File image of New York City (Source: Pixabay)
NEW YORK — On a sunny afternoon in the spring of 2017, a dozen tenants from a small Bronx apartment building met at a trendy Port Morris neighbourhood bar with exposed brick walls, craft beer and funky cocktails. One of the tenants had slipped flyers under her neighbour’s doors a few days earlier, calling for the weekend meeting.
Shoving two high-top tables together, and ordering sliders and wings, they huddled, trying to figure out how to deal with a new landlord who’d come in with big plans to raise rents after buying the building for $4 million. The group took the first step in a five-year journey that would end with the landlord gone and the tenants poised to own their 21-unit building.
A non-profit organization paid the landlord $2.6 million for the property in February and plans to eventually hand it over to the tenants, who will be able to buy their apartments for $2,500 each. Over the past five years, only 11 rental buildings have converted to this type of limited equity co-op, called a Housing Development Fund Corporation co-op, where tenants buy their apartments at prices set by the city and can sell them for a limited profit.
In this case, the tenants made the deal happen without any funding from New York City, an even rarer victory. There are roughly 1,100 HDFC co-ops in the city, most converted decades ago, according to the city’s Department of Housing Preservation and Development. That’s out of about 7,100 co-ops citywide, according to Ariel Property Advisors, a commercial real estate brokerage.
On the cusp of becoming homeowners, the tenants’ feat comes at a time when rents are spiralling and speculative development is rampant in South Bronx neighbourhoods like Port Morris. They navigated a long and complicated legal case, staving off multiple attempts by the landlord to evict them.
Usually, a successful tenant association is a homogeneous group, led by neighbours from similar backgrounds. The tenants of 700 E. 134th St. are a motley crew, a recipe that often splinters under pressure. A few tenants were formerly homeless. Others were unemployed. Those with jobs — a chef, a photographer, a nurse, a metal fabricator, a substitute teacher and a digital printer, among them — had steady yet modest incomes. But they shared common ground in the struggle against high rents.
Some tenants described the landlord, James Giddings, as polite and a good steward of the building.
Also a commercial building owner, Giddings, 56, said in an email that his expenses outpaced the rents that he could collect. Some tenants did not pay all their rent. He also said he was up against high property taxes and a slow-moving legal system.
As inflation has spiked in recent months, landlords have faced rising expenses for labor, fuel and maintenance.
In the end, Giddings said, selling the building was the best outcome. “I’m happy for the tenants (soon to be owners) and wish them success,” he said in an email.
The landlord “underestimated our ability to communicate with one other, which was his biggest downfall,” said Kevin Stone, 54, one of the tenants. “People will look at us, they’ll look at this building in the Bronx and they’ll just think, ‘Oh, these are just mediocre people.’ But people in that building, they have full-time jobs, they’re professionals and they work. We have the ability to think on our own and we have the ability to write. We can rely on our own wits and our knowledge to get things done. Which we did.”
Despite an uncertain outcome and some internal conflicts, they held together — a potential road map for tenants of other buildings to become homeowners.
“I look at it as generational wealth because I don’t have a family yet. One day when I do, this is something I can pass down to them,” said Claudia Waterton, another tenant. “It’s something that no one can take away. You can always come back to this one spot and say, ‘I did this, I accomplished this.’”
At the Bronx Tavern in 2017, the goal was not ownership; it was survival. Over drinks — beer, cocktails and waters — the neighbours compared notes. Tenants paid around $1,100 a month for studio apartments. They had all had variations of the same conversation with Giddings, who had come knocking on their doors to tell them to prepare for rent hikes of $400, $500, $1,000.
“We all knew that it was a sink or swim situation. It was either come together collectively as a group or be screwed over,” Stone said.
One of the tenants at the first meeting told her neighbours that she had learned in a housing court case with the previous landlord that their apartments might be rent-stabilized, which would have given them vast protections, even if their leases didn’t say so.
The tenants started offering up their skills. One said he was a good writer. Another, a photographer, offered to document signs of disrepair in the building. A few said they could visit city and state government offices to gather information. Someone else had a friend at a state housing agency and could make some calls.
“We were so, I don’t want to say clueless, but we didn’t know what we were doing. We were just faking it until you make it,” said Waterton, whose knack for research and administrative tasks ultimately played a pivotal role in the group’s ability to stay organized.
That first meeting also exposed potential rifts. One of the tenants pulled Waterton, 41, aside and expressed discomfort about meeting at the tavern. Not everyone had the disposable income to split the bill or felt comfortable saying so.
So the meetings moved away from the restaurant to ground zero: They crammed into one another’s studio apartments and strategized. Their five-story brick building of loftlike studios sits on a sleepy block in the shadow of the Bruckner Expressway with clapboard row houses on one side and warehouses on the other. The South Bronx had become a darling of developers with deep pockets and big plans for one of the poorest corners of the city. Properties were being plucked up, and trendy shops and restaurants were opening in the area, as groundwork was being laid for a massive development along the Port Morris waterfront.
First, the tenants had to respond to Giddings’ claim to the state that the building had been substantially renovated a decade earlier. If he could prove his case, the building would no longer be rent-stabilized and he could charge the tenants whatever he wanted, or simply not renew their leases.
While Giddings offered one of the tenants, Courtland W. Hankins, III, a side deal, promising a favourable lease in exchange for dropping out of the fight, he took Waterton to housing court. “A lot of us didn’t know what harassment meant or what intimidation meant,” said Waterton, who works for a printing company. “We didn’t realize that some of the stuff that was happening were tactics to get us to leave.”
