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Thread: One Housing Woe Gives Way to Another

  1. #241
    Chief Antagonist Ninjahedge's Avatar
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    Sep 2003


    What should be investigated is simple.

    Look at who may be able to pay ANY loan back, if it was reduced, and see what the net cost would be to the bank if they were to foreclose and (try) to sell the property.

    Certain estimations could go into effect, like taxes on foreclosed properties, depreciation in value due to foreclosure activity by themselves and others, and just the bottom line foreseeable price of the structure.

    So if someone bought the house at $500K, had $100K in equity and can no longer pay, they should take the actual numbers to figure out what would yield them the least long term loss.

    The house is now worth $300K, so even if sold, there would be a $100K loss to the bank if the homeowners declare bankruptcy or foreclose. So, see what the cost would be to market and sell the house. Say 4% = $12K. Put it on the market in a slow economy and you are talking 6 months of dead cash AND taxes. Lets call that $10K. Lets also not forget that, even with reduced cost, if the defaulters can pay, you are losing out on reduced mortgage payments of possibly another $10K. SO now you are looking at about another $30K of lost monies, not counting depreciation if they foreclose on it, and 4 neighbors.

    Refinance the house at a $270K loan instead of $400K and use a reasonable rate or 50 year mortgage.

    A LOT of people would probably be able to swing that as opposed to nothing. And if they can't, the bank is not going to lose much.

    The problem was, when the bubble burst and people started defaulting, the banks jumped on the "me first!" wagon to balance their own leveraged books and ended up scuttling the sinking ship rather than bailing it.

  2. #242
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002


    Good on them!

    Tenants and Community Group Save Dilapidated Bronx Complex


    Minarda Pimentel had to keep her clothes in sealed plastic bags because rats gnawed on everything in her closet.

    Her neighbor Dominga Sanchez had to boil water on the stove for showers because there was no hot water — or heat for that matter — for days at a time. Ms. Sanchez’s oldest daughter moved out because the mold on the walls made her sick.

    Their hardship stories are common enough in the low-rent neighborhoods of the Bronx, where dilapidated buildings are often passed from one neglectful landlord to the next. But the tenants of this decrepit apartment complex on College Avenue, many of whom speak little English, finally decided that they had enough.

    Behind their creaky, peeling doors, they embarked on a yearlong campaign against their landlord that attracted the attention of influential supporters and eventually led to a change in ownership.

    The complex, which has 63 apartments in three 1920s buildings, was acquired last month by a group of community-minded organizations led by the Banana Kelly Community Improvement Association, a nonprofit developer of moderate-cost housing in the South Bronx, which assumed the mortgage on the complex and is committed to spending an additional $3.5 million for renovations.

    Even before the closing papers were signed, change was afoot: The new owners sent a mechanic and a truck carrying 1,500 gallons of heating oil to restart the boilers.

    “It feels like winning the Mega Millions,” Ms. Sanchez, 48, said in Spanish, referring to a multistate lottery. “Since the new owners came, the heat hasn’t stopped and they’re coming to fix everything.

    “I’ve lived an experience in this apartment that no one should have to.”

    The Bronx deal grew out of an unusual program, known as First Look, in which a small number of banks have agreed that instead of selling troubled residential buildings to the highest bidder, they will give community developers first crack at taking the buildings over.

    The program, which started a year ago, has allowed community developers to buy a dozen privately owned buildings in the Bronx and Brooklyn and, in the process, expand their footprint beyond mainly city-owned or abandoned properties.

    Bill de Blasio, the New York City public advocate, said the College Avenue deal would open the door for community groups to help other long-suffering tenants.

    His office has compiled a watch list of more than 300 privately owned apartment buildings, mostly in Brooklyn and the Bronx, that have been repeatedly cited for housing violations.

    “We’re breaking the vicious cycle that sees troubled buildings endlessly bought, sold and then left to deteriorate,” Mr. de Blasio said. “What these tenants have accomplished is extraordinary, and it’s a model we need to replicate: pressure from within and resources from without.”

