Tenants & Bank in Win-Win ANHD / HPD “First Look” DealFebruary 12, 2013 No Comments
ANHD’s “First Look” & HPD’s PCN – a Successful Model: An article in yesterday’s New York Times read here told the story of tenants on College Avenue in the Bronx who struggled for years with a landlord who would not make repairs or provide basic services. Bad landlords and long-suffering tenants are an old story in our city. What makes this case special is that the tenants were able to find a permanent solution by pushing out their bad landlord and bringing in the community-based non-profit developer, Banana Kelly CDC, to purchase their buildings. With the deal documents signed, the building went from being an unstable community problem to a long-term community asset.
Community organizers from CASA/New Settlement Apartments worked with the tenants, and the City Department of Housing Preservation and Development and their Preserving City Neighborhoods (PCN) program deserve great, great credit for their hard work commitment to a complicated deal.
New York Community Bank also gets a lot of credit for making this deal happen and for participating in the ANHD-developed First Look Program that made this story possible.
Since the start of the economic crisis, ANHD has been very concerned that overleveraged apartment buildings – in trouble because they were bought by developers who were speculating that they quickly (and often illegally) raise the regulated rents or hold operating costs artificially low – were being sold by the banks who held the mortgages to a new round of speculative developers who were doubling-down on the strategy.
Starting two years ago, and after a lot of public fighting, ANHD and our allies began approaching local banks to ask them to consider an alternative approach. Instead of struggling with the community in building after building, we asked the banks to consider agreeing to ANHD’s First Look Program in which the bank would give a community-minded developer recommended by ANHD and HPD an early and exclusive opportunity to buy foreclosed rent stabilized apartment buildings or the distressed mortgages on those buildings. In return for the First Look opportunity, ANHD and our groups promised an orderly process that is sensitive to the private-market timetable that the banks need.
Three major lenders have already agreed to participate in an ongoing First Look program, and hundreds of at-risk affordable housing units have been refinanced with community-minded developers and saved. ANHD believes that this program – brought to scale with an expanded HPD/PCN infrastructure – can be an important new source of stable, decent, affordable housing for our city.new blog posts