Public Advocate-elect Letitia James, Members of the New York City Council, Bronx and Queens Tenants, and Advocates Demand that Investment Firm Stop Putting NYC Affordable Housing at Risk

IMG_4806For Immediate Release

Kerri White (UHAB), (212) 479-3371, (520) 507-5863 (c),
Ian Davie (Legal Services NYC-Bronx), (718) 928-2889, (917) 751-5992 (c),

Fed-up tenants, sick of Stabilis Capital Management speculating on their homes while conditions worsen, call for the firm to transfer distressed properties to capable owners.

December 3, 2013, Bronx, New York — Public Advocate-elect Letitia James and tenants from eight buildings across New York City gathered this afternoon outside 755 Jackson Ave in the Bronx to demand that Stabilis Capital Management transfer various buildings to city-approved preservation developers. The tenants were also joined by the Urban Homesteading Assistance Board (UHAB) and Legal Services NYC (LSNYC) and representatives from the offices of Council Members Maria del Carmen Arroyo and Diana Reyna.

Stabilis Capital Management (Stabilis), a private equity company which holds the mortgages on, or owns, the eight deteriorating buildings, has been acquiring distressed debt on multifamily buildings in foreclosure across the City. Tenants residing in the buildings, many of whom are elderly or disabled, have struggled to endure hazardous, substandard living conditions because Stabilis has neglected to complete repairs or assist with court orders to address housing code violations.

“I am incredibly concerned not just for the safety of the families in these buildings, but for tenants throughout New York City who find themselves facing deplorable housing conditions as winter sets in,” said Council member and Public Advocate-elect Letitia James. “We will continue to fight to ensure that residents are not the victims of such dangerous lending practices.”

Conditions at 755 Jackson Avenue have declined dramatically since Stabilis took ownership in June of this year. Residents suffer from lead paint contamination, asbestos exposure, rodent infestations, and chronic water leaks. In October, the stairwell collapsed, injuring two tenants. The New York City Department of Housing Preservation and Development (HPD) has identified 221 open code violations, an astounding number for an 11- unit building. The building is in such poor condition that it has been placed into HPD’s Alternative Enforcement Program, which is reserved for the 200 most distressed and hazardous buildings in New York City. Tenants plan to advocate for Harry DiRienzo of Banana Kelly to be appointed as an administrator to manage the building.

The announcement came the same day that tenants at 836 Faile Street, also in the Bronx, filed a motion in Bronx Supreme Court demanding that Stabilis provide funds to complete repairs in their building. Stabilis purchased that 36-unit Hunts Point building’s mortgage in March 2012; the building currently has 138 code violations.

“These buildings exhibit the worst effects of predatory equity in New York City,” said Ian Davie, an attorney with Legal Services NYC-Bronx. “Stabilis manages over $500 million in investments, but somehow continues to ignore and evade common standards of decency, to the detriment of all New Yorkers. These brave tenants are taking a stand to protect their families and maintain their right to live in safe homes.”

“It is horrible that my young children and I have had to contend with rat infestations, mold contamination, water leaks, and spotty heat and hot water during the winter,” said Joanna Paulino, a longtime tenant at 836 Faile Street. “Nobody should have to live with these conditions for one day, let alone the months and years that we have endured. We are ready to put a stop to this.”

The Bronx tenants were joined by tenants from other buildings who have experienced the detrimental effects of Stabilis’s lack of management. Stabilis also purchased the mortgages on a 36-unit Queens portfolio in February 2012 – 1821 and 1894 Cornelia Street, 18-14 Linden Street, and 1673, 1675 and 1726 Woodbine Street – which currently list a total of 380 code violations. Tenants fear that if Stabilis continues its involvement as a lender or landlord, it will continue to neglect and mismanage the buildings until they become uninhabitable. These tenants have appeared in bankruptcy court to hold Stabilis accountable, with the assistance of Queens Legal Services (a program of Legal Services NYC) and Cleary Gottlieb Steen & Hamilton LLP.

Tenants in all eight Stabilis buildings face serious health concerns, including cancer, asthma, and injuries caused by falling staircases. Those health problems are exacerbated by their living conditions. The tenants are working with responsible developers who are interested in preserving the properties and are attempting to negotiate with Stabilis. They hope that Stabilis will sell the debt or the buildings to these preservation developers, who would prioritize the health and safety of residents.

