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'Setup for Failure': Tenants and Officials Blast City's Rent-to-Own Program

By Dartunorro Clark | April 28, 2017 5:05pm | Updated on May 1, 2017 8:50am
 Anne-Marie Hendrickson, (second from right) deputy commissioner of HPD, and other HPD officials testified at an oversight hearing on the TIL program.
Anne-Marie Hendrickson, (second from right) deputy commissioner of HPD, and other HPD officials testified at an oversight hearing on the TIL program.
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DNAinfo/Dartunorro Clark

NEW YORK CITY — City officials offered a mea culpa regarding a longtime rent-to-own program that has been labeled a failure by tenants — admitting that the program became “unsustainable” after its launch nearly 40 years ago.

Officials from the Department of Housing Preservation and Development were put in the hot seat Thursday at a marathon City Council oversight hearing to answer questions related to the beleaguered city housing program that is currently under investigation.

Officials from HPD offered some concessions and promised reforms related to the 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.

“The TIL portfolio of buildings has faced challenges since its inception. Although the 950 cooperatives created through the program include many success stories, the program’s overall narrative is a difficult one,” said HPD Deputy Commissioner Anne-Marie Hendrickson in her prepared remarks.

“It’s important that we provide reassurance to these residents, who have rightfully earned their chance to be homeowners.”

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

The city is planning to move a number of the 148 TIL buildings into a newly created program called the Affordable Neighborhood Cooperative Program (ANCP), a similar rent-to-own option that brings developers in to rehabilitate properties and convert them to co-ops using city-backed loans, private loans and state grants instead of taxpayer dollars.

Under the new program, apartments would be renovated at a cost of $300,000 per unit. Residents would be responsible for paying that amount down in addition to their rent and maintenance fees over a 30-year period — which many see as a mortgage placed on buildings that are supposed to act as co-ops.

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

Other buildings could opt for the Multifamily Preservation Loan Program (MPLP), an option that caps rents at 30 percent of a tenant’s income.

Hendrickson said the department was prepared to adjust the ANCP and MPLP programs “to match the community’s needs.”

This includes covering the fuel costs of all buildings still in the TIL program as soon as “the next few days," allowing the tenant associations to save up to $24,000 a year, she said.

Hendrickson also said the department would help tenants cover the cost of the $2,500 needed to purchase their apartment under the ANCP program, without offering a specific amount.

Nonetheless, tenants balked at the idea of adding private debt and developers into the mix through the ANCP program and called on the city to deliver on its initial agreement. 

Tenants and advocates have labeled the TIL program a “failure,” noting that many buildings have sat languishing and fallen into disrepair as residents waited several years — and in some cases decades — to buy them. Others who were promised repairs have been displaced from their buildings for several years. 

The Department of Investigation is currently probing the program over a host of allegations, and this week Public Advocate Letitia called for an independent review of TIL.

More than 100 people packed the hearing Thursday, with dozens testifying about the conditions of their buildings, as well as urging the City Council to investigate and halt the transition to the new programs.

“We’re not asking for anything special,” said Harlem tenant Devon Rivens. “Just what we were promised from HPD.”

Another tenant, who declined to give her name, said she’s lived in a Harlem building that has been in the pipeline for the program since 1987. During that time, she gave birth to newborn twins, both of whom are now in their 30s, she added.

“There should be a proper investigation,” she said, noting that her building has languished with a number of vacant units and is in desperate needs of repairs. 

“There are no checks and balances. We were sitting here, 20 years, 30 years, as evidence of criminal activity," she continued, saying she's afraid she’ll die waiting to own her apartment and that her children may not be guaranteed succession rights.

“It was a setup for failure. I’d be dead before they fix this problem. The stress could kill you.”

Elsia Vasquez, president of P.A'L.A.N.T.E Harlem, which has been the agency’s most vocal critic, called for the Council to issue a one-year moratorium on the ANCP program to give the department time to follow through with the TIL program's promises.

“If you guys can’t help, we’re going to be in court suing everybody,” she said.

Council members on the committee grilled the department on TIL's problems, questioning how the new programs would remedy the situation.  

Councilman Mark Levine questioned why the department has allowed nearly 900 apartments in TIL buildings to sit vacant for years.

“This is a tremendous loss for housing in this city, which is suffering from a desperate need for affordable housing,” he said.

HPD reps said they “model risk” related to funding and suggested they are prepared to handle any cuts in federal funding.  

Council members also raised questions about the Department of Investigations probe, which reportedly includes issues ranging from stolen money to city employees slacking off.

“If it is true, someone has to go to jail. This is the money of hardworking men and women,” Levine said.

“I agree,” Hendrickson replied.