration and its appointees to stand with tenants!

Thursday, at 9AM at 1 Centre Street — near City Hall — to rally outside the first RGB meeting of the new administration to demand a rent freeze! 

Victories on Minimum Wage and Paid Sick Leave!

The fight for housing justice is not in a vacuum: There are many economic, social, and political forces at play when thinking about how to preserve our city’s affordable housing.  When a tenant is working a minimum wage job without sufficient benefits, how can that person sustain their family while paying over half their income towards rent?  In NYC, this is all exacerbated.  We live in an expensive city, and the housing market deals with huge influxes of wealthy gentrifiers who raise the value of housing constantly. It’s a mess!

Our very own Cea Weaver, the assistant-director of UHAB’s Organizing and Policy Department, was quoted yesterday in the Nation’s series on the first 100 days of Mayor de Blasio, touching on these very issues.  How can wages remain  low while the Rent Guidelines Board continues to raise rents on affordable housing year after year?

great if the RGB prioritized things beyond operating costs in determining increases. In the last few years rent has continued to climb while wages have stagnated, and the RGB should take that into account.

But as  the same article notes: rent doesn’t cause income inequality, income does. And higher income would make it infinitely easier for working class New Yorkers to afford sky-high rents. While national momentum to raise the minimum wage is high these days, it’s as hard as ever to pass anything legislatively in Washington.  For this reason, President Obama announced today that he will issue an executive order to raise federal worker’s salaries to adhere to a $10.10 minimum wage!

This will tangibly impact thousands of low-income workers, particularly those who work minimum wage jobs on army bases.  Over 600 economists recently signed on to a letter suggesting that a $10.10 minimum wage nationally will help the economy, as well as bring 5 million people out of poverty.  To support raising the minimum wage on a national scale to $10.10, sign this petition.

In other news, Newark will pass a law ensuring 5 sick days per year for all private- sector employees, including in food care, child care, and direct care services, industries that have historically been left out of some labor laws.  The paid sick leave trend is expanding: Newark is the eighth city to pass a this type of law, and many more bills are working their way through local legislative systems.  No one should have to choose between their health and their ability to pay their rent or support their family.  In one of their first moves at the helm of the City, Mayor Bill Del Blasio and Speaker Melissa Mark Vivierto announced their intention to expand New York’s paid sick leave law by requiring businesses with 5+ employees to provide sick days. While business owners fret, experience from other cities shows that paid sick leave bills work extremely well.

Paid sick leave and an increased minimum wage directly impact tenants we work with, and their ability to pay their rent, and remain healthy and employed. So let’s keep the momentum going on passing these progressive bills!

Finally, we wanted to give a quick shout-out to folk-legend and activist, Pete Seeger, who passed away on Monday.  His radical politics got him in trouble time and time again but never strayed from his values.

“My job,” he said in 2009, “is to show folks there’s a lot of good music in this world, and if used right it may help to save the planet.”

Mapping a Tale of Two Cities

Everyone is talking about Bill de Blasio’s “Tale of Two Cities.”  One is the rich New York, the other is the poor, working class New York.  That division can be seen on gender lines, racial lines, and political lines. But there is one uniting factor in all of BDB’s divided New York: everyone voted for him. Winning by a landslide, Mr. De Blasio will become New York City’s mayor in January and, with that, the platform of income inequality (Occupy Wall St, sound familiar?)

 Atlantic Cities published a map illustrating the two cities by percentage change in property values between 2008 and 2012.  The map essentially shows which neighborhoods were hardest hit by the housing crisis:

With a few exceptions, it’s Manhattan and adjacent sections of Brooklyn, Queens, and the Bronx that have seen assessments go up in the data from the New York Department of Finance that Walker mapped, which encompasses 958,000 properties. In many of the working-class neighborhoods of the outer boroughs, the value of real estate has actually fallen.

 This map speaks to two main issues in housing: first, that low-income tenants residing in wealthier or gentrifying areas are being forced out of their homes due to speculation and predatory equity.  It also speaks to the ways that the foreclosure crisis has hit homeowners, specifically black homeowners, in a particularly hard way. It’s clear who suffers and who profits in these scenarios. Working class and middle class New Yorkers loose homes, equity, and stability, while wealthy New Yorkers (bankers, landlords, and developers living in high income neighborhoods) profit.

 In our work, we see mostly the tenant side of the story. We see low income tenants living in buildings and neighborhoods swept up in predatory equity.  Tenants are harassed through fees added on to their rents, through lack of repairs, though illegal rent increases. We see this is the rapidly gentrifying neighborhoods of Crown Heights and Ridgewood, but also throughout the Northwest and Central Bronx.

 While speculators may be throwing huge amounts of money into gentrifying neighbors, out of town private equity companies have not done their research on the “Tale of Two Cities.”  It seems like speculators assume that they can skirt rent laws, force tenants out, and bring in higher paying tenants.  Too bad for them, many tenants, especially the ones we work with, are organized and know their rights.  Bill de Blasio has promised to fight for a a rent freeze, something we’d certainly support and that would make the Predatory Equity model even more unsustainable. While Michael Bloomberg’s administration – by the own admission – doesn’t know what to do about gentrification a rent freeze would go a long way towards keeping neighborhoods affordable and discouraging speculation.

Speaking of speculation, journalists near and far are speculating whether or not a de Blasio mayoralty will live up to it’s progressive campaign platform. We hope so. Here’s another thing we know: if he starts to waver on his housing goals, there are organized tenants all over New York City ready to hold him to his promises. We’re with them.

 

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!

Speculator today, slumlord… today?

broken stairs 10.7.13 now fixed

After two years of tenant organizing, not that much shocks me anymore.  I’ve seen holes in ceilings, mold covering bedroom walls, and families living without basic amenities like fridges or stoves.  But walking into 755 Jackson Avenue in the Bronx was a shock.

A quick rundown: The building has 11 units and 215 code violations. It’s in HPD’s Alternative Enforcement Program, and on the Bill de Blasio’s Worst Landlord List.  The building has asbestos, lead paint, mold, leaks, and two tenants were injured on a collapsed staircase (pictured above).

And if that’s not enough, it’s owned by the one and only Stabilis Capital Management.  (In case you forgot, Stabilis is the lender on 836 Faile Street and six buildings in Ridgewood, all of which are in foreclosure and in deplorable condition.)

Wait! Stop the presses!  Stabilis owns buildings?  That was our question, too, given that we’ve only ever seen them acting as a mortgage holder interested in flipping debt.

That probably was their plan here as well, but things went wrong: Stabilis bought the debt at 755 Jackson Ave while the building was in foreclosure.  When the building went to auction, we assume no one bid and Stabilis took the title by default. It seems like it was all a big mistake. With a lot of consequences.

While Stabilis became owner in June, they have done nothing to step forward and claim responsibility for the building.  This has left tenants in a position where they don’t know who to call in an emergency or who to pay rent to. It leaves the City responsible for repairs. The building is effectively abandoned.

We’re now organizing at Jackson Avenue and tenants are planning to push Stabilis out of their building. And now that we know how Stabilis treats the buildings they own, we’re doubly fired up to fight against them at Faile Street and in Ridgewood, Queens.

Tenants, elected officials, and advocates are demanding that Stabilis find a responsible way to dispose of this property, and the other distressed multifamily buildings in their portfolio.  Check out Councilmember Maria del Carmen Arroyo’s letter to Stabilis Capital here, and stay tuned to our campaign!!