Two weeks ago, Crain’s New York Business reported on a breakthrough deal on 4 Bedford-Stuyvesant buildings between MHANY and New York Community Bank, which we hope will fundamentally change how notes in foreclosure are bought and sold in New York City. The article detailed the relationship between housing advocates and NYCB, and the many new tools utilized by MHANY, HPD and the bank to complete this important deal. One thing missing – something that we believe to be very important – was the tenant’s perspective.
The four buildings in question are 230 and 232 Schenectady, 896 Madison Street, and 266 Malcom X Boulevard. The owner of these four buildings, Bernard Neiderman, is a notorious Brooklyn slumlord. We get out to many buildings in Bed-Stuy and Crown Heights, and tenants know his name. In one horror story, he refused to heat to an entire rent-stabilized building through the winter unless tenants signed leases that illegally raised their rent. Though tenants eventually filed for a rent reduction and won, their case was not honored by Neiderman and has yet to be acknowledged by the receiver who subsequently took over.
Neiderman’s buildings are in foreclosure all over central Brooklyn, and tenants in his buildings have officially and unofficially banded together to swap stories about their old landlord and current receivers. The receivers vary in quality, but one thing is certain: tenants are thrilled the buildings won’t be going back to Bernard. Last night, a tenant at 896 Madison told me, “I’m glad he lost all his buildings and I hope he’s gone forever.” Like us, they see foreclosure as an opportunity to improve conditions in their buildings and build a relationship with a new, more responsible landlord. The four buildings bought by MHANY (which were in foreclosure with New York Community Bank) can safely say that they have won their fight for a preservation deal. We’re still negotiating with Valley National Bank on three other Neiderman owned foreclosure buildings in the same neighborhoods, and hope that those tenants will have similar success.
Tenants at 230 and 232 Schenectady, 896 Madison, and 266 Malcom X have been through hell. Soon, they’ll be able to say “we’ve been through hell and back again.” But for now, there is still a long road ahead. MHANY (now the lender) has to finish the foreclosure, take title to the buildings, and close on a construction loan from HPD. The group plans to do gut renovations on at least 3 of the properties, which means that tenants and MHANY will have to negotiate relocation agreements.
Tenants are unhappy about moving but overall believe that the temporary discomfort is worth long term affordability and great new apartments. About a year after moving out, they’ll return home to brand new buildings. Rents will remain at or below 30% of their income. This means that they are now protected from the displacement associated with gentrification that is taking place in Bed-Stuy and Crown Heights, where many of them have lived for over 30 years. As one woman told me, with joy in her voice, “I’ll come home and then I’ll never leave 230 Schenectady again until the day I die.”