“This isn’t investment, this is disinvestment and it harms New York City,” said Kerri White, Director of Organizing and Policy at UHAB. “Stabilis should stop this destructive ‘business’ model and transfer these buildings to a responsible developer who can maintain them and keep them affordable for the families who call them home. We’re standing here today – tenants, advocates, and elected officials – to reiterate that we cannot continue to permit this predatory behavior to exist in our city.”

“For the past 12 years, I have seen too many unscrupulous and predatory real estate investments severely undermine the livelihoods of working families throughout New York City,” said Queens Council Member Diana Reyna. “Stabilis Capital Management must understand that we won’t accept more predatory speculation of land in our communities. I urge Stabilis to consider a bid from a non-profit developer that will ensure the affordability of the properties in question and provide security to the current tenants.”

“The residents of these buildings deserve better,” said Assemblyman Marcos A. Crespo. “No individual or corporations financial interest should depend on the suffering of children and families in our community. Stabilis must allow a preservation developer to take over as soon as possible and complete much needed repairs.”

“There shouldn’t be a place in our community for neglectful landlords,” said Assemblyman Eric Stevenson.



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!!

“BREAKING: Tenants Officially Submit Creditor Claim in US Bankruptcy Court”

Bathroom, 1894 Cornelia
Bathroom, 1894 Cornelia on 8/21

This morning, after several months of preparation, tenants at six buildings in Ridgewood, Queens entered Bankruptcy Court to make an official claim against their landlord, Steven Kates. Because of poor, inhabitable conditions, tenants are asserting that their landlord owes them money, as well as insisting on emergency repairs and relief. 

As a result of organizing efforts leading to pressure being put on both Stabilis Capital (the lender) and Dafnonas Estates (the management company), repairs are getting done.  Holes have been patched, smoke detectors have been installed, walls have been painted.  Still, much is yet to be done. Katrina, a pregnant woman residing in 1894 Cornelia, for example, lives with an enormous hole in her bathroom (pictured above) which rains water every time the upstairs neighbor takes a shower.  Worried about mold effecting her unborn baby’s health, Katrina is afraid to step foot in that section of the apartment.  Why are the walls being painted in this building while Katrina is forced to live with emergency conditions?

Through bankruptcy court, tenants hope to force Stabilis and Dafnonas to the negotiating table and have a conversation about long term building preservation. Katrina and her neighbors have identified CATCH, a mutual housing nonprofit developer, as a group they would like to own their building. (From conversations with their attorneys, UHAB knows that Stabilis is not interested in long term ownership.)

The buildings are located in Ridgewood, Queens, which the New York Times has declared the new place for young Brooklynites to move. For this reason, Stabilis probably hopes to make a lot of money flipping these properties.  Young hipsters (gentrifiers), who normally are willing to pay higher rents, are being pushed out of Brooklyn and across the border into Queens. As so often happens in situations like this one, long term tenants, like the ones in the 6 Stabilis Buildings, are feeling the squeeze. As tenant leader Denise Serrano told us a few weeks ago:

 I grew up in Williamsburg, and thanks to rising rents my family was forced to move. I raised my children in this building, and on behalf of myself and my neighbors, I do not want to see that displacement happen again here.

When blogs like Brooklyn Mag are posting articles with the headline, “Should we all give up and move to Queens?” they should be aware that Ridgewood is not an just an affordable enclave for young artists, it’s home to many people — many people who are not, to put it mildly, “giving up.”

Queens and Bronx Tell Stabilis Capital What They Need for their Buildings!

Tenants have been trying to get their voices heard by Stabilis Capital, the mortgage holder on their distressed buildings in Ridgewood, Queens and Hunts Point, Bronx (among others).  Stabilis has been purchasing mortgage notes on buildings like these throughout New York City, and it’s time to determine what their plans are for the buildings.  Will Stabilis take responsibility for the mortgages they’ve purchased?  Will they ensure that the the next owners of the properties will be more responsible than the last? Or will they sell the buildings to the highest bidder, with no concern for the tenants who currently suffer in unhealthy living conditions?  

Tenants from Ridgewood and Hunts Point have written to Stabilis to express who they want to be the next owner of their buildings.  In both cases, tenants demand that a major rehabilitation is completed, and the buildings remain affordable for current residents.  We hope that this meeting is productive, and that the tenants’ voices will be heard!

