Photo by David Cruz
A city program that takes away distressed homes from owners is doing more harm than good, robbing its owners of its home valued at millions of dollars in market assets, according to an investigation by the New York City Council. And their findings have found the Bronx is among those hardest hit.
“Our investigation found that out of 420 properties, 210 of them had no financial distress. The legal standard for financial distress is a 15 percent lien-to-value ratio, those 210 properties on average had a 3 percent lien-to-value ratio,” said Councilman Ritchie Torres at a news conference outlining his findings on the controversial Third Party Transfer program (TPT) on July 26. “Furthermore, our investigation found that out of 410 properties in Round 10 of TPT, 155 of them had neither financial nor physical distress.”
Torres, chair of the New York City Council’s Oversight Committee, held a hearing on the program on July 22, sharing the committee’s findings with the city Housing Preservation and Development (HPD) agency, which created the program in 1996.
For the last 23 years, HPD has taken over single- and multi-family homes, which include co-ops that fall under the Housing Development Fund Corporations (HDFC) cooperative program, if they find them to be distressed or severely behind on their water or property taxes. Usually, the seized properties are taken by non-profit organizations, as has been the case these last six months. Nonprofits can ultimately flip the properties and sell them once the terms of their arrangement with HPD have been satisfied, effectively making them the beneficiary to someone else’s wealth. Torres noted that the total value of each of these seized homes, which will likely not be given back to homeowners, is $152 million.
The program ensures that qualified sponsors will be able to take over distressed properties and convert them into affordable housing. However, some of the properties recently selected to be seized are not at fault and have been “targeted,” according to the investigation.
While Torres believes that the TPT program is problematic, he doesn’t want to see its complete undoing. “We are committed to a comprehensive reform of the TPT program so that the focus is not on (HDFC’s), but on genuinely abandoned properties that have been neglected by slumlords and absentee landlords,” said Torres.
Along with not falling under the category of distress, Torres and his committee are arguing “racial and geographic disparities,” within HPD’s selection. Among the 420 properties selected, 192 were found in Brooklyn, 132 in the Bronx, 86 in Manhattan, 10 in Queens, and zero in Staten Island.
“When we do the selection, we are not looking at racial data. All we are looking at is how much money is owed to the city. When you map these properties in these areas, these are properties that have high foreclosure risks, the highest numbers of notices of foreclosure, and suffered greatly in 2008 from the mortgage crisis,” said HPD Commissioner Louise Carroll in response to these claims at the July 22 hearing.” The law then says once you have identified properties that owe the city the most money, then you have to pick up everything on the block. That was our process.”
Carroll is stressing the amount of debt buildings owe toward the city as the reasoning. Not all of the 420 properties could owe an outrageous amount of money to the city and most are not in terrible shape, but they are held liable because the neighboring buildings in their respective communities are behind on taxes.
For at least one group of homeowners in the Bronx, understanding the TPT program started as a small notice slipped under their doors in 2017. Isabel Adon has lived at 1600 Nelson Ave., a cooperative in the Highbridge section of the Bronx for over 40 years. She held back tears as she spoke during the conference on July 26.
She recalled the day she received the notice from the HPD. “On Sept. 5, 2018, it was a Saturday, there was a flyer in my building that said your building has been transferred, the new owner is neighborhood restore. You are no longer a shareholder, you are now becoming a tenant as of this day,” said Adon, adding “our building is not in distress.”
“I will ask anyone from HPD, including Ms. Louise Carroll to come to our building and see the conditions in which our building is in,” said Adon.
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Welcome to the Norwood News, a bi-weekly community newspaper that primarily serves the northwest Bronx communities of Norwood, Bedford Park, Fordham and University Heights. Through our Breaking Bronx blog, we focus on news and information for those neighborhoods, but aim to cover as much Bronx-related news as possible. Founded in 1988 by Mosholu Preservation Corporation, a not-for-profit affiliate of Montefiore Medical Center, the Norwood News began as a monthly and grew to a bi-weekly in 1994. In September 2003 the paper expanded to cover University Heights and now covers all the neighborhoods of Community District 7. The Norwood News exists to foster communication among citizens and organizations and to be a tool for neighborhood development efforts. The Norwood News runs the Bronx Youth Journalism Heard, a journalism training program for Bronx high school students. As you navigate this website, please let us know if you discover any glitches or if you have any suggestions. We’d love to hear from you. You can send e-mails to norwoodnews@norwoodnews.org or call us anytime (718) 324-4998.
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I am an HDFC shareholder, and this is terrifying. How on earth can it be legal for HPD to seize a property simply because its neighbor, or a building down the block, is delinquent?? And openly admit it??? And under the guise of providing affordable housing, which the seized buildings already were doing.
Please follow the money trail. More than likely, the developers that inherit these buildings contribute to deBlasio’s campaigns.
The TPT program needs to be abolished in favor of a more transparent, legal, and fair process, versus one in which the city is jury, judge, and executioner.
Having failed in his end run to abolish the NYS PHFL and take back HDFCs, the mayor now turns to TPT. Please, mayor, explain why your administration continues to target HDFCs which are simply existing and providing affordable housing per the agreements established long ago between the shareholders and the city. HPD drafted and signed all HDFC conversion agreements and was happy to establish permanent affordable housing, collect property taxes, and get the headaches and cost of managing and maintaining those properties off the city’s books. That the city now wants the properties back would be laughable if it were not so tragic.
For a mayor who purports to care about his constituents’ mental health (so much so that he put his wife in charge of the city’s mental health care initiatives), it is perplexing that he then is the direct cause of anxiety among the tens of thousands of HDFC shareholders and their families who are doing the right thing and exactly what the city asked them to do but who could at any minute lose their life savings and their homes via a slip of paper under the door from a TPT zealot. Make no mistake, despite his “progressive” claims, deBlasio is happy to step on low and middle income families in his attempted climb to the top.
Torres is right to criticize the TPT program but wrong to claim racial and ethnic disparities. Staten Island is more well-off than Brooklyn, Queens and the Bronx. SI homes tend to be newer and there are fewer multi-family homes on SI compared to Bk, Bx and Qns.. Those three factors explain the lack of SI seizures.
Torres and the city council need to eliminate the entire TPT program. It’s an illegal taking of private property and I hope that those whose property was stolen by NYC file suit in federal court. I’m sure the SI council delegation, S. Matteo, J. Borelli and D. Rose, will gladly join CM Torres in voting to eliminate TPT.
Get it correct: it is the Third Party THEFT (TPT) Program.
While I do appreciate the work of Councilmember Torres thus far, I must suggest he get NAMES of people and organizations that are or were involved in the TPT. So far all we are told is “its the City” that did it.