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Tenants at three Crown Heights buildings sat through a nervy auction where a New Jersey mayor outbid the field to take over their rent-stabilized buildings. He promised to preserve them; they hope he’ll turn them into cooperative affordable apartments.
In a sparse Downtown Brooklyn meeting room Wednesday morning, the auctioneer started spewing numbers.
The price was $140,000 and then it was $150,000. It was $200,000 and then it was $205,000.
As the price climbed, a group of tenants, huddled in the back row, watched nervously. Their homes were up for sale.
Bids flying in, they turned back and forth like they were watching tennis. The tenants were pulling for one of the bidders at the front of the room, a lawyer for a lien holder who promised to work with them on taking over management of the buildings themselves. The other bidder, lurking in the back, was a mystery.
“SOLD!”
A sigh of relief. All three rent-stabilized buildings sold to the tenants’ preferred buyer, a small-town New Jersey mayor who has pledged to preserve the housing, for just over $900,000 combined.
The nervewracking auction ended a saga that city officials called a victory for housing enforcement and the mayor’s promise to crack down on bad landlords—and remove them from ownership when they don’t comply.
“I’m so happy I can’t even think straight,” said tenant leader Angela Rougier-Marshall.
The three buildings along Eastern Parkway were owned by the Dukler family—a consistent presence on the city’s worst landlord list—and Iris Holding Group, according to reporting from Patch. At the time of the sale, the buildings had 995 open housing code violations on just 88 units, according to UHAB, a housing preservation group working with tenants.
The buildings went into the city’s Alternative Enforcement Program, reserved for properties with the worst conditions. Tenants began working with HOPE, a tenant organizing group, UHAB, and Brooklyn Legal services in 2018 and started a rent strike in 2022.
“These tenants have suffered long enough living under the Duklers, who routinely neglected and underinvested in their buildings,” said Department of Housing Preservation and Development (HPD) Commissioner Dina Levy in a statement.
The auction was run by the city’s sheriff, which seized the properties after a slip-and-fall legal judgement on the building’s ownership company, Rikud Realty LLC, which was half-owned by Sara Dukler, according to court documents. In a press release, the mayor’s office identified the former owner as Rubin Dukler.
An attorney for Sara Dukler told City Limits that she was not involved in management of the buildings.
Now, the Duklers are out and the new buyer, Mark Schwartz—an affordable housing developer who also happens to be the mayor of Teaneck, NJ—has promised to preserve the rent stabilized buildings and keep them affordable.
“We’ve been living in terrible conditions the past few years. We’re really looking forward to good things in the building—repairs,” said Rougier-Marshall.
“I’m trying to stay hopeful that Mark will deliver as he promised because the buildings need an excessive amount of work. I will put my trust in him and believe he will come through so we can put the Duklers where they belong: behind us,” she added in a statement.
Landlords and investors have been raising the alarm about the flagging sale prices of rent stabilized buildings, which they say are hard to make profitable because of rent stabilization laws that cap how much they can collect in rent, money they need for repairs.
But tenant advocates say landlords like the Duklers took risky bets in buying rent-regulated buildings with the expectation that they’d be able to pull units out of stabilization and charge more. After some 2019 rent laws closed off many paths to deregulation, some owners have struggled to keep up with maintenance needs in their buildings.
Sheriff’s auctions, however, usually involve already-distressed assets that new owners buy as-is, according to people familiar with the proceedings. Schwartz will be responsible for the existing debt, making investments in the building, and clearing the housing code violations.
Tenants and organizers want to turn the building into limited equity cooperatives where residents own and manage the properties and share governing responsibilities. They say Schwartz, the new owner, is committed to working with the city’s housing agency to do so.
Schwartz has agreed to forgive rent accumulated during the years-long rent strike and give tenants a voice in any rehabilitation, he told City Limits in a phone interview Thursday evening.
The Zohran Mamdani administration has been eagerly inserting itself in ownership transfers of older, rent stabilized affordable housing. Earlier this year, officials tried to stop the sale of the Pinnacle Group portfolio to a new for-profit owner, and backed a preservation bid for another East Harlem portfolio owned by Emerald Equities.
Mamdani’s housing plan calls for even more such interventions: transferring housing to community land trusts, affordable housing preservation nonprofits, and through the courts.
Organizers think the Eastern Parkway buildings will be a good fit for a new city program, “Our Home,” that will facilitate the conversion of rental buildings into resident-owned cooperatives.
“We will work alongside tenants and the new owner to put these 88 homes on a path toward stability and make clear that every New Yorker deserves a safe, well-maintained and stable place to call home,” said Mayor Mamdani in a statement.
Schwartz said he’s eager to do more preservation projects. “The only issue is that this is 88 units, and there’s probably over 100,000 units that are in the same situation,” he said. “The administration has come through and has recently hired more staff and has come through with increased capital, and let’s hope that continues.”
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