The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

Tag Archives: tenants

Banks Walk Away?


1153 St. Johns Place, Photo via Property Shark

Last night, tenants at 1153 St. Johns Place brainstormed ways to organize in order to improve conditions in their building. Even though their tenant association is active and they are represented by South Brooklyn Legal Services, tenants are in a tight spot. Their building has been in foreclosure for many years, and is currently being managed by court appointed receiver Scott Nunnally. The Plaintiff, Flushing Savings Bank, claims to have sold the mortgage over a year ago to someone named Alex Varveris.  However, he has neither substituted into the foreclosure case nor registered a mortgage transfer with the County Clerk. The court is also not moving the foreclosure case forward. It seems that it’s up to tenants to try and do that themselves – which is what they decided to do last night.

With an absentee landlord and an open foreclosure case that is dead in the water, it seems that 1153 St. Johns Place tenants are in indefinite limbo. And, the plight they are facing is not unique. According to The Real Deal, “some banks are deciding that in some judicial foreclosure states – like New York – it is more lucrative to walk away from distressed homes.” And Ed Jacob, executive director of Neighborhood Housing Services of Chicago, told CNBC:

What we’re finding in those neighborhoods is in judicial states [where a foreclosure case has to go before a judge], banks are making a decision that it’s going to take two years to complete this foreclosure, and increasingly cities are enforcing things on codes and vacant buildings. Banks are looking at what the residual values will be and then the costs they will incur and essentially saying it’s not worth it for us to go through the entire foreclosure process.

Though this article is primarily about single-family foreclosures, the emerging pattern is consistent with what we have been seeing in New York City’s multifamily housing. And it has serious implications for tenants, particularly in buildings like 1153 St. John’s Pl, where the borrower has also walked away.  This begs the question, who is responsible for the upkeep of their homes?

The practice also has implications for New York City taxpayers. As The Real Deal points out:

[Borrowers] who walked [on the property] before the bank mailed out notice of its plans to abandon the property  may have no idea that they still own their homes – or that they are liable for upkeep and property taxes.

At 1153 St. Johns Place, someone owes both property taxes and massive HPD fines. If responsible parties continue to walk away from this building, these fines will never be collected.

It’s bad policy and negligent for banks to simply walk away from distressed assets, particularly when it goes hand in hand with a note sale to a questionable party — like Alex Varversis. However, it could be an opportunity for a responsible developer – or tenants themselves – to recapture this affordable housing stock. To stop such patterns and preserve affordable housing, creating  more innovative practices is imperative.

Housing Court: Who is Representing Tenants?

Eviction Notice

Housing court — the epitome of inequality.

Two weeks ago, the New York Times published an article detailing the imbalance of power within housing court. According to the article, millions of Americans face eviction each year.  Of those cases, 90 percent of landlords have legal representation while 90 percent of tenants do not.  Without proper legal training, most tenants cannot win against attorneys and are, in turn, evicted from their homes.

How do we rectify the unprecedented number of evictions and, as a result, lessen the growing problem homelessness in our city? One solution, according to Matthew Desmond, could be “publicly funded legal services for low-income families in housing court.”

In 1963, the Supreme Court unanimously ruled on the landmark case Gideon v. Wainwright, which requires the defendants in criminal cases to have legal representation. The court judges insisted that without legal representation, the hearing would be unfair. Eighteen years later, the Supreme Court heard the case of Abby Gail Lassiter, which concluded that defendants in civil cases also required representation, but only specific types of cases where “the loss of physical liberty was at stake.”

While our laws protect those facing jail time, they do not protect against those facing homelessness. Each experience is undeniably torturous, yet we wonder how the court has decided that a prison-term is worse than a term on the street. Once someone becomes homelessness,  changing that reality is incredibly challenging.  According to the National Coalition for the Homeless (NCH), only 77% of homeless youth attend school regularly. The NCH also sites that 16% of the adult homeless population experiences severe and persistent mental illness. With the continued cuts to public assistance programs like Work Advantage, combating and overcoming homelessness is near impossible (especially in our post-Sandy reality).

