Tenants in the Bronx will soon be able to buy the apartments they live in for $ 2500 apiece: how is this possible

In the spring of 2017, a dozen residents of a small apartment building in the Bronx met at a bar next door to Port Morris. A few days ago, one of the residents slipped leaflets under the doors of her neighbors calling for a weekend meeting. That day, they were trying to figure out what to do with a new landlord who decided to raise the rent after buying a $4 million building. The New York Times.

Tenants paid about $1100 a month for studio apartments. Each had a conversation with Mr. Giddings. He knocked on their door, saying get ready for a $400, $500, $1000 rent increase. One of the tenants told her neighbors that their apartments could be rent stabilized. This would give them protection even if their leases don't state it.

Tenants began to offer their skills. One said he was a good writer. Another, a photographer, offered to document signs of the building's disrepair. Some said they could visit city and state government offices to collect information. Someone else had a friend at the government housing agency and could make a few calls.

The band has taken the first step in a five-year journey that should end with the departure of the landlord.

In 2019, Burnham introduced tenants to the City Homes Relief Council, a non-profit organization that supports HDFC and also helps transform them.
After the details were clarified, “We will win” became something of a mantra for tenants. Some paid for supplies such as a project management computer program, printing and mailing costs, and food and drink for meetings. Ms. Waterton said she turned down weekends with friends and family activities.

Mr Giddings was initially not interested in selling the building to tenants, but then the pandemic hit and the numbers changed. The courts closed, suspending any housing litigation Mr Giddings had brought against the tenants. And the proceedings with the state over whether construction is regulated dragged on for a year. Other potential buyers were also not interested in the litigation-related building.

Where will the tenants get the money to buy the building

Usually HDFCs are funded by public funds. But in 2020, the city had a limited workforce, a backlog of projects, and suspended its lending program due to uncertain market conditions caused by the pandemic.

Instead, UHAB took out a low-interest bridging loan from one of its donors. This is the first time a non-profit organization has used exclusively private funds to pay for such a deal.

Finally they made a deal. “UHAB offered the highest price and provided strong guarantees,” Giddings said in an email.

The nonprofit paid a landlord $2,6 million for the property in February 2022.

She plans to eventually hand it over to tenants, who will be able to buy their apartments for $2500 each. Over the past five years, 11 rental buildings have been converted into this type of limited liability cooperative called a Housing Corporation cooperative. In it, tenants buy their apartments at prices set by the city and can sell them for a limited profit.

The tenants closed the deal without any funding from New York, an even rarer victory. There are approximately 1100 HDFC cooperatives in the city. This is out of approximately 7100 cooperatives throughout the city.

On the subject: Homeowner in New York to pay tenants $ 1 million in compensation: what he did to them

The tenant feat comes at a time when rents are skyrocketing. And in parts of the South Bronx like Port Morris, speculative development is thriving. They fought a long and complicated legal battle, foiling numerous attempts by the landlord to evict them.

After all, Mr. Giddings said, selling the building was the best outcome. “I am happy for the tenants (who will soon become owners) and wish them success,” he wrote in an email.

“I look at it as generational wealth because I don't have a family yet. One day, when I have children, I can give the apartment to them,” said Claudia Waterton, another tenant. “It's something no one can take away. You can always come back to this place and say: "I did it, I achieved it."

The path to ownership has not yet been traveled

At least 80 percent of tenants must complete 12 hours of training at UHAB to learn how to own and manage a co-op. UHAB is also seeking property tax exemptions, which is critical to making apartments affordable.

Barring any issues, current tenants will be able to purchase their units for $2500 each. This is the discount given to them as the original shareholders who have done the work of transforming the property. City leaders will set prices for seven vacant apartments to be sold through the city's limited-income housing lottery. A similar apartment in Morrisania was recently listed for sale for $72.