Tenants ask city to aid in rescue of troubled apartments

City Council members and tenants rallied Tuesday on the steps of City Hall against the owners of 42 buildings, with an unlikely proposition: they want the buildings to go into foreclosure.

The apartments — which have accumulated thousands of housing code violations for conditions that include frigid temperatures and leaking pipes — are owned by a consortium of private equity investors who are delinquent on a $133 million mortgage. They are now seeking to refinance the properties.

“We’re calling on the Department of Housing Preservation and Development to join us in holding the lender accountable,” said Bronx Councilmember Ritchie Torres, the recently appointed chair of the council’s public housing committee.

He was referring to LNR Property, a firm that manages the buildings’ mortgage and could help decide the buildings’ fate.

Torres said he is drafting legislation that would require HPD to maintain a watch list of what he called “predatory owners,” who invest in rent-stabilized apartments with the intention of profiting from turning over apartments to higher-paying tenants.

Another way to exert influence, Torres said, is for HPD to publicly “shame” the owners of these buildings.

Councilmembers Ritchie Torres (r) and Brad Lander joined tenants on the steps of City Hall to call for city action in face of a massive apartment-building foreclosure.

Councilmembers Ritchie Torres (r) and Brad Lander joined tenants on the steps of City Hall to call for city action in face of a massive apartment-building foreclosure.

Torres was joined by council members Brad Lander, Inez Barron and Antonio Reynoso of Brooklyn and Helen Rosenthal of Manhattan.

The buildings, whose owners include Normandy Real Estate, Vantage Properties, Westbrook Partners and David Kramer, have for years been on the radar of housing advocates, who warned that the owners would not be able to recover their purchase costs with income from rent paid by low-income tenants and government programs.

The portfolio was featured in a 2009 report on so-called predatory equity by the Association for Neighborhood and Housing Development.

The Urban Homesteading Assistance Board, which has helped negotiate on behalf of tenants in past apartment building foreclosures, has sought to get the city to crack down on the owners for illegal conditions in the buildings.

“We have been in contact with HPD,” said Kerri White, a tenant organizer at UHAB, “but we haven’t gotten a solid answer at this time.”

HPD does not officially have a say in who becomes the new owner of these buildings if foreclosure does proceed. But tenants hope that recent history inspires the de Blasio administration to drive a hard bargain with the lender, WBCMT 2007-C33 NY Living. In 2009, HPD successfully pressed Fannie Mae and Deutsche Bank, which held the debt on 14 decrepit Bronx buildings, to sell the mortgage at a discount to a bidder approved by HPD, effectively transferring ownership.

“What we need from them,” White said of HPD, “is leadership.”

HPD did not respond to multiple requests for comment.

In the view of tenants, organizers and Torres, a refinancing of the mortgage would be the “worst-case scenario.”

An agreement with the lender owners gives the owners until April 2 to find a new source of funding and halt foreclosure proceedings.

“We’re all standing here,” Torres said, “because we refuse to remain silent. We’re here to speak up, speak out and take action. We’re asking HPD to do the same.”

Data Tools


Our work has appeared in…

About TNYW

The New York World focuses on producing data-driven investigative projects.