Increased legal representation for all civil cases would also limit the number of landlord abuses. Take the tenants living in 1507 St. Johns Place in Brooklyn. They have received numerous threats from their receiver accusing them of not paying their rent. If the tenants were not already working closely with Brooklyn Legal Services due to the foreclosure of their building, there is a good chance they would have been evicted from their homes and thrown onto the streets.

Some may question the cost of implementing a publicly funded program that would give all defendants in civil cases the right to legal services.  According to a 2010 report issued by the Task Force to Expand Access to Civil Legal Services in NY, providing legal assistance in civil cases increases federal benefits for low-income New Yorkers. The report estimates that in terms of benefits won and costs saved, the state would generate more than $400M. Not only would this type of program reduce the rising rates of homelessness, it would also give the city an opportunity to allocate much needed money elsewhere, including healthcare and employment (or other plans to build up long-term affordable housing in NYC!)

Providing representation for tenants in housing court is not only a monetary issue, but a moral issue. To ensure that all legal proceedings are as lawful as possible, we must ensure that both the prosecutor and the defendant are equally protected under the law. In order to have a truly fair outcome, equal representation is necessary.

Honoring the Many Manifestations of Home

This post was written by Danielle Siegel, our new AVODAH. Stay tuned for most posts from her for the coming year! 

Today is a testament that there are many manifestations of home.

I am a native Californian. I moved to New York City three weeks ago. I began working with UHAB six days ago. And today is my first day being in New York City on 9/11.

UHAB is located within three blocks of the Wall Street subway stop. As you exit the train, a boldfaced sign reads, “9/11 Memorial.” Today, as I disembarked from the train, that sign ignited my memory.  I recalled my whereabouts eleven years ago.

I was elevens years old, and woke up to the shrill of my parents as they attentively watched the morning news.  We sat before the television in disbelief, unwilling to accept that the unimaginable had occurred.  My memory also illustrated my school as a space of silence—as usual, students occupied the hallways, cafeteria, and locker rooms that day, but they all operated in silence. Even three thousand miles away from the collapsed towers, the tragedy was palpable.

But nothing is like being in New York on 9/11.  Walking to my office, I imagined Wall Street on that day. I pictured thousands of people running down the street, paralyzed with trepidation and grief. I pictured debris and ashes dancing through the street.  And, like my school, I pictured silence, but one that demands stillness.

And today, as I proceed down Wall Street, I feel that silence and stillness among the taxis, street vendors, and business folk. Taxi drivers seem more patient. Street vendors seem more engaging. Business folk seem more considerate.   By no means has New York stopped or lost its essence today, but there is a pause in the air– an acknowledgment of 9/11’s tragedy and appreciation for the witnesses that continue to utter its memory.

Today, New York feels more like a community, standing in solidarity not only as survivors of the physical violence of the attacks, but the trauma that subsequently followed. Undoubtedly, that solidarity springs from a common narrative. The uniqueness of being in New York on 9/11 speaks to the threatening of a collective space that we call home. To New Yorkers, the concrete space where the Twin Towers once stood is home; these are the spaces that we spend the majority of our days, indulging in meals, formulating new relationships, enhancing our minds. To threaten our home is to threaten our livelihood. And that, in part, is why we feel the emotional intensity of 9/11.

The solidarity brought about by 9/11 works in conversation with the work I am now engaging with at UHAB—supporting tenants’ right to affordable and quality housing.   As I glance into the coming year, I recognize the importance of a space that we each call home—one that connects us to ourselves and constructs the fabric of our daily lives. Without access to these spaces, our foundations and emotional stability suffer.  However, this is where tenants, like New Yorkers that have lived through 9/11, inspire me– regardless of the injustices they have encountered, they are still willing to wage the battle and continue fighting. As I begin to witness the perseverance of tenants, I feel honored to engage in the battle for stabilized housing.

As the workday comes to a close and our experiences of 9/11 fall back into the backdrop of our minds, I encourage y’all to acknowledge the many manifestations of home as well as the importance of honoring and preserving those spaces.

This post is in honor of the victims and survivors of 9/11. 

