Probe fishy bldg. deals, says Adams
A city program to move multi-family buildings drowning in debt and disrepair to a selected developer should be investigated for possible fraud, Brooklyn Borough President Eric Adams said Sunday.
Citing an increase in constituent complaints, Adams wants the state attorney general to probe the city’s Department of Housing Preservation and Development’s Third Party Transfer program.
“Through extensive discussions with community stakeholders we have become aware that there appears to be deeper, and possibly illegal, actions undertaken to defraud homeowners of their property,” Adams and City Councilman Robert Corngey wrote to the AG’s office on Nov. 19.
Under the program, city officials, as a last step, can select the developer, who pays $1 for the property and $8,750 per unit excluding the super’s apartment. In return, the developer must make the necessary repairs and promise to keep the units affordable.
Housing officials say they only move to foreclose on properties that are in serious disrepair and facing major water bills and real estate debt.
All told, Housing Preservation has transferred 74 co-ops since 1997 as of this summer, according to city records.
But Adams, and other local officials, question the city’s ongoing efforts to foreclose more co-ops deep in hock.
The city is in the process of moving forward on the transfer of 63 properties in the Bronx, Brooklyn and Queens. Those properties are slated to be given to Neighborhood Restore, a housing nonprofit.
Adams, a former NYPD captain, said figuring out what’s going on is “larger than my bandwidth as borough president.
“There needs to be an extensive review of what’s happening with the removal of properties,” he said. “I think there’s some kind of concerted effort going on of removing these properties.” HPD defended the program. Third Party Transfer “is one of the stro-ngest tools we have to improve living conditions for existing residents while also guaranteeing their rights to remain in their homes as rent stabilized tenants,” said housing spokesman Matthew Creegan.
“While there is a lot of misinformation circulating about this program, it has proven to be very effective at incentivizing properties with severe operational, financial, and physical issues to improve their situation,” he said.
Building owners have years to pay back taxes and make repairs before a forced city transfer.
It typically takes at least three years before the city actually moves to change property ownership as a last-case scenario.
HPD officials say that approximately 76% of the buildings on a recent foreclosure list were able to “correct their issues” by paying off old bills or entering payment agreements.