Tenants and Supporters Demand Preservation of 6 Queens Buildings in Physical and Financial Distress

July 29, 2013, Queens, NY—Congresswoman Nydia Velazquez, City Councilwoman Diana Reyna and State Assemblyman Mike Miller, attorneys and advocates joined tenants from six extremely distressed buildings in Ridgewood, Queens this afternoon. The group is announcing their plans to advocate for tenants’ rights in Bankruptcy Court and to ask Stabilis Capital Management, the mortgage holder on the distressed properties, to support proposals that will keep them permanently affordable. Tenants, who are suffering from leaks, mold, rodent infestation, falling ceilings, and a lack of basic plumbing, will also seek emergency repairs.

Landlord Ridgewood Realty LLC lost control of 1821 and 1894 Cornelia St., 1673, 1675 and 1726 Woodbine Ave., and 18-14 Linden St. to foreclosure in 2007 – but not before landing several of the buildings in HPD’s Alternative Enforcement Program and on Public Advocate Bill de Blasio’s Worst Landlord List. Due to a long history of neglect, the 36 rent regulated units – home to low to moderate income New Yorkers – have racked up a total of 549 code violations.

Ridgewood Realty filed for bankruptcy in September, 2012 as part of a move to retain ownership privileges. Tenants will be appearing in bankruptcy court with the help of pro bono counsel Cleary Gottlieb Steen & Hamilton, LLP and Queens Legal Services to advocate for their right to safe and decent housing.

“As a resident of 1821 Cornelia St., I am concerned about the future of these six buildings,” said Tenant Leader Denise Serrano. “I grew up in Williamsburg, and thanks to rising rents my family was forced to move. I raised my children in this building, and on behalf of myself and my neighbors, I do not want to see that displacement happen again here.”

Stabilis’s purchase of the mortgage notes on these six buildings mirrors a recent trend wherein companies, armed with private equity money, acquire debt on regulated rental properties. The properties are often severely physically distressed due to years of foreclosure, and are often located in New York City’s gentrifying neighborhoods. Tenants and advocates fear that these acquisitions closely resemble speculation in the market before 2008, when private equity firms purchased large portfolios of rent-regulated apartment buildings, leading to foreclosure and mass deterioration of the housing stock. Today, tenants, elected officials, and organizers are calling on Stabilis Capital Management to break with this pattern and support the transfer of the properties to a non-profit developer who would provide extensive physical rehabilitation while keeping the properties affordable in perpetuity.

“Stabilis must repair these buildings or sell them to a good developer who will” said City Council Speaker Christine C. Quinn. “Whether these homes are in foreclosure or bankruptcy court, Stabilis’ obligations to provide services to tenants remains the same.  I want to thank Congresswoman Velazquez, Councilmember Reyna, UHAB, Legal Services, HPD, and especially all of the tenants for their hard work to save these homes.”

“These buildings must be transferred to an owner who will rehabilitate them and keep rent affordable,” said Congresswoman Nydia Velazquez. “Tenants have suffered enough already because of poor managerial decisions.” 

“We can’t keep letting these vicious cycles sent buildings deeper into distress. Whether they live in a building in foreclosure, a building in bankruptcy or not, all tenants have the right to safe, decent housing,” said Public Advocate Bill de Blasio. “When properties get this bad, we need everyone to come to the table – including banks and lenders – to put them back on sustainable tracks. Tenants deserve nothing less.”

“I’m here today to support my constituents and neighbors who have been suffering from these horrific and unimaginable living conditions for over five years,” said Assemblymember Mike Miller. “I support the transfer of these properties to a non-profit developer who would provide the necessary repairs while keeping the rents affordable,” continued Miller.

“The blight and distress of these properties is not only hazardous to the wellbeing of the families who live there, it also threatens the stability of the surrounding neighborhood,” said HPD Commissioner Mathew M. Wambua. “We are resolved to use our resources and enforcement tools, such as those in the Alternative Enforcement Program, to keep the pressure on negligent landlords and owners to ensure that these tenants get relief and the quality of housing that they deserve. We thank our elected officials for their partnership and support in working to end the cycle of overleveraging and distress that has plagued these buildings.”

“The tenants in these six properties have suffered at the hands of predatory equity groups for long enough,” said Kerri White, Director of Organizing and Policy at the Urban Homesteading Assistance Board. “We have an opportunity to transfer these properties to a responsible housing developer who will not only keep the buildings affordable, but will give tenants decision-making power in managing their homes. Today, we are calling on Stabilis to break the cycle of neglect, foreclosure, and speculation, and give these buildings back to the tenants who call them home.”

“The conditions in these buildings represent an investment strategy that targets rent-regulated tenants in an effort to remove them from their affordable homes,” said Ann Ascher, Director of Housing at Queens Legal Services, a program of Legal Services NYC.  “Distressed building portfolios such as this one exist across our city, reducing the availability of affordable housing for all New Yorkers. For more than six years, these tenants have been living in deplorable conditions while a foreclosure case drags on with no end in sight. While the court appointed a receiver to take care of the buildings, over 500 outstanding violations still remain on record, and as a result many apartments are uninhabitable in a City where thousands of low-income tenants search in vain for affordable housing. With the help of Cleary Gottlieb and UHAB, we are committed to seeking lawful relief for these tenants and to preserving the stability of New York neighborhoods.”

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