Bronx Tenants On Verge of Buying Their Apartments for $2,500 Each
A group of Bronx tenants who banded together to fight rent increases proposed by a new landlord are nearing the end of a city-backed process to buy the building from him and sell themselves their living spaces for just $2,500 each.
It took more than five years of work, help from an affordable housing nonprofit, an old city program and an assist from the pandemic for the tenants to gain control of their own real estate destiny, the New York Times reported.
Their journey started back when James Giddings bought the 21-unit building in Port Morris and told tenants they should expect rents to rise. Tenants soon gathered to see what they could do to prevent that.
They eventually settled on a plan to use a city program to create a Housing Development Fund Corporation, a 1980s-era scheme that allows residents to take control of and shore up buildings abandoned by their landlords.
The goal was to use funds from either the city or a nonprofit to buy the building and create a tenant-run cooperative to manage it.
Tenants who lived in the building during the process could then buy shares in the cooperative that would secure their space for $2,500 each. They would then be able to live there rent-free while paying typical monthly upkeep charges, and are allowed to sell the homes. Apartments that were vacant at the time of the incorporation could then be sold for a below-market price agreed upon by the city.
But getting to that point took some time — and the pandemic’s eviction moratoriums and housing court slowdown put the tenants in a better position to succeed.
With court cases against tenants for nonpayment of rent on hold, a separate case to determine if the building was rent-regulated delayed for a year, and other potential buyers fearful of taking on a property that was tied up in litigation, Giddings decided to hear the tenants out on their offer to buy.
The money to purchase the building came thanks to a low-interest bridge loan from a donor close to the Urban Homesteading Assistance Board, a nonprofit that supports HDFCs. In the end, Giddings agreed in February to sell for $2.6 million to the tenants.
For the co-op to be created, 80 percent of the tenants need to take 12 hours of training to learn how to run it. The assistance board will also seek a tax exemption for the property, which is crucial in order to keep the costs of the apartments below market.
If the process is successful, the building will become one of just 11 rental buildings converted to an HDFC in the past five years, and the first ever to use solely private funds to make the purchase.
[NYT] — Vince DiMiceli