The site of a stalled Prospect-Lefferts Garden condominium is set to become a city-subsidized middle-income housing project in the first deal to close since the city launched its Housing Asset Renewal Program in 2009, according to the New York Times. The $20 million program, intended to simultaneously jumpstart stalled construction sites and fill a need for affordable housing, has been slow to catch on as developers attempted to wait out a rebound in the housing market. But facing foreclosure at the 382 Lefferts Avenue site where it had once planned a 26-unit condo building, developer Tali Realty applied for the city program last year. Comments

The city may extend the deadline for developers of multi-family buildings aiming to qualify for the coveted 421-a property tax break in an attempt to jumpstart stalled construction projects across the five boroughs, according to the New York Times. The city upped its qualification requirements for the tax break several years ago on the heels of criticism that it had been giving away too much potential revenue through the incentive, but many developers had rushed to file their building permits before those more stringent requirements took effect in June 2008. Those who qualified for the 421-a under the old rules had to complete
their projects within three years. For many builders, that three-year
mark is now fast approaching. [more]

New York housing officials have identified 200 buildings they say are the most poorly maintained in the city, racking up more than 20,000 hazardous violations for issues including mold, vermin and heating, the Wall Street Journal reported. Brooklyn had the highest total, with 99 buildings, while the Bronx had 70 and Manhattan only had 23. “For the families who call these terrible 200 buildings home, the conditions pose a real threat to health and safety — not only to the tenants, but to the neighborhood as a whole,” Rafael Cestero, commissioner of the city’s Department of Housing Preservation and Development, said in a statement. [more]

A 10-building, 548-unit rental complex in the Bronx may have found a buyer, after falling into foreclosure and dilapidation last year, according to Crain’s. The portfolio, which Los Angeles-based Milbank Real Estate bought in 2007, was named the worst in the city in 2010 by Housing Commissioner Rafael Cestero, after it racked up upwards of 4,300 violations. This, however, has not deterred Scarsdale investor Steve Finkelstein, who said he’d buy the properties and their mortgage for $28 million. [more]

Rafael Cestero, the commissioner of the city’s Department of Housing Preservation and Development, will be leaving his position to pursue an opportunity in the private sector. During his five years at HPD, Cestero “put his unique brand of innovation and pragmatism to work in advancing our mission to strengthen our neighborhoods and create a more affordable and sustainable city for all New Yorkers,” said Mayor Michael Bloomberg. He added that Cestero was involved in the development of the New Housing Marketplace Plan to create 165,000 affordable housing units by 2014. TRD [more]

With mounting numbers of buildings in foreclosure and others in disrepair, city officials and housing advocates say that corrupt investors are trying to purchase these buildings, often clashing with tenants, the New York Times reported. Rafael Cestero, the commissioner of the city’s Department of Housing Preservation and Development, said he had seen a number of distressed properties sold to buyers who were not acting “in the best interests of the city, the neighborhood or tenants.” City officials, seeking ways to intervene, are often virtually powerless, since most of the deals are private. “This is probably the most difficult thing we’re doing at HPD right now,” Cestero said. While the buyers are often paying less than the previous owners, tenant advocates maintain that prices are still too high for the amount of rental income the buildings generate and the repairs they need. So the new owners, advocates say, have already revived old tactics of tenant harassment, including bringing trumped-up lawsuits against tenants in rent-regulated apartments, hoping to evict them, and then raising the rent under the state’s so-called vacancy decontrol rules. [NYT]

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While Stuyvesant Town and Peter Cooper Village owners Tishman Speyer and BlackRock Realty said they’d transfer control of the residential complex to creditors two weeks ago, that promise hasn’t come to fruition, due in part to $90 million in unpaid state and city taxes, according to Bloomberg News. Rafael Cestero, commissioner of New York City’s agency on Housing Preservation and Development, said that either Tishman and BlackRock or special servicer CWCapital has to pay the taxes — but, so far, neither is jumping at the chance. State law mandates that the owner of the distressed property has to submit unpaid taxes upon transfer to a special servicer, otherwise the servicer is stuck with the bill. “The reality is [Tishman and BlackRock] can’t just turn back the keys.” Cestero said. “CW doesn’t want to pay the [back taxes] so they’re going to have to negotiate this.”

From left: Mo Vaughn, co-founder of Omni New York, Stuyvesant Town, and Rafael Cestero, Department of Housing Preservation and Development commissioner

More rent-stabilized buildings could be facing foreclosure, with some already in default, due to property owners overpaying for properties, WNYC reported. Most notable is Tishman Speyer and Black Rock Realty’s purchase of Stuyvesant Town and Peter Cooper Village. Other cases include the sale of Ocelot’s 14 troubled Bronx buildings to Omni New York, headed by former Mets first baseman Mo Vaughn.
“I think what we’ve learned through this crisis is that that pot of gold isn’t there and that owners really need to understand the rent regulation system, they need to understand local markets that they’re buying buildings in and that lenders that are making those loans need to reflect those conditions in their underwriting,” said Department of Housing Preservation and Development Commissioner Rafael Cestero.  [WNYC]

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The effort to increase affordable housing in the city is remaining in high gear despite recurring budget cuts elsewhere. By the end of the year, the city’s Department of Housing Preservation and Development, led by Commissioner Rafael Cestero, is on track to complete its 100,000th unit of either rehabilitated or new public housing. The agency’s goal is 165,000 affordable apartments by 2014 and is also helping to refinance overleveraged affordable properties. The Dec. 2 sale of 14 South Bronx Buildings to Omni New York, headed by former Mets first baseman Mo Vaughn, is one example of how the city’s involvement has been met with success. Omni replaced Ocelot Capital Group, which had abandoned the buildings and defaulted on the mortgage, and the city, which had already overseen $1.3 million in repairs there, had worked with the $29 million loan holder Fannie Mae to arrange the sale. The city has allotted $750 million to similarly aid overleveraged properties in the future, which in turn will save 20,000 to 30,000 affordable units. [Crain's]

Omni New York, a real estate development company headed by former New York Mets first baseman Maurice “Mo” Vaughn, is the successful bidder of 14 troubled South Bronx buildings owned by Ocelot Capital Group, Mayor Michael Bloomberg, other politicians as well as Fannie Mae announced today. The mortgage debt on the dilapidated Ocelot buildings, which totals $23.8 million, was also purchased for a reduced price by Omni from Fannie Mae and Deutsche Bank through the bidding process. Omni plans to invest up to $1 million in emergency repairs and hopes to become the long-term owner of each property. “This is a big step in the right direction that puts these properties on the path to finding responsible ownership. Omni brings a track record of success and has worked with the city on some of our most challenging and distressed properties,” said Housing Preservation and Development Commissioner Rafael Cestero. TRD