PROSPECT-LEFFERTS GARDENS — For years, the city’s public advocate has publicly shamed the city’s “worst landlords,” — and now, the office is calling out banks that finance them, too.
Public Advocate Letitia James published a list Tuesday of banks who have loaned the most money to those on the “Worst Landlords” list, urging them to consider the “unconscionable” actions of those they finance, or face the wrath of “the people,” she said.
“Shame works,” she said at a press conference outside 101 Lincoln Road, a Prospect-Lefferts Gardens rental with many rent-stabilized tenants who said they have put up with deteriorating conditions in the building for years.
“Banks should not be doing business with individuals who ignore city policies and put New Yorkers in harm’s way,” James said.
According to the public advocate’s research, JPMorgan Chase — which finances 101 Lincoln Road — has provided approximately $20 million in mortgages held by those on the “Worst Landlords” list, compiled to show owners of properties with the most building violations and complaints in the city.
But the famed investment bank is not the worst offender; Signature Bank, a commercial bank which operates in the five boroughs and New York’s suburbs, topped the list with approximately $130 million in 58 loans on the “Worst Landlords” list, James’ office found.
Signature Bank spokeswoman Susan Lewis emphasized the $130 million is just 2.3 percent of the bank's total portfolio, 77 percent of which funds housing in low- to moderate-income neighborhoods.
"Signature Bank will always focus on improving and ensuring the quality of housing in the buildings it finances. The bank regularly reviews the integrity and character of its borrowers," she said in a statement, adding that Signature encourages borrowers to remedy conditions at "sub-standard" properties and considers barring future lending if that person is "unresponsive to concerns."
Housing advocates who support James’ effort say they hope the new bank list will not just raise awareness about who funds violation-laden properties, but will result in financial institutions making changes to their lending practices, including taking the landlord’s violations, a building’s conditions and harassment by owners into account before loaning money.
In addition, Jamie Weisberg of the Association for Neighborhood and Housing Development said she hopes to see a particularly egregious bank practice disappear: using future property revenue — i.e. higher, often market-rate rental prices in a given building — to evaluate the value of a building, instead of existing tenants’ rental prices.
“Access to credit is critical for maintaining our housing stock, but only if it’s done responsibly,” she said.
Already, one of the banks on the list, New York Community Bank, has recently committed to “a very strong set” of responsible multi-family lending, Weisberg said, and ANHD is in talks with Signature Bank, as well, to develop similar practices.
But James wants to see more financial institutions improve the ways they lend to landlords.
“I urge all the banks to do the right thing and to check the Worst Landlords List … to check all the violations and to work with tenants and engage tenants before you offer loans,” she said.
A spokeswoman for JPMorgan Chase declined to comment on the public advocate's list. New York Community Bank did not immediately respond for comment.
To see the public advocate's full report, click here.