As City Does TPT Damage Control Fed Lawsuit Moves Forward

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As the city council readies for what is expected to be an explosive public hearing on the city’s controversial Third Party Transfer (TPT) program, plaintiffs in a federal class-action lawsuit charged in court papers yesterday that the city’s use of the program deprived homeowners of color their civil rights, and “invented” an illegal process that snatches properties without due process and in violation of the U.S. Constitution.

As first reported in KCP and followed with a series of over 30 stories, the City’s Department of Housing Preservation and Development (HPD) has allegedly been using the TPT program to target communities of color and confiscate properties collectively worth millions of dollars under the guise of creating affordable housing while calling the properties “distressed” and claiming owners were thousands of dollars behind on taxes and water bills.

Two of the three lead plaintiffs in the suit – McConnell Dorce and Sherlivia Thomas – were profiled in the KCP series here and here.

In the court papers, the plaintiffs assert that, “The City has requested in rem judgments from New York State Courts for the TPT Program in a wholesale fashion, illegally seizing bundles of private property and handing them off to its favored developer ‘partners’ for nominal consideration ($1.00), under the guise of tax collection. In a significant number of cases, the property belonged to African-American and/or Hispanic owners (many elderly), or were located in predominantly African-American, Hispanic and immigrant communities.”

This post was written too late in the day to get a response from the city, but typically the city does not comment on pending litigation.

Meanwhile, HPD continues to claim that the TPT program has been a success overall but did announce the creation of a task force to correct some of its pitfalls. Ironically, the task force is made up of several non-profits who gained from the confiscation of the properties including Neighborhood Restore and Bridge Street Development, who are also named as defendants along with the city, in the lawsuit.

City Councilman Robert Cornegy Jr

City Councilmember Robert Cornegy Jr. (D-Bedford-Stuyvesant, Northern Crown Heights), chair of the  Housing and Buildings Committee, said TPT originally seemed like a good premise until it started to capitalize on smaller properties.

“The alarm went up when the program began targeting three-and four-family properties,  disproportionately impacting black and brown communities,” said Cornegy, adding that the City Council’s investigation and report of the program coming up on Monday will leave the city and HPD unpleasantly surprised as to some of the glaring discrepancies.

Cornegy additionally said he supports the federal class-action lawsuit moving forward as historically black communities have fallen prey to redlining, bad lending practices and undervaluing of properties. Anybody that doesn’t want to address that race played a part in the taking of properties through the TPT program is mistaken, he said.

“How is it blacks are at about two percent of the city’s property ownership and 100 percent of the properties taken were in Central Brooklyn? We live in a city where almost all homeowners are cash poor and property rich and that’s as true in Boerum Hill as it is in Bed-Stuy, Crown Heights and Brownsville,” said Cornegy.

To which Attorney Yolande Nicholson, one of the attorneys for the plaintiffs, says her clients were denied their civil rights and the law upon which the TPT program is based must be declared illegal. “There is no way to ‘fix’ or ‘modernize’ something that is illegal. The City’s acts are repugnant to the Constitution,” she said.

The City Council’s Committee on Housing and Buildings is due to release the findings of their investigation into the TPT Program at the hearing slated for 1 p.m., Monday, July 22 at City Hall in Lower Manhattan.

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