The Real Deal New York

Low-income Brooklyn tenants turning down buyouts

Refusals complicate landlords' plans to transition units to market rate

May 29, 2014 11:32AM

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1059-union-street

1059 Union Street

Updated: Many low-income Brooklyn residents are turning down large buyouts because they do not see the long-term benefit of vacating rent-stabilized apartments. And the refusals are making it more difficult for landlords to transition units to market rate.

Purchasing properties for the purpose of removing rent-stabilization status has proven risky over the last decade, as some property owners find tenants unwilling to leave, the City Limits Brooklyn Bureau reported. Unable to increase rents, landlords are left with a wide spread between the income generated by the building and the mortgage taken out on it. The Brooklyn Bureau cites the example of one building in Crown Heights. The Urban Homesteading Assistance Board estimates a $1,730,000 mortgage would be sustainable, but the current mortgage on that property is $5 million.

With tenants refusing buyouts, some landlords are taking aggressive measures, such as temporarily relocating tenants, ostensibly to renovate their apartments, and then locking them out.

The Department of Housing and Preservation assigns properties that generate numerous tenant complaints to its Alternate Enforcement Program, which pays up-front repair costs the agency deems necessary and then bills the owner. [City Limits Brooklyn Bureau]Tom DiChristopher

(This is a corrected version of an earlier story)

  • TefExpat

    With this new Mayor, his plan to devalue these buildings is well underway. Ideally, the owner would walk and the City will give it to the tenants and secure a purchased voter base forever.

    • Uncle Rich Pennybags

      They won’t give it to the tenants. It will go to UHAB or it’s cronies who will then lever it up and pocket the cash without making the repairs and never making the transfer. They did it all over Harlem in the last cycle in an abuse if the TPT program. The tax payer gets stiffed in the process.

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