NYC Foreclosure Story Misrepresented in The Village Voice

Ben Sin, a journalist with The Village Voice, has been featuring the foreclosure crisis several times a week in order to highlight the persistent problem facing our country and city.  In a city like New York, where the majority of residents rent, foreclosure is complex, complicated, and not always black and white. The media often portrays foreclosure as a battle between defaulter (innocent) and bank (evil) are not useful in all cases, as it show little awareness of tenants’ rights and the myriad of options foreclosure can present.

First and foremost, tenants in rent regulated units cannot be forced to leave their home as a result of their landlord defaulting on his or her mortgage. For New York City tenants, foreclosure does not go hand and hand with eviction and this basic right needs to be understood by those who claim to tell the story of New York City foreclosures. Furthermore, because of a process known as predatory equity, by the time a multifamily building falls into foreclosure it is usually in terrible condition. A landlord struggling to cover inflated mortgage payments based on a speculative loan is unlikely to make repairs. In cases like this, tenants widely see foreclosure as an opportunity to kick their slumlord to the curb (with the help of the bank) and bring in a more responsible actor, or perhaps even buy the building themselves and convert it to a low-equity co-op.

We do not want to represent that foreclosure is an easy opportunity to NYC renters. Banks are eager to get as much money back for their non-performing assets as possible and in doing so overlook tenants’ interests. Rather than allowing speculative private equity groups to buy buildings, banks should be pushed to negotiate fair prices and responsible sales with tenants and allies. This is the story that Mr. Sin and other journalists writing about foreclosure should be pushing. This is the action that Occupy Wall Street should support. Stopping foreclosure auctions is not necessarily what is important in multifamily foreclosures, though stalling the auction could potentially allow tenants more room to insert their voice into the process. Alternatively, it could leave them suffering in poor conditions under a receiver for many more years. Saving buildings from predatory developers who will run the building deeper into the ground and removing the option of long-term affordability is what we should be talking about.

Ben Sin’s beat on foreclosure demonstrates a simplified understanding about what foreclosure means in New York City.  By ignoring crucial pieces of information and real communication with tenants, stories being told in The Village Voice are misleading.  For example, in his article “Singing Protesters Strike Again; New School Students Interrupt Foreclosure Sale,” Sin writes:

The tenants of 556 Evergreen Avenue in Bushwick, which was one of nine properties set to be sold at the auction, did not show up to the auction. But when told of the blockade, Luis Mendoza, a handyman who lives on the second floor, were obviously relieved.

“So some kids saved our building from being sold today?” he answered. “I wish I was there, I would have played guitar to the song.

The building highlighted, 556 Evergreen Ave., is in HPD’s Alternative Enforcement Program, meaning it has very high code violation and has been flagged as one of the 200 worst buildings in the city.  This shows that the property owner, Moody Amar, is probably not a very responsible landlord.  Why should we block the transfer of this building to a new owner? What happens when the building switches hands? Will the new owner clear code violations with patchwork repairs, or will tenants fight to correct the underlying conditions and fix code violations behind the walls? What opportunity do tenants have to support a good, HPD-and-tenant vetted buyer to win the building at auction? This is the story Mr. Sin should tell in his foreclosure beat behind the buying and selling of distressed, foreclosed buildings.

The foreclosure process in New York City takes an unreasonably long time, adding to already difficult living conditions for tenants.  Court appointed receivers are often placed in buildings and have little or no concern for tenants, and rarely have the energy or funds to make necessary repairs.  When thinking about the multifamily foreclosure in New York City, the question is not how to prevent the foreclosure process from taking place, but rather how to finish the process quicker while simultaneously pressuring banks into doing the right thing.


“How to End the Cycle of Homelessness”…A Work in Progress

The NY Daily News published an opinion article today about the Institute for Children, Poverty, and Homelessness‘ newly released report titled “A New Path: An Immediate Plan to Reduce Family Homelessness.”  This report establishes a framework to confront homelessness in New York City, advocating for a multiplicity of paths to obtain permanent, stable housing.  The report lays out three tiers, or tracks, that families would be placed in based on need.  The first tier would be to place families straight into affordable housing, presumably helping them locate the housing and assisting with rent.  The second tier would be to locate housing, but also help with employment opportunities and other basic social services.  The third tier would be most similar to a shelter, only renamed “Community Residential Resource Centers” in which families live in the center and receive intensive job training, education, counseling, and assistance with child reunification.  Ideally, according to the report, these centers would also function as resources for the neighborhood at large.

