Mayor Zohran Mamdani wants to transfer distressed buildings to new ownership.
One of the first tests of that strategy will involve an East Harlem portfolio of 38 rent-stabilized Manhattan buildings currently in foreclosure.
The city is specifically supporting a bid on the buildings by Spatial Equity Co., a developer specializing in affordable and supportive housing, according to tenant organizers working with the portfolio. The buildings were previously owned by affiliates of Emerald Equities. The financial details of the bid were not disclosed.
The ultimate result of negotiations, and whether Spatial Equity is able to win, stabilize and operate the properties, will illustrate how Mamdani’s plan to bring in new ownership will play out on the ground.
Tenant organizers said they are hopeful that the bid, and a plan to put at least five buildings into a community land trust, are successful.
“We want to be in charge of our livelihoods and our homes,” said Cara Polte, who lives in one of the buildings and has been part of the effort to bring in a community land trust.
“This is not something the city presented to us. Rather, it was something that we have been organizing toward,” said Polte, who is a cofounder of the East Harlem Tenant Union.
Spatial Equity Co did not respond to a request for comment. A spokesperson for the city declined to comment.
The mayor’s housing plan outlines a playbook to transfer distressed properties with numerous housing code violations to new and more responsible owners. Foreclosure auctions provide one opening for that type of transfer. The city can tip the scales toward its preferred owners by offering city financing and taking buildings off its property tax roll, in exchange for an agreement that regulates rents.
The legal cases were first filed against affiliates of Emerald Equities in 2024, with judgments of foreclosure handed down this year.
The 38 buildings had a combined 2,342 housing code violations as of April 3, according to an analysis from Gothamist.
After tenants in five of the buildings on East 103rd Street went on a rent strike, they settled with the landlord last year, securing $500,000 in rent credits and an assurance of repairs, according to Gothamist.
Those are the buildings that could potentially be placed into a community land trust and mutual housing association.
The group Community Voices Heard, which is organizing in the buildings, has been running a “buyer beware” campaign asking other investors to stay away from the portfolio and letting potential buyers know at least some of the buildings are organized.
Landlords critical of Mamdani’s plan to transfer ownership have said that rent-stabilized properties will continue to fall into distress, even with new owners, as rents fail to keep up with rising expenses. The statewide Housing Stability and Tenant Protection Act of 2019 closed avenues for landlords to increase rents or deregulate units. In June, the city’s Rent Guidelines Board voted to freeze rents in rent-stabilized apartments, a key Mamdani campaign promise.
However, the buildings do collect enough in rent to cover operating expenses, Cea Weaver, director of the Mayor’s Office to Protect Tenants, told The Real Deal in May.
“The buildings cash flow. What they need is rehab,” Weaver said. “There’s a stable future here.”
Mamdani has begun referring to his preferred recipients of transferred properties as “high-road landlords.” That group typically includes nonprofit organizations, community land trusts and likely Spatial Equity.
The administration is working with the company on another project to build 131 affordable units on a former police department parking lot in the East Village. The firm describes itself as a “mission-driven community developer.”
Sergio Sorza, an organizer with Community Voices Heard, said the group is hopeful about the process.
“These tenants have had one bad landlord after another,” he said.
Attorneys for Emerald Equities and the lender on the portfolio did not respond to requests for comment Wednesday.
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