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City's Rent-to-Own Program Called a 'Failure' as Tenants Wait Years to Buy

By Dartunorro Clark | February 28, 2017 10:58am
 Elsia Vasquez, president of PA'LANTE Harlem, stands with tenants demanding HPD keep its promise to rehab their TIL buildings and allow them to buy their apartments for $250.
Elsia Vasquez, president of PA'LANTE Harlem, stands with tenants demanding HPD keep its promise to rehab their TIL buildings and allow them to buy their apartments for $250.
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DNAinfo/Dartunorro Clark

WEST HARLEM — Luisa Rodriguez moved out of her West 150th Street apartment temporarily in 2008 after the city promised to make crucial repairs on the unit and then let her buy it for next to nothing under a city-sponsored program.

However, eight years later — at age 75 — she said she has yet to see that plan come to fruition under a rent-to-own program advocates claim has failed to deliver on its mission.

The building at 615 W. 150th St., owned by the Department of Housing Preservation and Development, is currently part of the city’s Tenant Interim Lease (TIL) program, which was meant to be a pathway for renters in city-owned buildings to purchase their units for just $250.

But residents under the current program claim HPD didn't follow through on its promise, failing to do repairs and then sell the units back at a rock-bottom price, which initially attracted many to the program.  

“I was one of the first ones to move out,” said Rodriguez, adding that was nearly nine years ago. “They don’t care about us.”

Now, Rodriguez’s building and all 156 others in the TIL program are set to transition to HPD's Affordable Neighborhood Cooperative Program (ANCP), a similar rent-to-own option that brings developers in to rehab the properties and convert them to co-ops using city-backed loans, private loans and state grants instead of taxpayer dollars.

Housing advocates say the move into ANCP could significantly limit tenant control over their buildings by introducing developers into the mix, raising rents and maintenance costs to unaffordable levels for low-income residents.

Under ANCP, residents would have to pony up $2,500 instead of $250 to buy their units, and HPD estimates monthly maintenance costs could amount to about 60 percent of the area median income.

HPD said it has a specific pot of cash from the U.S. Department of Housing and Urban Development to allocate Section 8 funds to lower the residents' costs, but some fear the funds are not guaranteed because of threats from President Donald Trump to cut federal aid from the city.

Under ANCP, residents would again be temporarily displaced while the building undergoes repairs before residents move back in and begin the co-op conversion process.

Construction costs would be roughly $340,000 per unit in the 60-unit West 150th Street building, bringing the preliminary estimate for the property to about $20 million, according to HPD. 

New York-based nonprofit CLOTH, or Community League of The Heights, has been selected as the developer. However, HPD has yet to finalize a budget.

The costs would primarily be covered by a loan, and residents would be responsible for paying it down in addition to their rent and maintenance fees over a 30-year period — which many see as a mortgage placed on a building that’s supposed to be a co-op.

In order for residents to eventually own their units, they would have to meet three requirements: Eighty percent of tenants would have agree to purchase shares, take training classes and be current on their rent, according to HPD.

Carmen Pena, vice president of 615 W. 150th Street, said tenants have been scraping the bottom of the barrel for years to keep the building afloat and many do not want the ANCP proposal.

Since 2008, 21 apartments have remained vacant because HPD has not allowed them to be rented. Under the TIL program, the rent payments go back into the buildings to cover general maintenance and repair costs. They have also footed the bill for emergency repairs.

“We are losing money,” Pena said.

Monthly rents in the building currently range from roughly $192 to $495, which is enough to pay for the maintenance of leaky roofs, the boiler and other repairs in the apartments, some of which have structural issues. HPD is supposed to step in and make the major repairs, Pena said.

“A lot of apartments are in very bad condition,” she said.

Pena said many tenants in the 60-unit building, which entered the TIL program in 1996, are seniors and have limited incomes.

“Go back to the plan they promised,” she said, referring to the deal permitting residents to buy their units for $250 and rely on HPD for building repairs. 

Pena and Rodriguez joined dozens of TIL tenants and housing advocates at a rally Sunday blasting the city for its “unfulfilled commitments” to those residents.

P.A'L.A.N.T.E Harlem, a tenants’ rights group, organized the rally with various TIL building tenant associations.

“We know this is a big fight, but we are going to win,” said Elsia Vasquez, the organization’s president.

Prominent civil-rights attorney Norman Siegel worked with P.A'L.A.N.T.E to issue a 50-page report titled, “Broken Promise: New York City’s Tenant Interim Lease Program and Those Left Behind.”

Siegel said the city “failed” to provide the necessary resources to TIL buildings, blocking the path to homeownership for tenants in the program.

“There are certain basic commitments the government makes to its people, not just the rich folks, not just the middle-income people, but to everyone including low-income people,” he said.

“For too, too many the promise was never fulfilled. For too, too many your dreams have been, at best, deferred and, for some, it has been a nightmare. It does not have to be this way. You deserve better. In fact, you deserve what you were promised.”

Cal Snyder, who helped compile the report, said ANCP is not a “natural continuation” of the TIL program.

“It is a program that enriches others at your expense,” he said. “What HPD is setting you up for is failure… there is no tooth fairy that is going to come down from the sky.”

HPD, however, said it will “do right” by the residents.  

“We will ensure residents of this building are on a financially secure path to homeownership,” spokeswoman Juliet Pierre-Antoine said.

“Long overdue rehabilitation work at the building will be completed by a quality not-for-profit, and the homes transferred to residents for just $2,500. We recognize the concern of these future homeowners, but we have confidence this path will do right by them.”