    The Bronx complex was previously owned by Eli Abbott, a Brooklyn businessman whom Mr. de Blasio has called the city’s worst landlord. The rent-regulated apartments cost about $800 monthly for a one-bedroom or $1,200 for a two-bedroom and are often paid for with government assistance, tenants said.

    But the problems with them could be seen in the 685 violations pending against the buildings, myriad offenses that included the presence of vermin, water leaks, broken windows, lead paint, defective electrical outlets and missing smoke detectors.

    The city spent $36,000 on emergency repairs in the buildings. Still, city officials and housing advocates said there was only so much they could do to bring relief to tenants, because the buildings were privately owned. So Ms. Sanchez, 48, a disabled worker in a window factory, and her neighbors sought help from Susanna Blankley, director of housing organizing at CASA-New Settlement Apartments, a local community group, and formed their own tenants’ association.

    Last September, they sent a letter to Mr. Abbott and the bank holding the mortgage on the building, New York Community Bank, listing the repairs that were needed.

    Mr. Abbott described the complaints as “completely frivolous and baseless” in a letter to the bank, and said tenants had “unrealistic expectations as if they were living in million-dollar Manhattan apartments.”

    Mr. Abbott declined to comment for this article.

    Ms. Sanchez said her calls for repairs were ignored for so long that she finally gave up and spent $150 to replace a broken toilet and $180 to fix bathroom tiles damaged by water leaks. She said she started withholding part of her $1,200 monthly rent in protest.

    Ms. Blankley said the tenants eventually learned that Mr. Abbott had listed the complex for sale early last year, in one advertisement asking $5 million.

    Fearful that they would be saddled with another unsatisfactory landlord, the tenants made banners from white bedsheets — spray-painting them with messages like “We know our rights” and “We’re not moving” — which they hung from fire escapes to scare off unwelcome buyers. They also sued Mr. Abbott, seeking a court-appointed administrator to assume control of the buildings.

    Ms. Blankley started approaching community groups about taking over the complex. Most said they simply did not have the money. Then she found Harold DeRienzo, the president of Banana Kelly, who brought in two partners, Wavecrest, a for-profit management company, and FCE College Avenue, a financial firm, which jointly provided the money for the deal.

    New York Community Bank rejected their first bid, to reduce the principal on the mortgage, which the buyers would assume, to $2.4 million from about $3.4 million.

    But the bank continued negotiating and finally agreed that the buyers would assume a mortgage of $3 million, with the bank allowing the group to make interest-only payments at first. “As much as we want to be a participant in the community, we wouldn’t be responsible to our shareholders if we gave it away — it’s a balancing act,” Chris Beck, a vice president of New York Community Bank, said of the agreement.

    Mr. DeRienzo said his group was working with city housing officials to borrow about $8 million to repay the bank and finance renovations — about half of which will come from city funds, half from a private lender — in return for a commitment to maintain the apartments for low- and moderate-income families.

    Mr. DeRienzo’s group also paid Mr. Abbott about $300,000, and paid hundreds of thousands more to settle unpaid property taxes and municipal bills. The new owners have already gone door-to-door to inspect each of the apartments, some of which still had antiquated fuse boxes. They sent in an exterminator and cleaned out piles of garbage in the basement.

    Ms. Pimentel and her neighbors gathered in the lobby recently to celebrate their changing fortunes with a potluck dinner of baked chicken, rice and beans and macaroni salad.

  3. #243
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002


    I would propose another form of cross-subsidization called the You Don’t Need to Live in a $50 Million Penthouse Tax, which would require anyone buying a property for more than $10 million (of which there are currently about 280 listed in The Times) to pay a percentage of that cost to an affordable-housing fund. And then commit, in writing, to never complain about it.[/quote]

    LOL! Excellent.

    “It isn’t all that complicated,” Christine C. Quinn
    Would she be happy for her elderly relatives to go through the stress of doing that? What if they don't want to move? Would they have any choice in where they go? How about their future happiness, which is pretty damn important during their twilight years? Stupid woman .