Giddings denied badgering tenants. “The current rents could not support the expenses, let alone generate any return on the investment,” he said. “Any suggestion that any tenant was harassed is news to me. We do not harass!”
In the summer of 2017, a tenant organizer, Anna Burnham, contacted the group. She thought it had a chance to take over the building because the tenant association was organized and Giddings did not have a deep portfolio of residential properties. “If we get on this guy enough, if we do that, I feel like there’s a threshold where he’s going to want to walk away,” Burnham said.
But for all its organization, she could see cracks in the nascent coalition: The stakes were different for different tenants. “Some tenants were fighting for their lives a lot more than others,” she said. “If you’re a working professional, you’re probably not in arrears. You might not empathize or understand why someone of a lower income is in arrears and would have a different perspective.”
Lizzette Concepcion moved into the building in 2010, arriving postpartum from a homeless shelter. Giddings sued her for unpaid rent. However, he changed his address repeatedly, making it impossible for her to get the housing subsidy to him, according to her lawyer at the time, Jane Li. Concepcion estimated that she owes $20,000 in back rent, and some of those arrears could have been lessened if her housing subsidies had been received.
She is still anxious about housing instability because she cannot work and receives public assistance for her disability; she and her son have chronic asthma. “It was frustrating. Tt was emotionally a roller coaster,” she said. “I thank God that I’m still here. There are days when I feel, how much longer can I be in this apartment?”
Concepcion, 50, felt powerless, but tenants with low-paying jobs, and those like her who relied on public assistance, were the group’s biggest strength. The group would not have qualified for free legal aid that was critical to its victory, said Hankins, 51, who was out of work at the time Giddings first acquired the building and was one of the tenants whose income was low enough to qualify for the aid. He is now a housing advocate for people experiencing homelessness.
But Hankins was initially doubtful that the group would get very far, and he was incredulous when Stone, who works in banking, suggested they buy the building, after he and Waterton attended a gentrification conference with a session on homeownership in March 2017. “We looked at him like he had two heads,” said Hankins, recalling how he and other tenants dismissed the idea.
Although incomes varied among the tenants, most of them are Black and Latino, and they shared an understanding of the long history of redlining and housing disenfranchisement in Black communities. Ownership felt elusive and unimaginable. “We’re almost conditioned not to see the bigger picture, not to believe the bigger picture, like ownership is not for us,” Hankins said, sitting in his fifth-floor apartment on a recent March afternoon, surrounded by the records and recording equipment he uses to produce hip-hop. “We’re not used to being in the position of empowerment.”
Waterton tapped into another history: An immigrant from Guyana, she moved with her family into a Brooklyn apartment building her grandfather owned and served as a way station for other relatives. “That was a safe haven for us,” she said. “When this whole thing came up, that we could buy the building, I was like, ‘Oh my God, this is full circle.’”
In 2019, Burnham introduced the tenants to the Urban Homesteading Assistance Board, a non-profit that supports HDFCs and also helps convert them.
After the board explained how ownership was possible, “We will win” became something of a mantra for the tenants. Some paid for supplies, like a computer software program for project management, printing and mailing costs and food and drinks for the meetings. Waterton said she gave up weekends with friends and family functions.
Giddings initially was uninterested in selling the building to the tenants, but then the pandemic hit, and the metrics changed. The courts closed, stalling any housing court cases Giddings had against tenants. And the case with the state over whether the building was regulated was delayed for a year.
Other potential buyers also were not interested in a building tied up in litigation, and changes made in 2019 to state rent laws meant that if the building was rent-stabilized, the apartments would almost certainly remain so even if tenants moved out.
In an email, Giddings described a situation that was frustrating and ultimately financially unfeasible. “The tenants were well organized and had great representation,” he said.
Giddings wanted the tenants to withdraw their challenge to his claim to deregulate the building. In exchange, he would give the tenants leases that followed rent-stabilization guidelines, but some tenants worried that a new landlord could buy the building and not honour the agreements.
But where would the tenants get the money to buy the building?
Normally, HDFCs are financed with public funds, but in 2020, the city had limited staffing, a backlog of projects and had paused its loan program because of uncertain market conditions caused by changes to rent laws and the pandemic.
Instead, the Urban Homesteading Assistance Board took out a low-interest bridge loan from one of its donors — the first time the non-profit had used solely private funds to pay for such a deal — and will refinance the loan when it turns the building over to the tenants.
They finally struck a deal. “UHAB came in with by far the highest bid and provided solid guarantees,” Giddings said in the email. “It took them some time, but they eventually got their act together and closed.”
The path to ownership is not done yet. At least 80% of the tenants must take 12 hours of training with the board to learn how to own, manage and operate a co-op — yet another step that worries Hankins. What if all the tenants don’t finish the coursework? Among a host of legalities and fine print to complete, the board is also seeking a tax exemption for the property, which is critical to keep the apartments affordable.
Barring any problems, current tenants will have the option to purchase their apartments for $2,500 apiece, a discount afforded to them as the original shareholders who did the work to convert the property. City guidelines will determine the prices for the seven vacant units, which will be sold through an income-restricted housing lottery operated by the city. A comparable unit in the Morrisania neighbourhood in the Bronx was recently listed for $72,000.
On a blustery March afternoon, the tenants gathered at the building to celebrate. Josh Flores, 41, a nurse practitioner who has lived in the building for more than a decade, asked other tenants to inspect his black T-shirt. “Is it too much?” he asked, running his hands along the red block lettering that read, “Join the Fight for Housing Rights.”
Later, Hankins led chants with a bullhorn. “We will win,” he shouted. “Because we already won!”
c.2022 The New York Times Company
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