Is it the de Blasio Administration’s way of creating affordable home ownership or is it a bureaucratic game of three-card monte with favored non-profit developers working as the dealer, the city working as shills and tenants becoming the marks?
Either way, the city is readying to temporarily transfer ownership of six Central Brooklyn properties they currently own to the non-profit Restoring Communities Housing Development Corporation (RCHDC), an affiliate of Neighborhood Restore, for a $1 each.
The non-profit will then turn over the buildings to Bedford-Stuyvesant-based developer Bridge Street, who will in turn move out existing tenants while they redevelop the properties, then move them back in and offer to sell them their units as co-ops for $2,500.
According to a legal ad in the New York Daily News dated Jan. 23, 2019, the city’s Department of Housing Preservation and Development (HPD) is expected to go forward in the near future with the sale of properties located at 32 Putnam Avenue, 34 Putnam Avenue, 550 DeKalb Avenue, 55 Carlton Avenue, 374-76 Prospect Place and 1216 Pacific Street.
The deal comes under HPD’s Affordable Neighborhood Cooperative Program (ANCP) program, in which the City selects qualified developers to rehabilitate distressed city-owned occupied multi-family properties.
Currently, tenants themselves manage the properties under the city’s Tenant Interim Lease (TIL) Program, which the city established since the 1970s and 80s, when the city was rife with slumlords and abandoned buildings. TIL is under HPD and has tenants paying rent to the Tenant Association. The funds are than used for building maintenance and now will form part of the future co-op building reserve fund.
The city chose Bridge Street as the developer from a list of qualified developers with a history of doing such work. Bridge Street will get a low-interest city subsidized loan to redevelop the properties. In the meantime they will start collecting rent from the current tenants and use that money to relocate them elsewhere – often at other Bridge Street managed properties – at their current rent as well as to pay some maintenance fees.
Bridge street will get 10% of the total city loan as a development management fee. Once redeveloped the tenants will move back in at a slight rent increase and have the opportunity to buy their unit for $2,500 as a co-op with some strings attached such as they cannot sell the co-op at market rates. They will also be responsible toward paying off the redevelopment loan as part of their monthly maintenance fee. However, they will get a partial or full property tax exemption for up to 40 years.
Under the terms of the deal, Bridge Street will continue as property managers for at least the first year. After that, the co-op board will choose the entity that will manage the property. Should the building ever default on maintenance fees, water and sewer costs or property taxes, Bridge Street is banned from taking control of the deed, but it could go into the hands of another non-profit.
According to the program’s details, shareholders will pay a minimum of 2% annual maintenance increase for the duration of the regulatory agreement (30 years). The monthly maintenance fee is structured to cover building operation expenses, pay down mortgage debt and put away money into reserves for future capital or operating needs.
While both the city and Bridge Street see the program as a way to provide low-and middle-income home ownership in the rapidly gentrifying city, at least one of the tenants involved isn’t so sure.
“We came here when the landlord wasn’t doing what he was supposed to be doing in 1998. Then the city came in with the TIL program and three women took it upon ourselves to manage the building,” said Tammy, a 35-year resident of one of the buildings, who refused to give her last name.
“We three fought drug dealers, arsonists, people tampering with the locks and people who decided to squat in the apartments. We cleaned house and some of us have now been here for generations. Now the city wants to come in and take it out from under us and allow Bridge Street to develop it for a dollar. Why not let us pay a dollar and give us the opportunity to renovate the building and still be property owners?”
Tammy said that Bridge Street doesn’t seem to be working in the best interest of the tenants. They say they will relocate us to another building while they redevelop this building, but there have been temporary relocation tenants in this building for over 10 years and now the city says we have to take them on permanently, she said.
Tammy also questioned how they will move her to another neighborhood while the one she currently lives in – that once had bursts of gunfire and drug dealers working the corner – now has condos across the street starting at several hundred thousand dollars.
“There is some slick footwork somewhere. It’s really hard to believe the city at their word. Look at how they run NYCHA. The city is the biggest slumlord in the city right now,” said Tammy.
“I think the tenants would be able to do the redevelopment. Ultimately to displace people already living in affordable housing to create affordable housing doesn’t make any sense at all. This way we will never be out from under a developer. They won’t let us rent out our vacant apartments at market rate and if something goes wrong with the taxes there will be another non-profit developer waiting in the wings,” she added.
A hearing on the sale of the six properties is slated 10 a. m., Feb. 13 at 1 Centre Street in Lower Manhattan.