    When ‘Affordable’ Is Just a Word


    The spring has the real-estate press enthusiastically reporting on the construction of 432 Park Avenue, an apartment tower that its developers claim will be the tallest residential building in the Western Hemisphere. Apartments in the tower, designed by Rafael Viñoly and to be completed in 2015, are offered in the $20 million to $80 million range, which in the context of Ludicrously Priced Housing for Oligarchs Who Spend Most of the Year in Tax Exile on Mediterranean Yachts isn’t as numbing as it might otherwise be. Such is the historical moment that a few blocks west, in another glass tower, called One 57, apartments have sold in the past year for more than $90 million.

    Given these perversions, it is hard to understand what affordable housing means in New York, in one sense because the market doesn’t really abide it, and in another because the phrase itself in policy terms has become so amorphous.

    Just as shocking, arguably, as the $44 million four-bedroom duplex in TriBeCa that turns up in the real estate listings of The New York Times is the $1,400-a-month, two-bedroom rental apartment in the Belmont section of the Bronx. According to the National Low Income Housing Coalition, which calculates what it calls the housing wage — the earnings necessary to pay no more than 30 percent of your income on rent, the threshold usually used to define affordable housing — you would need to make $26.92 an hour, or $56,000 a year, to afford the apartment. If you held a minimum-wage job, a likely circumstance in a neighborhood where the poverty rate is 43 percent, twice the city’s on the whole, and median household income is just over $22,000, you would have to work 149 hours a week to meet the cost. Alternatively, you could clone yourself 2.7 times.

    As it happens, affordable housing was the subject of a mayoral forum last week at New York University. Democratic candidates all expressed the view that despite the Bloomberg administration’s ambitious and lauded affordable housing program — which has financed the preservation and construction of 165,000 units of low-, moderate- and middle-income housing — the city, at a time of record homelessness, soaring rents and stagnating wages, needs to do more and needs to generate affordable housing that is actually affordable.

    Two months ago, a report issued by the Association for Neighborhood and Housing Development, a consortium of neighborhood housing groups, indicated that out of the 38,670 units developed by the Bloomberg housing plan from 2009 to 2011, only one-third of them were economically within reach of households making the median income or less for the typical household in their neighborhood. Of the units the city developed over the same period, only about 8 percent were intended for households making less than 40 percent of the metropolitan area’s median income, though they make up nearly one-third of all New York City households.

    Another dimension to all this is what Alex Schwartz, a professor of urban planning at the New School, likens to a bathtub with a running faucet and an open drain. As the city builds new units of affordable housing, old units age out of the system. Much of the affordable housing isn’t meant to be affordable forever simply because it isn’t financially feasible, so rents go up, tax breaks expire and units nudge toward market rate. Last week, the housing development association issued new data indicating where existing affordable housing had disappeared or was threatened. In the University Heights section of the Bronx, 5,000 units of housing from 2008 to 2011 became unaffordable, with rents requiring incomes of more than 80 percent of the area’s median income.

    The New York City Housing Authority, where the average monthly rent as of this year is $436, offers permanent affordability, of course, but there are currently more than 167,000 families on its waiting list (and more than 123,000 families on a waiting list, now closed, for Section 8 federal housing vouchers, which have had their financing reduced by sequestration). One partial solution to clearing the backlog would be to relocate older residents living alone in large apartments in public housing to smaller ones and give over two- and three-bedroom apartments to the families who need them. “It isn’t all that complicated,” Christine C. Quinn, the City Council speaker and a Democrat, said at the candidates’ forum, “even though it isn’t happening.”

    Creating actual affordable housing, buildings that can pay for themselves in the absence of growing subsidies, will be a formidable challenge for the next mayor. John C. Liu, a Democratic candidate, proposes to do it with what he calls the People’s Budget, which he unveiled last week and which includes $27 million in housing vouchers for the homeless and $3.7 billion in capital funds to help create 100,000 units of affordable housing over a four-year period. He would finance these and other ambitions through tax increases on those making more than $1 million a year, charging rents to charter schools using city facilities and taxing private equity firms’ carried interest, to cite a few examples.