While we at UHAB don’t deal directly with issues of homelessness, the majority of buildings we work in have at some point provided housing for New Yorkers in the Work Advantage program.  Sadly, we have witnessed heartbreaking stories from tenants who were in the program but whose benefits have been cut, leaving them with no options but to wait for the marshal to evict them.  The termination of Work Advantage for thousands of New Yorkers has not only effected individual families, but entire buildings.  Once the city stops paying a tenant’s rent, a landlord has less income to make repairs or continue paying a mortgage.  Buildings, as a result, more easily fall into states of disrepair, impacting the lives of all tenants and the larger community as well.

Predatory Equity destroys opportunities for families in New York to live in well-kept, safe, affordable housing.  This reality makes us skeptical of new programs which address homelessness, but don’t provide preservation plans or proposals for creation of new affordable housing.  One cannot go without the other.  Our question is in what buildings and neighborhoods will families be placed?  What ensures this program to be more sustainable than the Work Advantage program? Until the threat of continuous loss of affordable housing is quelled, we feel this plan will not be successful.

Maybe it’s time to ask homeless people themselves what services they want…Picture the Homeless,  a grassroots organizing group of homeless folks demanding respect and human rights, have a lot to say on the matter.


To read more about the Institute for Children, Poverty, and Homelessness report, click here.

To read more about Picture the Homeless’ recent action in response to a recent NY Post article, click here.

“Sen. Schumer, Christine Quinn Push Feds To Pressure Bank That Owns Shoddy Housing”: The Village Voice

As published in the The Village Voice by Elizabeth Dwoskin

Image courtesy of The Village Voice

A consequence of our sucky economy: The city estimates that around 125,000 housing units will go into foreclosure over the next two years.

In many cases, owners (including banks) are trying to unload these buildings, and while they wait, living conditions deteriorate drastically for tenants, with landlords racking up housing code violations for lack of heat and hot water, for toxic mold outbreaks, leaky roofs, and rodent infestations.

Conditions have gotten so bad, in some cases, that city officials have taken a lot of flak from advocates (and from journalists), and these buildings have become PR problems for the city. And so, over the past year, officials have been playing a bigger role, by being a middleman between tenants, banks, older landlords and prospective ones.

Today, city and state officials, and Senator Chuck Schumer, took things a step further by asking the federal government to force a big bank that owns many foreclosed and distressed properties to come clean about their finances and sell the properties to a responsible buyer.

New York Community Bank is one of the most active providers of loans to landlords that buy multi-family dwellings in the city. According to the Urban Homesteading Assistance Board, the bank controls the mortgages on 34 foreclosed buildings, which are home to 800 families. 328 buildings that are owned by the bank and home to 6,000 families are in very shaky condition: they have more than three hazardous health and safety violations per apartment. Until recently, the bank owned five properties that were on the city’s worst buildings list.

Last month, Mutual Housing Association of New York, a real estate company that has the support of the city’s housing agency and tenant advocates made a bid to buy the 34 foreclosed properties. According to City Council Speaker Christine Quinn, New York Community Bank turned the company down, saying the offer was too low.

Schumer, along with Quinn and Congresswoman Nydia Velazquez, say that the FDIC — the federal agency that supervises financial institutions — should force New York Community Bank to come clean to buyers about the actual state of the finances, living conditions, and repairs needs of the buildings. Though no one has said it outright, the implication here is that the bank is fudging the numbers to make the distressed buildings more attractive to a higher bidder. The other implication is that the city has not had the pull with the bank that it would have wished.

The New York pols say that what they are asking for is well within the power of the federal agency. Because many of these mortgages were securitized by Wall Street, and are therefore implicated in the wider economic crisis, Schumer and Velazquez had inserted a section into the Dodd-Frank financial reform bill — passed by Congress last summer — that makes the federal government take some responsibility for the problem of distressed mortgages on multi-family dwellings, which afflict big cites like New York.

Schumer said today in a press release: “Here is a perfect example for the FDIC to take into consideration as they help build a framework for this program. The message here should be clear: residents of affordable buildings throughout the City should not be the victims of never-ending cycles of overleveraged gambling by predatory equity investors.”