LOWER MANHATTAN — After a long and contentious debate, residents of affordable housing complex Southbridge Towers have voted to take their apartments private.
More than two-thirds of those living in Southbridge — a 1,607-unit complex of several towers that sits between Pearl, Frankfort, Gold and Fulton streets — cast ballots over the past three days to turn their subsidized co-op into market-rate apartments, a decision that will likely allow residents to sell their units for upwards of $1 million.
The 1,082 “yes” votes — 10 more ballots than the required two-thirds margin for privatization — came after a lengthy, heated and complicated debate at the complex.
The change will enable residents who paid $10,000 or less for their apartments decades ago to sell them at market rate, reaping a large profit.
“I think this is going to have a tremendously positive impact on this community,” said Wally Dimson, the president of Southbridge’s board of directors. “Privatization significantly increases residents' net worth, for many people who have never had this kind of financial security.”
Other Southbridge residents, however, contended that going private would remove a source of affordable housing in the city that could serve future generations. They also feared that the risks of privatization, like a potential increase in maintenance fees, could outweigh the benefits.
“This did not go the way we wanted this to go,” said Paul Hovitz, a longtime resident of Southbridge. “It’s been a hard-fought battle, trying to keep affordable housing in the neighborhood.”
Hovitz said he is consulting with a lawyer about next steps to object to the vote. The majority of votes were cast in person, on electronic ballot machines, but some were “proxy” votes, in which residents submitted signed paper ballots in advance of the final vote. He wants to make sure those votes were counted properly, and each signature was verified.
At this point, moving forward with the privatization still requires one more step. Two-thirds of residents will have to sign an agreement to “opt in” to the privatization. They will soon receive the agreement and will have 90 days to sign, Dimson said. Residents can choose to “opt out” of the plan, which will essentially make them renters, who do not have the ability to sell their apartment. Rents will be below market rate, but can increase up to 5 percent each year.
The dense 900-page privatization offering plan was given to residents in April, nearly eight years after residents had voted to allow a feasibility study on the issue.
The vote, originally scheduled for June, had been pushed back to September, to give residents more time to study the offering plan.