At the end of January, after almost a year of meetings, negotiations and frustrations (mostly from abused tenants), we were successful in obtaining title to three buildings on College Avenue. This is our second successful effort to recapture over-leveraged, distressed properties from unscrupulous speculators.
This is a new and unprecedented challenge facing our city’s affordable housing sector. In the prevailing business model of pre-Great Recession times, banks would loan money to speculators based upon projections of increased rents based on capital improvements that, in many cases, were never made. Now, there are an estimated 70,000 units of such housing in the city, with many of these located in the Bronx.
These efforts are important and merit more support, focus, and targeted city enforcement. But this approach is a substantial departure from what most CDCs are accustomed to. For most of our history we have been able to rely on vacant city-owned land and buildings to develop affordable housing. But now there are no expedited procedures for removing bad landlords. And for many residents in these distressed properties, as we the case at Kelly Street, basic humanity dictates prompt action, whether it is for the family with a newborn child with no heat and no living room window, or the tenant with AIDS with so much mold on his walls that you can scrape off a handful with ease, or the family that is forced to used pans instead of a toilet because there are no ceilings in the bathroom and the building is infested with rats.
These are real stories from actual experience. We are proud of our track record with these kinds of projects to date, but there remains much work that needs to be done.
Harold DeRienzo, President
Banana Kelly Community Improvement Association, Inc.
1 Comment
hderienzo · March 2, 2013 at 2:46 pm
Thank you. Unfortunately, these projects are very difficult and there is no one specific approach. But the important aspects are: (1) there needs to be some threat to the owner regarding rent collection, which can come either from Housing Court appointment of a 7A Administrator or Supreme Court appointment of a receiver as part of a foreclosure process; (2) it is important to be able to speak with the bank — in the first deal the bank would not even return phone calls, but in the second, the bank was very helpful, but only when we agreed on a number (the amount of debt we were willing to assume); (3) there is a need to understand what is going on with title and the owner — in the first deal the owner walked as soon as we took over as 7A, and in the second the owner was trying to get every possible dollar right up through the closing; (4) from our perspective it is important that tenants be organized.
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