Milestone Step in Fight Against Predatory Equity

For the residents of ten overleveraged buildings in the Bronx, a recent court decision could mean a return to livable conditions for their families.

Over a year ago, owner Milbank Real Estate defaulted on its $35 million mortgage, leaving ten Bronx buildings, making up 554 units, in foreclosure. Since then, the buildings have reached unlivable standards, and residents have been forced to take court action.

This fall, UHAB’s Organizing and Policy team worked with the Northwest Bronx Community and Clergy Coalition and Baer Architecture Group to do an infrastructural study on Milbank’s ten distressed properties in the Bronx.  The report found over 3,200 housing violations, with an average of $26,500 repairs needed per unit. All told, Baer estimated that fixing all ten buildings will cost between $19.7 million and $24.7 million.
 
The program which created the report  was announced at a press conference at City Hall on September 23 with New York City Council Speaker Christine Quinn, Council Member Annabel Palma, Legal Services of New York City in the Bronx, the Northwest Bronx Community and Clergy Coalition, and UHAB.
 
At the event, UHAB’s Executive Director Andy Reicher stated, “Arming tenants with concrete information that allows them to better advocate on their own behalf is exactly in line with the self-help philosophy that is at the core of UHAB’s mission.  We... believe
that residents are necessary partners in the redevelopment of any distressed property, so this is a very important tool for the Milbank tenants.”
 
Just six days after the press conference announcing the findings, on September 29, a Bronx judge ordered LNR Property LLC, the servicer to the loan that oversees the Milbank buildings property, to pay $2.5 million for repairs within 30 days. This decision is a milestone step for the fight against predatory equity, as it is the first to hold bank accountable for paying for repairs on overleveraged buildings.
 
“It has huge implications for the more than 5,000 overleveraged apartments that are in foreclosure and in poor physical condition across New York City,” said Dina Levy, Director of Organizing and Policy.
 
UHAB is now working with Legal Services and Speaker Quinn’s office to bring both the architectural services and the novel litigation strategy to other tenants associations struggling with the effects of predatory investment in affordable housing.

For more information, contact Dina Levy at 212-479-3302.