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City's Rent-to-Own Program a 'Disaster' as Investigations Loom, Source Says

By Dartunorro Clark | April 26, 2017 4:55pm
 The public advocate called for a
The public advocate called for a "top-to-bottom" independent review of the beleaguered program. 
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DNAinfo/Rosa Goldensohn

NEW YORK CITY — A city-backed housing program that advocates say has not delivered on its promise of offering tenants apartments for next to nothing is coming under intense scrutiny from investigators and the city's public advocate.

The Tenant Interim Lease program (TIL), which was meant to be a pathway for renters in city-owned buildings to purchase their units for just $250, is currently being probed by the Department of Investigation for issues ranging from stolen money to city employees slacking off, sources and reports said. 

Now, Public Advocate Letitia James is calling for an independent review of the program, which she said has been inadequately funded and poorly managed by the city’s Department of Housing Preservation and Development.

“As our city faces a crisis in affordable housing, it is shocking that a city-run program is allowing hundreds of affordable units to remain vacant,” James said, noting that roughly 40 percent of the more than 2,300 units in TIL buildings are empty.

Tenants and advocates have labeled the program a “failure,” noting that many buildings have fallen into disrepair while residents have waited years to buy them.

The public advocate's criticism of the program has been laid out in a policy brief expected to be released Thursday, as the City Council's Committee on Housing and Buildings conducts an oversight hearing on the program.

The brief states that the program is “rife with corruption” and that HPD “has not adequately performed their jobs, because they were frequently unavailable or unreliable, inadequately trained or inexperienced, or failed to follow-up on critical matters.”

It also comes amid the DOI investigation, which has been ongoing for more than a year, the New York Post reported.

The probe reportedly includes investigating money stolen from a tenant association by residents, tenants allowing squatters to live rent-free and HPD employees slacking off. 

The DOI would not confirm the investigation and declined to comment further, a spokeswoman said. 

A former HPD employee, who spoke to DNAinfo New York on the condition of anonymity, characterized the agency as incompetent and called the unit overseeing the TIL program a “freaking disaster zone.”

“The biggest and only reason why the unit is a failure is the staff. The whole unit in itself needs a complete overhaul… everyone needs to go,” the former employee said.

“You wonder why HPD is considered the slumlord of the city because tenants don’t want to deal with them."

The city has proposed moving many tenants in the TIL program to HPD's Affordable Neighborhood Cooperative Program (ANCP), a similar rent-to-own option that brings developers in to rehab properties and convert them to co-ops using city-backed loans, private loans and state grants instead of taxpayer dollars.

Housing advocates fear 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 approximately 60 percent of the area median income.

James called on the city to postpone moving buildings into the program until the department meets its initial obligations to tenants.  

“[T]he solution proposed by the administration is ill-conceived and short-sighted," she said. "We must instead conduct a thorough, top to bottom review of the TIL program to fully commit to the goal of ensuring that every New Yorker has a safe and affordable home."

HPD said the agency is committed to making sure the ANCP program is “affordable, successful and sustainable."

“Learning from the challenges of the past, the Affordable Neighborhood Cooperative Program was designed to infuse additional funding for TIL buildings, accelerate the timeline for construction, and ensure the buildings and the tenants are set up for long-term success,” an HPD spokeswoman said.

“HPD has also introduced a new model to ensure we are partnering with tenant associations and engaging TIL residents at every step of the process so they can fulfill their long-awaited dream: owning a safe, quality affordable home.”