The city is tinkering with one of its programs to oversee badly maintained private housing, and the changes may put poor tenants at risk, housing advocates charge.
The 7-A program is a way for the city and courts to oversee run-down private apartment buildings without taking direct ownership. Judges appoint independent administrators for the buildings, who collect rent and plow nearly all the cash back into fixing the problems; the owner can only start managing and taking rents again when the judge okays it. A total of 170 buildings are now in the program.
Last month, the city Department of Housing Preservation and Development published new regulations for the program that will give new owners of 7-A buildings a major opportunity to hike rents and get breaks on city debt. These rules say that HPD can increase rents “to ensure adequate cash flow” for the new landlord, taking into account owner expenses like debt service, operating reserve, cleaning supplies-even the landlord's expected return on equity. Plus, all the liens on the building from old city debts will be cancelled after 15 years.
In exchange, the new owner must provide “adequate, safe and sanitary” housing for low-income tenants. (The definition for “low-income” here is very loose, including anybody who can't afford market-rate housing.)
And, unlike with other programs, there aren't any formulas or caps for the rent hikes. It's completely up to HPD to set the new rents: The city only must “minimize the likelihood” that tenants will get priced out of their apartments.
The changes worry tenant advocates, who have long relied on 7-A administrators to stabilize housing in poor neighborhoods. “A lot of advocates saw 7-A as an important anti-abandonment tool, and this would make people very cautious about using the program,” explained Legal Services attorney Dave Robinson, an expert in city policies on dilapidated housing. “They know it could lead to rent increase that advocates would have no control over.”
In a written statement to City Limits, the housing agency said it will “make every effort to balance the economic needs of the building (operating and maintenance costs) with tenant affordability issues.” But the agency would not explain what income limits might apply to the “low-income” designation, or why the agency won't set up a formula for the rent hikes.
The housing agency will hold a public hearing on the changes on May 15 at 10 a.m., at 100 Gold Street, Room 4V-2.