Are “Banklords” the New “Slumlords?”

Photo via

Last Friday’s Morning Edition included a segment titled “With Banks as Landlords, Some Tenants Neglected.” You can read the story or listen to the segment here. This story touches on an issue we at The Surreal Estate hold near and dear: how the foreclosure crisis is affecting those who live in rental housing. We believe that tenants are truly the most innocent victims of the foreclosure crisis; they are suffering without ever having signed a mortgage.

The families interviewed for this segment live with bed bugs, mold, leaks, fallen ceilings and aging appliances: the same litany of abuse that tenants in New York City face in their day to day lives. The article grapples with an emerging issue in the weak multifamily housing market: lenders who become landlords as buildings are unable to be sold at foreclosure auction. This category of bank-owned property is known as Real Estate Owned, or “REO.” It is unsurprising that banks who make bad loans also are negligent property owners.

There is one significant difference between the New York City market and the markets discussed in Morning Edition. (Oakland, CA and Washington, DC) In New York, we have yet to see a real influx of REO properties to multifamily housing market. It seems there is no shortage of idiots willing to pay top-dollar to own property in New York City. As one person described it recently, far-flung speculators don’t necessarily know the difference between Park and 72nd and Park and 172nd. To them, it’s all just Park Avenue. Perhaps as the market stays depressed and the amount of foreclosures continues to rise, we will come across more REO properties. But for now we’re just beating off slumlords with a stick to try and clear the path for qualified preservation developers.

Goodybe 2011: A year in Review

For those of you new to this blog or trying to get a handle on Predatory Equity in New York City – here’s your down-and-dirty year in review.

Highlights, Lowlights, and the Stuff in Between:

1. Lowlight: In April 2011, New York Affordable Housing Associates sold eight  distressed buildings to Bronx VIII LLC (Townhouse Management). While we still don’t know how much Townhouse paid for the buildings, the disappointing transaction was facilitated by New York Community Bank – who explicitly sold the debt to a developer the tenants did not endorse.

2. Somewhere In Between: In May of 2011, Finkelstein Timberger Real Estate bought the infamous ten building Milbank portfolio for the giant sum of $30 Million dollars. This transaction, which still reeks of over leveraging, was made through financing with Signature Bank. Fortunately for tenants, their advocacy throughout the process meant that all of the tenants are protected by an agreement to ensure repairs, eliminate the quest for back-rent, and cap the amount for potential MCI’s in the next two years. Additionally, six of the buildings entered the city’s Alternative Enforcement Program, ensuring further protection from the horrible conditions these tenants suffered for years.

3.  Highlight: In May 2011, after two years in foreclosure, the tenants at Borinquen Court in the Bronx had their building purchased by the non-profit organization West Side Federation for Senior and Supportive Housing. It was a a hard earned victory and the tenants are looking forward to living in a building with the owner they chose!

4. Somewhere-In-Between: Rent regulation was extended in June 2011! The “grand compromise” however has many complaining about the fact that  rent-regulated affordable housing has not been permanently preserved due to the fact that vacancy decontrol is still in effect.

5. Lowlight: In September 2011, The Bluestone Group sold a group of six dilapidated Bronx buildings to Anthony Gazivoda for a whopping $17 Million dollars. This made for the fourth over leveraging of this severely distressed portfolio.

6. Highlight: In September 2011, 1520 Sedgewick (AKA the “Birthplace of Hip Hop”) was saved! With tenant endorsement, Winn Residential and Workforce Housing Advisors purchased the building with an extensive rehab scope and permanent affordability plan to accompany the acquisition!

It was a busy year fighting for decent conditions and permanent affordability in New York City housing. UHAB organizers, tenants, and allies are still actively fighting to against over leveraging, bad conditions, negligent landlords, and against the banking industry’s bottom-line, top-dollar mentality. As Predatory Equity becomes a clearer and more understood trend,  we sincerely hope that our 2012 year in review will hold fewer lowlights and many more highlights as we continue to develop new tools to fight this rapacious phenomenon.

See you in 2012! We have a feeling it will be a great year!

%d bloggers like this: