On a cold morning in January, the head of the city’s housing agency, Dina Levy, toured apartment buildings in Hell’s Kitchen.
The buildings, at 351-357 West 45th Street, were once owned by notorious landlord Steve Croman and are undergoing a $20 million renovation by the new owners, SMJ Development, High Point Property Group and Services for the UnderServed.
The transformation of these buildings is linked to both Levy’s past roles and her new one as the city’s new commissioner of the Department of Housing Preservation and Development. Before joining Mayor Zohran Mamdani’s administration, Levy was working as a senior advisor to the New York Attorney General when that office brought criminal and civil charges related to allegations of mortgage fraud and tenant harassment against Croman in 2016. Years later, HPD provided financing for a significant renovation of the properties, which were dilapidated and rodent-infested when the new owners took over.
Levy is taking HPD’s helm as it navigates how best to handle buildings in deep distress, and as it gears up to take on bad landlords through the Office to Protect Tenants and “rental ripoff” hearings. For extreme cases, Mayor Mamdani has said that the city will seize buildings from slumlords who fail to make urgent repairs, and administration officials have enumerated the benefits of city ownership.
But in an interview last week, Levy said the city doesn’t just seize property. She pointed to the city’s 7a program, under which court-appointed administrators take over management of buildings where conditions are unsafe. Properties with unpaid tax bills have also been transferred through the city’s third-party transfer program and the lien sale.
Before working for the state Attorney General, Levy was the director of organizing at the Urban Homesteading Assistance Board (a nonprofit that has taken over buildings through the third-party transfer program and worked with tenants to convert the properties into limited-equity co-ops).
Most recently, she served as the senior vice president of single-family and community development with the state’s Division of Homes and Community Renewal, or HCR.
Levy was charged with a broad portfolio at HCR, where she ran the agency’s homeownership new construction program, as well as some small, multifamily rental construction, while also overseeing its resiliency work and the State of New York Mortgage Agency.
“What I think I missed when I was at the state was a place-based perspective. You’re running to Syracuse, Rochester, Long Island and New York City,” she said in a recent interview. “There’s something nice about being back in a place where you are focused on the metes and bounds of the city, and can be a lot more strategic.”
During an interview last week, Levy described how she’s thinking of her new role. This conversation has been edited for length and clarity.
What do you see as your priorities coming into HPD?
I’ve been cautious about jumping to conclusions because it’s a big agency. But I had a sense of the top issues from a meta-perspective. Probably in this order, there is a lot of fragility in the existing affordable stock, but also in the privately-owned stock, in the rent-regulated and also the market-rate. That’s largely driven by a significant rise in expenses, with insurance, taxes and utilities. I think a big piece of what we’ll be focused on is: preservation, shoring up both our partners who are already subsidized and also opportunities [where] there [are] struggling portfolios that the city can intervene and then bring under a regulatory framework that preserves and actually expands the amount of affordable housing.
What else?
We obviously have to build a lot more. I think the big challenge [is] the rising cost of construction. I was doing a lot of work at the state, looking at new technologies, looking at off-site construction, factory-built. I know we’ve tried some modular projects that haven’t necessarily achieved the full success that everybody’s hoping for, but I think there’s some interesting diagnostics that we’re doing right now about why that isn’t working, and what we could do to make it work.
The third thing is efficiencies to bring into HPD and across other city agencies to build faster, more efficiently. Sometimes HPD gets a bad rap that somehow we’re slowing things down, or we’re too bureaucratic. I would say the work that comes out of that agency is awe-inspiring, but that is not to say there aren’t efficiencies or improvements that I think we can bring to bear.
There’s a fourth [that will be the focus of the mayor’s Office to Protect Tenants]: Are we doing everything we need to do in terms of enforcement? When I was at the AG, we formed this task force that still goes on between HCR, the AG, HPD and Department of Buildings. I think that that needs to be looked at again, to say, are we getting out to portfolios, early upstream, to prevent that [systemic] deterioration?
What should the city’s role be in taking over such properties?
We don’t take over properties. It’s not quite how I would put it. We typically don’t own real estate, and probably shouldn’t own real estate. I do think we should be facilitating transactions like [the Croman property]. We need to have the ability to both use our enforcement tools to bring the bad actors to the table, and then finance preservation purchases. I think that is our role with the Office to Protect Tenants.
With that office, though, there’s been a lot of talk about seizing properties.
I think we should be careful about seizing property. There’s a constitution. We can’t take property. But I think there are enforcement actions that we can bring to bear, that we can do things like 7a, and when there is complete willful disregard for the law, we can remove a manager, or remove an owner and put in responsible management. We have a huge network of affordable for-profits and nonprofit partners who are willing to take on projects. Our job is to make those matches and facilitate, from a financial perspective, those transactions.
Do you think nonprofits are in a better position to stabilize these properties?
We need a big tent, right? There is certainly a huge role for the nonprofits to play, but also for the for-profit, mission-based affordable housing providers. Nonprofits, by definition, are doing this without a motivation for profit, which is important when you’re creating affordable housing. I think they have a particularly important role to play, but not to the exclusion of a bunch of really good for-profit developers who are mission-focused, who are not looking to exceedingly take profit out of buildings, but actually want to invest in their buildings. I think we need both. There’s also a third option, which is tenant ownership, which has a role to play in that debate.
When you were at UHAB, you helped organize tenants at 1520 Sedgwick Avenue to avoid sale of the building to what was seen as a predatory buyer. But under the owner who took over, the property has many active violations. Do you still see that deal as a model?
Workforce Housing Group is [a] for-profit mission-based group. They’ve owned the building a really long time, and the tenants made that selection. This was not foisted upon them. They selected Workforce Housing, and I think, have a really nice partnership. That building is going through [a multi-million-dollar] renovation. You have a responsible for-profit who is in partnership with the tenants, and now that it’s time to recapitalize the building, they’re doing that. It’s understandable that as things age, they need to be recapitalized, but that’s what a responsible landlord does. It’s 100 percent the right model.
The City Council revived two bills that were vetoed by Mayor Eric Adams that create new regulations for city-financed housing. How will they affect HPD’s ability to produce housing?
The question right now is: do these bills go too far in prescribing what’s viable? In an effort to make sure we [are] building big enough units, are building enough homeownership, you can get over-prescriptive in a way that makes it really hard to respond to the market, so I think that’s the balance that we have to strike.
The “rental ripoff” hearings are focused on giving tenants an opportunity to testify about their experiences. But do you think the hearings will result in any policies that will help landlords?
The way we’ve been thinking about the hearings, from HPD’s perspective, is where we need to make improvements around code enforcement. One is a need to potentially expand the 7a program. That’s been underutilized in the last few years. The second is really how we coordinate our efforts with other agencies, particularly DOB.
The thing that’s come up most recently is we’re hearing that some landlords or managers are using the threat of ICE to retaliate against tenants who complain or call 311, and I think that needs to be looked at very closely.
On the landlord question, which I haven’t been thinking [about] as much through the lens of the hearings, I think there is fragility in the market, which means landlords are also struggling. We are exploring a number of ways to bring resources to well-meaning, law-abiding landlords that are potentially struggling. I think that struggle is largely being driven by expenses, which have increased significantly in just the last five years. One of the things we’re looking closely at is insurance.
Would that coincide with the rent freeze?
We’re not going to solve this dislocation between expenses and income right now with a rent increase. I think the right thing to be doing is focusing on resources to make sure landlords can maintain their buildings, and what we can do to bring down some of the expenses. You can get overly focused on freezing rents or [not freezing] rents, but I think it sort of misses the point.
We hear a lot from developers about 485x and the construction wages attached to the property tax break.
I’ve started to have some conversations with landlords who are would-be users or actual users of 485x about what is working and what is not working. I want to have some real conversations to find out [if] we need to make some accommodations in light of the prevailing wage and the deeper affordability restrictions. I think there’s an interesting question there about what the city and HPD specifically needs to do to make sure that program remains usable and effective, because I think it will be a big part of achieving the mayor’s housing plan.
Do you think there will be more examples of the city intervening in situations like the sale of the Pinnacle portfolio?
I know there will. There are several portfolios that we have been watching. I think there will be some more portfolios coming down the pike that are going to either end up in foreclosure or bankruptcy or something similar. I think having the administration so directly focused on that is great. I see it as an opportunity to bring some of these units into HPD regulatory structures, potentially through financing, and also to be watching them very closely to make sure whoever is buying them — like in the case of Summit buying the Pinnacle portfolio — that we will be watching that very closely, and that they will be expected to repair the building, put in all the resources, not be harassing tenants.
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