Here is the letter from tenants from Hunts Point:

We are tenants living at 836 Faile St. As you may be aware, our building is in foreclosure and is in horrible condition. There are currently 146 violations recorded with HPD on 36 units, and over 1/3 of the building is vacant. We suffer with rats, mold, leaks, plumbing issues, bed bugs, and more. Tenants are reluctant to call HPD due to the threats of the landlord and the workers towards us.   

We are writing to ask that you sell our building to an HPD approved developer with the experience and commitment to rehabilitate our building. We are working with Getz Obstfeld from Community Development Inc. who has made an offer to you for the building.  He has completed a scope of work, is working with HPD, and has detailed plans to bring the building into good condition.

We cannot continue to live like this. Our neighbors and children suffer from asthma, which is only worsened by the rats and mold. We live without adequate security and feel unsafe in our own homes.  Please sell the building at a responsible price to a developer who will preserve our homes for the long term.

Here is the letter from tenants in Ridgewood, Queens:

We are tenants living at 1821 and 1896 Cornelia Street, 1726, 1675 and 1673 Woodbine, and 18-14 Linden Street. As you are aware, the mortgage on our building is severely overleveraged, the owner is in bankruptcy, and conditions in our homes are terrible. There are currently over 550 HPD code violations on the 36 units. We suffer from rats, mold, leaks, and both negligence and harassment from the management company. The few repairs that have been made have mostly come from HPD intervention.

We are writing to ask that you sell our buildings to an HPD approved developer with the experience and commitment to rehabilitate them. Because we are have maintained our buildings on our own for so long, we have identified a mutual housing group which would allow our Tenant Association to remain involved and in charge of the buildings. We are working with Ken Wray at Community Assisted Tenant Controlled Housing (CATCH). CATCH has completed a Capital Needs Assessment of our properties and has determined they need over $2 million in repairs to keep them habitable and affordable for the long term.

We cannot continue to live like this. Our neighbors and children suffer from severe health problems, which are only worsened by the rats and mold. One of our members is suffering from cancer and associated chemotherapy treatments; the conditions in our homes threaten her weakened immune system.

We understand that you are meeting with our elected officials on Monday, July 1st to discuss your plans for these buildings. We sincerely hope that CATCH’s forthcoming offer will be on the agenda.

UHAB & NYC Tenants Want to See You In Court!

peopleJoin us as we raise our voices in front of Bankruptcy Court. Let private equity firms know that ‘Housing Is a Human Right!’ 
This Wednesday, June 19, Tenants from Queens and the Bronx, along with advocates and community members will be rallying against the private equity company Stabilis Capital Management.In Stabilis-controlled buildings in the Bronx and Queens, low income tenants are suffering from unlivable conditions. In order to preserve affordable housing, tenants are demanding that Stabilis sell their homes to responsible owners NOW!

Join UHAB & Tenants from Across New York City in Telling Stabilis:

Affordable Housing is a Human Right!


Rally against Stabilis Capital Management.


Wednesday, June 19th, at 10:00 AM


Steps of Bankruptcy Court

1 Bowling Green, Manhattan.

(4/5 to Bowling Green, 1 to South Ferry, J/Z to Broad Street, R to Whitehall.)



CUNY Journalism Students Document “Bushwick Beyond the Brand”


photo: City Limits, 2009

Bushwick is one of those neighborhoods in Brooklyn that brings up a lot of…emotion.  “Oh, Bushwick. Oh, you live there.” It’s the artsy, quickly gentrifying neighborhood that’s not Williamsburg. Yet. But, perhaps more importantly, it’s also a neighborhood with a history, with culture, and with a community that is quickly being displaced.  This month, a group of CUNY Journalism students explored Bushwick “Beyond the Brand” to write about aspects of Bushwick which often get overshadowed.

One article focused on asthma in Bushwick, and how asthma throughout the City is correlated with poverty. In addition to high concentration of pollution, the authors interview Dr. Natalie Langston-Davis who credits Bushwick’s older housing stock to breathing problems in Bushwick:

That’s the case with the poorly ventilated apartment Mora shares with her son. Asthma is also exacerbated by children’s allergies to rodent and cockroach droppings, Davis said.

