The Real Deal New York

Why the city is handing private developers 95 resi buildings

Properties are in debt and in disrepair, officials say
July 18, 2018 11:30AM

A distressed NYC building (Credit: iStock)

The City Council is about to let ownership of 95 rental buildings and co-ops transfer to private developers.

The deals will take place through a process known as Third Party Transfer, which allows developers that the city chooses to take ownership of multifamily buildings with outstanding debts, according to Politico. The latest batch of buildings consists of 56 rentals and 39 co-ops in the Bronx, Brooklyn and Queens that the city says are in disrepair and behind on water bills and tax bills.

A round of transfers for Manhattan buildings should take place within the next few months, and 26 properties in the borough are currently eligible.

The program has been criticized as a way for officials to take equity away from residents and further enrich developers, and the Housing Development Fund Corporation coalition has framed it as effectively foreclosing on residents of the buildings

City officials maintain that the current owners cannot afford to keep their buildings in good condition, and they have pledged that the new buyers will have to keep the buildings affordable for current tenants.

Libby Rohlfing, a spokeswoman for the Department of Housing Preservation and Development, told Politico that Third Party Transfer was a last resort but the most effective way to improve the buildings.

“This is the best path forward to improve conditions in these buildings, stabilize their future health and ensure their long-term affordability for residents,” she said. [Politico] – Eddie Small