Recapturing Distressed Properties From Unscrupulous Speculators

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.


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