As tenant organizers, we’ve seen the strong correlation between tenant health and building conditions in many, if not all, of the buildings where we work.  One tenant in a building in Ridgewood, Queens (just across the street from Bushwick) is undergoing chemotherapy while simultaneously battling a mouse and rat infestation in her building.  Even if she had the energy to extensively clean day after day, it would hardly be enough to prevent exposure to the dangerous germs in rodent dropping and dust.

Another hugely important topic that CUNY students explored in their project is the the relevance of the M train’s expansion in 2010 on Bushwick’s changing demographics.  When the M train was expanded into Midtown Manhattan, Bushwick (and likely Queens) experienced an influx of higher paying tenants interested in easy access to the city.  Between January and March of 2013, Bushwick rents rose almost 32%, and real estate investors believe those prices will continue to rise:

In 2012, Bushwick captured 28 percent of all multifamily building sales in Brooklyn by Ariel Property Advisors, the highest rate in the borough, according to  the  investment sales firm. “Investors not only believe in the strength of rental market, but can see these buildings as lucrative conversion opportunities in the future,” says Jonathan Berman, vice president of Ariel.

This is dangerous talk, the kind that leads to predatory equity.  When investors buy buildings based on rent “potential” rather than current rents, debt levels become dangerously high.  The only way to sustain the over-leveraged debt is to skimp on services and force out long-term tenants, thus leading to gentrification and the dilapidation of the rent stabilized housing stock. Over-leveraging can happen in rent stabilized multifamily buildings all over New York, but it’s much more likely to occur  successfully in quickly gentrifying neighborhoods like Bushwick or Crown Heights.

Some consider gentrification to be a byproduct, if an unpleasant one, of neighborhood improved and the influx of capital into previously distressed areas. However, it is often the result of choices made by specific actors who prioritize real estate speculation over the human right to housing. One such actor is broker company MySpace RealtyMySpace has recently come under fire from activists and organizers for colluding with bad actors who see harassment and neglect as acceptable behavior when it comes to established, rent regulated tenants.

To check out the other topics CUNY journalism students reported on, click here, and to view a 2009 photo essay published  in City Limits documenting Bushwick’s area code 11237, click here.

Fighting for Preservation in Ridgewood, Queens


Tenants living in 6 buildings in Ridgewood, Queens are caught in the middle of a complicated foreclosure and bankruptcy case which will determine the future of their homes. While the courts continue to drag out the 5-year-and-counting foreclosure, tenants suffer from horrible living conditions with no one to turn to.  Check out Friday’s video from Channel 11 News demonstrating the unsafe living conditions tenants face on a daily basis. 

Here are tenants allies and adversaries in the fight for affordable housing preservation:

Steven Kates, Landlord: Mr. Kates is fighting the foreclosure in bankruptcy court. However, he never could be trusted: he lied about the number of units in the 6 buildings to take out an unreasonably large mortgage! Tenants are fighting to make sure that he does not get to keep these buildings. 

Stabilis Capital: The original lender, Washington Mutual, collapsed in the 2008 financial crisis.  Chase, who took over the failed bank, sold the debt to Stabilis — a private equity company we’ve seen lend on other severely distressed properties. We hope that Stabilis will come to the table to meet with residents and advocates to work out a deal that will benefit tenants and NYC’s affordable housing stock.

CATCH: Tenants have asked CATCH, a nonprofit preservation developer to purchase their buildings, rehab them, and rent them at affordable levels. Tenants want to have a voice in the way their buildings are managed, and CATCH runs buildings they own through “mutual housing,” which ensures resident-input. However, in order for CATCH to buy the buildings, they will have to purchase the note at a discount and wind their way through bankruptcy court.

Elected Officials: Tenants have found a great deal of support from their elected officials, including Congresswoman Nydia Velazquez and City Councilwoman Diana Reyna. They hope that through political pressure, Stabilis will discount the mortgage on these six properties (which they likely bought for a discount from Chase) and sell them to CATCH. With the help of Councilwoman Diana Reyna, tenants are asking HPD to remove these buildings from the lien sale list. The liens are a crucial tool that will give the tenants some serious leverage in the bankruptcy case.

Queens Legal Services: Tenants are represented by Queens Legal Services to help make sure that immediate repair needs are met. While the bankruptcy case has made legal matters a little confusing, attorneys are strategizing to get repairs done as soon as possible.

Stay tuned on this exciting fight to preserve affordable housing in Ridegwood, Queens!