    Advocates and analysts in the affordable housing world have talked about addressing some of this difficulty by cross-subsidizing buildings, a process that would have a mixed-income building in the Bronx, for instance, helping to offset the costs of a primarily low-income building in Brooklyn. I would propose another form of cross-subsidization called the You Don’t Need to Live in a $50 Million Penthouse Tax, which would require anyone buying a property for more than $10 million (of which there are currently about 280 listed in The Times) to pay a percentage of that cost to an affordable-housing fund. And then commit, in writing, to never complain about it.

  4. #244
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002


    City's Boom Spurs a Need for Housing

    Report Calls for Developing New Housing for City's Population Boom


    In the coming decades, New York could confront a problem many cities would love to have: too many people and nowhere to put them.

    The city is expected to add one million more residents by 2040, but there likely won't be room for hundreds of thousands of them unless a small city of new housing is built, according to a report by a Columbia University think tank.

    The most logical location for all this new housing: the city's waterfront neighborhoods, including Long Island City and Willets Point in Queens, Red Hook in Brooklyn and the Financial District, according to the report by the Center for Urban Real Estate at Columbia University.

    Vishaan Chakrabarti, the center's director and an architect, said the city's current mega-projects, such as Hudson Yards on the Far West Side and Atlantic Yards in Brooklyn, represent only "a drop in the bucket" in terms of the amount of housing that is needed.

    "What surprised me most was the scale of the problem," Mr. Chakrabarti said. "It's a clarion call that we don't have enough housing."

    The report said the city would reasonably reach a population of more than 9 million in less than 30 years, with the authors predicting that New York will remain a magnet for immigrants, artists and young professionals seeking their fortune. The growth is slightly slower than that predicted by the Bloomberg administration, which has said there will be a million more New Yorkers by 2030.

    The report comes after nearly 12 years of large-scale redevelopment in the city. The Bloomberg administration has undertaken 119 rezonings, and a handful of high-profile rezonings have transformed industrial waterfront neighborhoods into residential areas with new 40-story towers.

    Bloomberg administration officials said they have tried to balance the character of neighborhoods, the preservation of open space and the capacity of an area's transportation networks to absorb more people.

    The Center for Urban Real Estate report's authors would pack more people into smaller areas than the Bloomberg administration has planned, placing them in waterfront real estate that is close to transit and to Manhattan, and has the potential for a high quality of life.

    "It's clear that we have to figure out how to develop our waterfront but in a smart and resilient way," Mr. Chakrabarti said.

    Whether residents want more apartments in their neighborhoods remains to be seen. In places such as Williamsburg where Bloomberg administration rezonings brought new residents, the result has been subway cars so packed that commuters wait for several trains to pass, lengthy kindergarten wait lists and promised parks that have yet to be delivered. The city has also yet to master the art of making tightly packed blocks of new glass towers feel like neighborhoods, rather than sterile enclaves.

    In downtown Brooklyn, local City Council Member Letitia James said the new development has driven out working-class families.

    "We've lost quite a few," she said. "We've done studies regarding parking, and yet no studies about the loss of affordable housing and the loss of moderate-income housing."
    In Lower Manhattan, where a number of office buildings have been converted into new apartments, local officials balked at the Center for Urban Real Estate report's notion of adding some 10,000 new units—unless the area gets more schools.

    The school-age population of the Financial District more than tripled between 2000 and 2010, U.S. Census Bureau data shows.

    "We have one ball field in Battery Park City, which was damaged after Sandy. The soccer season was completely eliminated. Thanks to elected officials, it was back online just in time for Little League," said Catherine McVay Hughes, chairwoman of Community Board 1.

    The Center for Urban Real Estate report's authors cautioned that the report is a planning tool and doesn't take into account the politics of zoning, which often requires the city and developers to strike compromises with the community on the bulk of new buildings.

    "Politically the big developments are controversial and there are a lot of people who say we don't want our neighborhood character to change," Mr. Chakrabarti said. "Who's the voice of the New Yorkers who aren't here yet?"

    Finding places for new people in the city isn't as simple as putting development in less-dense neighborhoods. More than a quarter of the city's housing is in single-family structures, meaning there's still plenty of room to go up to accommodate more people.

