HAMILTON HEIGHTS — For six years Ralph Padron has seen the tenants association of the city-owned building where he lives lose money despite the fact that retailers want to rent out the ground-floor commercial space.
At one point, Dunkin Donuts offered to pay $50,000 to renovate the space and $5,000 a month in rent with a 10-year lease, according to a copy of the agreement.
The rent alone would have nearly doubled the association's revenue, but the city scared the retailer off by asking for a month-to-month lease, Padron said.
“Our building’s funds are drying up,” he said of 161 W. 108th St.
“Everything they do is counterproductive. It’s been vacant for six years now and we are running out of money.”
The building, owned by the Department of Housing Preservation and Development, is one of more than 150 in its Tenant Interim Lease program, which is meant to be a pathway for renters in city-owned buildings to become homeowners.
Tenants essentially lease the building from the city while paying below-market rent, in some cases as low as $300 a month. Tenant associations collect rent, submit financial reports, take care of basic maintenance and, eventually, the city converts the spaces into co-ops in which they can buy units for $2,500, according to HPD.
But the program is underfunded citywide. Many of the buildings are falling into disrepair and tenants can wait years before they become co-ops, according to Councilman Mark Levine.
“At the end of the day the city has not been adequately funding TIL buildings for decades,” said Levine.
“You have faced challenges on every front. Many of you have waited years — in some cases decades — for your buildings to receive badly needed repairs. The city owes you better.”
The councilman held a town hall meeting Aug. 26 where about 100 tenants gathered to ask questions of city representatives. Many of them came with signs that read, "HPD's delaying tactics: DEFUNCT," and "Where are the funds to rehab decaying TIL buildings?"
According to HPD, the length of time it takes for a TIL building to be converted into a co-op is too varied to provide an accurate average time. Each building has a unique set of issues including compliance status, occupancy levels, developer selection and market conditions that are too complex to generalize for the program as a whole.
The agency would not provide time tables for when specific buildings will be converted into co-ops.
This summer, HPD initiated a “Compliance Protocol” to make sure the building associations are following the agreement. Tenants have until November to address non-compliance issues or risk losing their shot at becoming homeowners after a six-month "Corrective Action" period, according to HPD.
Questions at the town hall ranged from why the buildings haven’t been fixed to how long until they become co-ops to why they can’t rent vacant units.
At 2488 Seventh Ave., 14 of the building’s 22 units are vacant. Without the rent income, the building is losing money and cannot fund basic repairs, said resident Charles Regular, 69.
“HPD doesn’t allow us to rent the apartments,” he said.
The city said keeping the units vacant is a long-term strategy.
The units — both commercial and residential — need to stay vacant because once the buildings become co-ops they will be sold at a market rate to subsidize the bank debt from the renovation, according to HPD.
“If you put people in there now, you are not going to be able to maximize the revenue,” said Anne-Marie Hendrickson, deputy commissioner for the office of Asset & Property Management.
“The reason we don’t want to rent out vacancies while they are in TIL is because those vacancies are going to be needed on the back-end to be sold at higher prices to subsidize and pay the bank debt.”
When it comes to commercial spaces, the city opts for month-to-month leases to ensure a building is ready for renovation at any given time, according to HPD. But Padron, who has been waiting for his building to be converted for more than a decade, says the policy sets them up to fail.
“It’s like the right hand doesn’t know what the left hand is doing,” he said.
Tenants who have been waiting decades to have their buildings renovated say not having money now is preventing them from maintaining their building. Many of the residents are senior citizens and the longer they wait, the fewer of them there are.
“People are dying and more units are becoming vacant,” said Luisa Rodriguez of 615 W. 150th St. “One of the most frustrating things is not knowing where we are on the list.”
Rodriguez was moved out of her TIL building while part of it was renovated, forcing the arthritic 76-year-old to climb up four flights of stairs of her new building since 2008, she said.
“We have been very patient,” she added.