Preaching to the (newly co-op) Converted

After a 20 year struggle, residents of the Elva McZeal Houses celebrate their conversion from renters to affordable-home-owners.

On August 17, residents of the Elva McZeal Houses celebrated their buildings' successful conversion from a project-based Section 8 rental to a self-governing affordable limited-equity cooperative. 

They kicked off their annual block party with a speeches and awards. Long-time residents recalled what it was like to live in a building so neglected by its for-profit landlord, cascading leaks look more like water falls, rats grew as large as German shepherds, heat and hot water were intermittent at best, and non-working elevators rendered the elderly virtual hostages in their apartments.

They have come a long way since then. The two buildings that make up the 142-unit Elva McZeal Houses were successfully converted to Williams and Georgia Towers HDFC, and now, with the assistance of UHAB, residents are becoming shareholders of their own affordable cooperative.

Councilman Charles Barron, who has been integral in the fight, spoke to the residents and accepted two separate awards for his outstanding involvement. Assemblywoman Inez Barron, the wife of the Coucilman, also talked about the importance of community involvement and praised the tenacity of tenant leaders like Dorothy Jones, long-time resident and activist and the HDFC's current board president. An award was also presented to Brooklyn Legal Services for their work in resting control of the building from the original corrupt and neglectful landlord.

A representative from the office of Brooklyn Borough President Marty Markowitz presented the HDFC with a proclamation and Ann Henderson of UHAB, who has worked with the buildings since the beginning, recalled the long battle Elva McZeal residents have fought, the rehabbing the building received while under UHAB's sponsorship and the hard work residents have put forward to secure the safety and future of their homes for themselves and their families.

A Brief History of the Elva McZeal Houses:

The federally subsidized two-building development located in East New York, Brooklyn. Constructed in 1971, the development’s original for-profit owner neglected the property while misappropriating federal funds. Conditions deteriorated and living situations became deplorable. But the residents banded together, organized a tenants association, and demanded improvements.

With the assistance of Brooklyn Legal Services, a groundbreaking lawsuit was filed against the landlord under the Racketeer Influenced and Corrupt Organizations (RICO) Act. The tenants won, and in 1995 ownership was taken away from the original owner and granted to the Elva McZeal Tenants Association. ARCO Management was appointed as the receiver remains today as the building manager.

At the time the Tenants Association took over, the buildings possessed over 500 violations for unsafe conditions and back taxes. Under the court appointed receiver ARCO Management, Elva McZeal HDFC began addressing these problems and improving building conditions. However, the transfer of the property as “deed in lieu of foreclosure” meant that the delinquent real estate taxes remained and continued to accrue. Despite the tenant association’s work, the property was listed in Round 5 of the City’s Third Party Transfer (TPT) Program in the summer of 2002.

In consultation with the Urban Homesteading Assistance Board (UHAB), the NYC Department of Housing Preservation and Development (HPD), the Federal Department of Housing and Urban Development (HUD) and Councilmember Charles Barron, the decision was reached to temporarily transfer ownership to UHAB. Ownership transferred from the HDFC on March 23, 2006, and UHAB became the buildings’ non-profit sponsor for the TPT program with the ultimate goal of converting the buildings into a low-income cooperative.

The scope of rehabilitation work included new elevators, new flooring, new bathrooms, roof work, plastering and painting, public hallway restoration, and upgrading all open space, parking areas and sidewalks. No tenant relocation was required during this work because vacant apartments were used as “hospitality suites” while residents’ apartments were under construction.

The tenant association Board of Directors was actively involved in the development/renovation process with UHAB and MDG Design & Construction, the construction contractor, reviewing and adding items to the scope of work, meeting with subcontractors, and keeping tenants informed about their future as a re-structured cooperative.

Financing for the renovation and related costs totalled $10,288,000, which was provided by the Low Income Investment Fund (LIIF) and HPD’s Participation Loan Program. Ownership of the property transferred to the newly formed Housing Development Fund Corporation (HDFC) on November 19, 2009. The residents chose a new name for their co-operative corporation, Williams and Georgia Towers HDFC.

UHAB provided the legal assistance in creating the co-op and getting approval from the NY State Attorney General’s Office. To date over 80% of the residents have signed purchase agreements and either paid the purchase price in full or entered into loan agreements to purchase shares in the HDFC co-op.