    But in many of those areas prices aren't high enough to justify the cost of building new 40-story towers. It's unclear, for example, whether there's enough demand for the 10,000 to 15,000 units the report said could be accommodated along Queens Boulevard, a 12-lane thoroughfare through the heart of the borough.

    That much of the development would be along the waterfront raises serious questions after superstorm Sandy, when residents in Lower Manhattan, Long Island City and Red Hook were out of their homes for weeks or months.

    The report's authors said the need to prepare for future storms is actually an opportunity to create new residential construction as well.

    "We need the infrastructure to prevent storm surges," said Jesse Keenan, the center's research director. "Why not build housing on top?"

    Population growth isn't a bad problem for a city to have. New York's has climbed to more than 8.2 million in 2010 at the same time that Detroit's population, for example, declined to 713,777, its lowest point since 1910.

    Still, the issue will pose a challenge for the city's next mayor. Under the assumptions in the report, the city will grow about 35% more quickly between now and 2040 than it did from 2000 to 2010.

    Without a road map for development, Robert Yaro, president of the Regional Plan Association, an urban planning think tank in Manhattan, said population growth would eventually become "a brake on the economic potential of the city."

    Citing Yogi Berra, he said, "The place will become so crowded that nobody will go there anymore."

  5. #245
    Chief Antagonist Ninjahedge's Avatar
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    Sep 2003


    Maybe people just need to NOT live in NYC.....

    I know that there is a concentration, but there is also a partial out-migration due to the density.

    If NYC can be maintained at optimal, with a constant pressure for more keeping land values high, additional development can occur in the surrounding boroughs of NY and NJ. Jersey City is seeing this now.

    I am not against NYC and increasing its population base, but maybe a more efficient network of city centers should be what we are reaching for rather than how many clowns we can get in one car...

  6. #246


    They should just simply upzone the entire city by 25%, and add development fees for new construction that would fund the building of infrastructure to support the added population. Intentionally don't include enforced affordable units in this upzoning. The property, income, and sales taxes generated by the new construction, and the new residents living in that construction, would fund the ongoing operation and maintenance of the new infrastructure.

  7. #247
    NYC Aficionado from Oz Merry's Avatar
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    Oct 2002


    NY's Rent Laws Get Extended; New Ones Still 'Far From a Deal'

    June 19, 2015, by Zoe Rosenberg

    Via Shutterstock/Zlatko Guzmic

    State lawmakers have agreed on one thing in the enormous debacle over expiring rent regulation and 421-a laws, and that's to extend their session, retroactively, by five days—which buys them until Tuesday to make some decisions. The extension gives lawmakers more time to hammer out the terms of an uncertain deal, and gives vulnerable tenants protection during the lapse.

    When the legislation ran out on Monday, rent-regulated apartments in theory became market-rate, but landlords are still beholden to their lease agreements with regulated tenants, of which there are believed to be about 2 million throughout the city. The Journal says that the Democrat-controlled State Assembly is looking to strengthen rent regulation laws so that fewer apartments can be moved to market-rate, but the Republican-controlled Senate is at odds with that plan, and wants to implement an income verification program for tenants in rent-regulated buildings.

    Both the rent regulation laws and 421-a tax abatement program are seen as well-intentioned policies in need of tweaks to eliminate loopholes and outdated sections. Mayor Bill de Blasio presented a revised 421-a policy to the State Senate that ultimately won the support of the pro-development Real Estate Board of New York, but didn't make it much further with the actual politicians. Other camps within the state government have also been rumored to be hammering out their own plans. The Daily News reports that state legislators said on Thursday that they were far from a deal.

    De Blasio and Governor Andrew Cuomo, both Democrats, have expressed contempt for the idea of letting the policies lapse, referring to a New York City without these regulations as "a nightmare," "the end of NYC as we know it," and paving the way for "pandemonium."

    Deal Reached to Temporarily Extend New York City Rent Rules [WSJ]
    New York Legislature Agrees to 5-Day Extension of Rent Regulations [NYT]

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