REPAIRING THE HUD SCANDAL, CITY SELLS FIRST PROPERTIES

Print More

More than four years after a massive federal housing scandal left hundreds of buildings abandoned across New York, the city’s housing agency last week announced its first round of ambitious plans for fixing up the properties. It will sell 56 to neighborhood housing groups and 23 to private developers.

A total of 593 buildings with more than 2,000 apartments were caught up in the 203(k) debacle, through which mortgage lenders, realtors and appraisers conspired to defraud the federal Department of Housing and Urban Development. In late 2001, HUD and the city Department of Housing Preservation and Development announced a $130 million plan to fix up the abandoned buildings through the city’s existing housing programs.

As part of its plan for the properties, HPD will sell 11 buildings in Bushwick and Brownsville to private developer Loewen Development and the Mutual Housing Association of New York, the housing development wing of ACORN. Together, they will rehab the apartments under the city’s HomeWorks program, through which developers fix up small buildings and sell them via a lottery to interested homebuyers.

ACORN housing director Ismene Speliotis says she’s “happy” that HPD is awarding her group the buildings, but she hopes to convince the agency to let it sell the rehabbed properties exclusively to homebuyers with limited incomes. MHANY has put together financing to make them affordable for families earning as little as $32,000 a year.

“We want to sell these to people whose income reflects the income levels of these communities,” said Speliotis, “instead of using them to fuel gentrification.”

A much larger controversy is brewing around the fate of several dozen other 203(k) properties in Harlem and Bushwick, which HPD has yet to sell. Tenants of these buildings have asked the city to give their buildings to nonprofit groups that want to form low-income cooperatives.

Other organizations seem to be interested, too, however. According to Michael Figueroa, a tenant at 432 Jefferson Street in Bushwick, a staffer from Ridgewood-Bushwick Senior Citizens Council, a local nonprofit housing group, knocked on his door last week and told him she was there to “‘organize the tenants.'”

“I told her we’re already organized,” said Figueroa, whose building, along with 17 others in the area, has asked to create cooperatives with the Urban Homesteading Assistance Board. “I’m president of the tenants association!”

Figueroa and his neighbors fear HPD may award the buildings to Ridgewood-Bushwick because of its connection to local state Assemblymember Vito Lopez, who chairs the assembly’s housing committee and founded the organization.

HPD says it will make decisions on roughly another 250 buildings, including those in Bushwick, over the next few months.