New York's Cooperative and Condominium Community
Bill Morris in Bricks & Bucks on July 20, 2022
It sounds like a story from the bad old days of early-1980s New York City. A landlord in Sunnyside, Queens, had neglected a rental building so badly that the city was moving to foreclose. But the long-time tenants, a mix of immigrants from Bangladesh and Central America, didn’t want to lose their homes, and so they banded together to wage an ongoing four-year fight to turn the building into an affordable co-op. The result: a $5.2 million rehabilitation loan from the Community Preservation Corp. — and a chance to seize the American dream of homeownership.
That story didn’t happen four decades ago. It’s happening right now, and it’s a reminder that the conditions that contributed to the tsunami of co-op conversions in the 1980s — neglected buildings and a shortage of decent, affordable housing — still exist today. And those conditions are still driving the occasional conversion of dilapidated rental buildings into thriving co-ops.
“We’re still creating limited-equity co-ops, but there are not that many ways for that to happen anymore,” says Arielle Hersh, a project associate at the Urban Homesteading Assistance Board (UHAB), a nonprofit that assists in the formation of affordable co-ops and provides residents with technical assistance.
When the city put the 20-unit building in Sunnyside on its foreclosure list, UHAB staffers started knocking on doors, leaving fliers, letting the tenants know about the building’s precarious situation. Ultimately, the tenants decided they wanted to become a limited-equity Housing Development Fund Corp. (HDFC) co-op. Of the more than 7,000 co-ops in New York City, about 1,200 are HDFC’s, and most of them were converted decades ago. In the past five years, only 11 rental buildings have been converted to HDFC’s. So that makes the Sunnyside project both an anachronism and a rarity.
“The city took possession of the property and gave it to an intermediary, a nonprofit called Neighborhood Restore,” Hersh says. “We then worked closely with the city’s department of Housing Preservation & Development, which administers the process.”
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The $5.2 million rehab loan will pay for a new dual-fuel boiler to replace the old oil-burning one; a new roof, windows and intercom; and upgrades to kitchens and bathrooms. Construction starts this summer and will run for about two years. In that time, UHAB staffers will hold training sessions with tenants, explaining that they will no longer be renters but will be shareholders in a corporation, with responsibility for running that corporation on sound business principles. It’s a lesson that many long-time renters have trouble digesting.
“We spend a lot of time talking about the governing documents, budgets and how the co-op is governed,” Hersh says. “We also teach them about management companies, unit resales, board elections and board responsibilities.”
All that is down the road. For now, there’s the lingering euphoria of closing on the rehab loan — and the anticipation of making the leap from renters to homeowners.
“It’s a great group of motivated, tight-knit people,” says Walter Blenman, director of co-op development at UHAB. “They’re very excited. There’s some fear, but we’ve done our best to explain what’s coming.”
Hersh adds, “Everyone’s excited now that the construction is about to start. We think of our work not just as housing development but as people development. We build the skills to help them run a cooperative.”
Tenants will be able to buy their apartments for about $2,500, and outsider prices will be below market rate. There will be caps on resale prices, set by HPD. The idea, so rare in this city today, is that nobody gets rich but everybody gets a decent and affordable place to live. And best of all, they’ll own it.
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