City program aims to replace owners of distressed, deteriorating rental buildings

A new city program will put $750 million in the hands of housing agencies to lend to owners who will buy up deteriorating moderate-rent apartment buildings in financial distress and restore them to better conditions for tenants. There are 267 city buildings with 3,564 apartments that are both in poor condition and are close to or already in foreclosure, according to the Department of Housing Preservation and Development, which is heading up the program, announced first in Mayor Bloomberg’s State of the City address Wednesday. Many such properties were purchased by private equity firms during the housing boom. The funding will be provided over five years; the first $150 million will provide capital for experienced owners with good track records to acquire buildings quickly. One such owner will be Mo Vaughn, the former New York Mets player who bought 14 Bronx buildings in a foreclosure auction last month. The remaining $600 million will be provided through New York City Housing Development Corporation bonds and city capital, which will be used to buy and repair the buildings. The city will first focus on the buildings in the worst shape, pushing out current owners with threats of code violations and tax liens. [NYT]