EAST SIDE TENANTS SUE TO CO-OP OUT OF HOUSING SALE

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A group of Manhattan tenants is challenging the legality of the housing department’s Asset Sales program. According to them, the program stacks the deck against tenants who want a chance to take over their buildings and run them as low-income co-ops.

Under Asset Sales, the city sells apartment buildings it owns to landlords or tenants at market rates. The buyers receive no government funds to finance the sale or rehabilitate the properties.

When a building is placed into Asset Sales, its tenants first have 90 days to purchase it. If they don’t want it, or can’t scrape up the money, the department can sell the building to a developer. So far, the Department of Housing Preservation and Development has sold 14 buildings through the program, half of them to tenants, according to a spokeswoman.

But critics of the program charge that it forces low-income tenants into a rush to learn about the sales process, organize their buildings, negotiate with the department and find a way to finance the purchase.

“The gesture of 90 days is a false gesture of cooperation,” said Harlem Councilman Bill Perkins, whose office has received several complaints about Asset Sales. Tenants and housing experts also say that no matter who buys the building, the rents will likely go up. If the tenants buy, they may face sharp rent increases to pay for mortgages or repairs. If the building is sold to a private owner, the new landlord is allowed to raise rents up to market rates after two years.

In a recently filed lawsuit, tenants at 230 East 95th St. claim that HPD has targeted their building for Asset Sales while denying them the choice to participate in another, more affordable option, the Tenant Interim Lease program (TIL).

“That TIL program, they keep it as if it were invisible,” said Johnny Moreno, a resident of the building.

According to the lawsuit, HPD gave the tenants a chance to buy the 16-unit brownstone for $255,000, without any financial support to fix dangerous conditions in the property. The tenants, most of whom pay monthly rents of $200 to $300, say they tried desperately and unsuccessfully to find financing and prevent the sale to a private owner.

Meanwhile, the city has rejected their petition to go into the TIL program, which would have established a tenant cooperative with low rents and city subsidies. The lawsuit claims that HPD employees “told the tenants that they were not eligible for TIL due to the location of their building in a ‘prominent neighborhood with great opportunities.'”

Tenants of another building, on West 92nd St., say they heard a similar explanation last November when their building was slated for Asset Sales instead of TIL. Lourdes Rivera, a longtime resident of that building, said that when she asked why TIL was not an option, a housing official answered “forget that, because this is not a distressed area.”

“It is not a distressed area, but we are distressed tenants”, said Rivera. “I believe it is unjust on the part of the city to tell a group of minority tenants ‘either you buy or you go.'” Her building has now been taken out of the Asset Sales Program and will be placed into TIL.

The lawsuit by the East 95th Street tenants also charges that neither the Asset Sales Program nor the TIL program has any formal rules, in violation of the City Charter. The case is pending before State Supreme Court judge Elliot Wilk.