FOR IMMEDIATE RELEASE: December 13, 2005
With Christmas Around The Corner HUD Is Scrooge, Will Force Up To 335 Poor Families Out Of Their Harlem And Bed-STUY Homes And Into The Cold
Despite Years of Cooperation, NYC Intervention, HUD Refuses To Renew Section 8 Contracts Leaving Affordable Housing Developers Unable To Afford Loans and Residents Out In The Cold
Schumer, Rangel, Abyssinian Development Corporation, and Urban Homesteading Assistance Board Call on HUD To Live Up To Its Commitments To Help Repair Neglected Buildings
Schumer Just Passed Law To Remedy Problem
Senator Chuck Schumer, Representative Charlie Rangel, Reverend Calvin Butts of the Abyssinian Development Corporation (ADC), and Andrew Reicher of the Urban Homesteading Assistance Board (UHAB) will call on HUD to renew project based Section 8 contracts for two developments in New York that have been recently transferred from slum lords to responsible managers for renovation. HUD waited until the November 30th deadline to announce that it would not extend the Section 8 contract for Ennis Francis. HUD refused to renew Gates-Patchen’s contract on August 30th just six weeks after transferring the property to UHAB. This doomed years of work by ADC and UHAB, and destroyed the non-profits’ ability to renovate the neglected properties. ADC and UHAB cannot afford to maintain the buildings, let alone renovate them to code if HUD does not grant this administrative renewal. Up to 335 families could lose their homes, despite the fact that HUD has been working for years with Senator Schumer and the developers to take control of the properties and put them back on track.
“With Christmas around the corner, HUD is Scrooge. Further inaction could force hundreds of families out of their homes during the cold winter. This would be terrible any time of year, but is doubly painful that this is the gift HUD is giving these families for Christmas,” Schumer said. “To add insult to injury, this decision by HUD is punishing success stories. In both cases tenant organizations took control of their own destiny and worked with HUD to find responsible developers to manage the property with dignity and give their families the chance for a better life.”
Ennis-Francis and Gates-Patchen are the two projects in New York City that inspired Schumer’s amendment to the FY 2006 HUD appropriations bill that mandates HUD renew all Section 8 contracts on all buildings post-foreclosure, which could save hundreds of thousands of affordable units nation wide. They are also the ONLY two projects in NY at risk under this policy since the Schumer amendment covers all similar situations in the future. The Schumer Amendment grants responsible developers an income source to continue operations and allow for renovations, without leaving the very residents HUD is supposed to protect out in the cold. HUD claims that the tenants will be eligible for Section 8 vouchers, but because of years of neglect and mismanagement, it is likely the buildings wouldn’t pass NYCHA standards for Section 8 vouchers, so the residents may not be able to continue to live there. Even if the residents were all provided with vouchers promptly, there aren’t that many available Section 8 properties in New York City to quickly accommodate over 300 families. Schumer’s amendment passed as part of the FY 2006 HUD Appropriations bill on October 20, 2005, and was supported by HUD Appropriations Subcommittee Chair Kit Bond (R-MO.) Many New York based housing rights organizations worked to make sure Schumer’s amendment had significant support such as New York States Tenants and Neighbors, Harlem Operation Take Back, Legal Aid Society and South Brooklyn Legal Services.
Both ADC and UHAB had made clear to HUD that they could not continue to manage their properties without an extension of the project based Section 8, informed HUD they would lose up to 70% of their revenue that enables them to pay their elevator operator, security, and heating costs going in the cold winter. Nevertheless, HUD decided at the last possible day, November 30th, that it would not extend the Section 8 grant for Ennis Francis. In the past 24 months, HUD has started foreclose proceedings on 2156 units in 14 buildings in New York City. Advocates estimate that there are an additional 79 buildings in New York City at risk of foreclosure due to failing physical conditions, which have a total of 16,767 units. Over 120,000 units of affordable housing nationwide have have lost their Project-Based Section 8 subsidy due to foreclosure over the past decade. In New York State alone 4,000 units have been lost in 49 buildings due to foreclosures over the past decade.
Schumer said, “There could be a light at the end of the tunnel for these families, and HUD is turning it off. The government shouldn’t be the Grinch. After years of painstaking progress, to turn around and slam the door shut on the very properties that inspired my amendment puts the tenants out in the cold – that is just callous when we should be acting in the Christmas spirit.”
Abyssinian Development Corporation worked with HUD and New York City to take possession of the Ennis Francis houses, which has 231 units, for nearly two years. Despite years of Section 8 project grants which mandate that the owner maintain the property to certain standards, and HUD’s yearly inspection of the property, Ennis Francis received a REAC score of under 15 (out of 100); the minimum NYCHA standards for failing is a 60. ADC reports there was open sewage in the hallways and drug rings operating openly. A resident spearheaded a tenants organization that worked with HUD and NYCHA to bring a civil 7A proceeding against the previous owners and eventually transfer the rights to the property to ADC. On November 1, 2004 Abyssinian Development Corporation was appointed the 7A Administrator for Ennis Francis Houses, making it the first time ever in history that a HUD building had an appointed 7A administrator.
Gates-Patchen’s Section 8 Contract expired on August 31, 2005 – 6 weeks after the transfer to UHAB. HUD has refused to renew the subsidy leaving the building operating at a 40% deficit since that time. Due to this income loss, the building is having substantial trouble covering operating costs. UHAB is falling behind on payments to its vendors including their Elevator Service Provider and their security company. UHAB is particularly worried about the upcoming heating season and its ability to keep the building heated this winter. If the building is converted to vouchers now, it is expected that the majority of tenants will be forced to move out due to housing quality standards rules (units will be fully compliant with HQS following the rehabilitation.) The residents of Gates-Patchen are working towards becoming a co-op. Converting to Vouchers now will jeopardize this plan and put both the project and the eventual cooperative at risk.
Estimated Number Of NYC Buildings At Risk of HUD Foreclosure And Units That Will Be Protected By Schumer Amendment
Borough Buildings Units
Brooklyn 39 5179
Bronx 19 3554
Manhattan 21 8034
Total: 16,767 Units
Over The Past 24 Months Building That Have Entered Into Or Been Threatened With Foreclosure
Ennis Francis (Manhattan) 231 Units
Logan Gardens (Manhattan) 103 Units
Target V Phase I (Bronx) 83 Units
Bedford Styvesant NSA II (Brooklyn) 131 Units
Remeeder Houses 260 Units
Sumet I (Brooklyn) 201 Units
Brookhaven I (Bronx) 95 Units
Renaissance Court (Manhattan) 49 Units
Thessalonica Court (Bronx) 191 Units
Gates-Patchen (Brooklyn) 104 Units
Magnolia Plaza/Saint Ambrose (Brooklyn) 102 Units
Pleasant East (Manhattan) 100 units
Total: Units: 1650
NOTES: **The list of failed REACs has been compiled from several sources, but should not be considered a complete list of troubled HUD properties in NYC.** This information is the most accurate and up-to-date that we have been able to access. However, the status of all buildings is subject to change and should be verified by HUD.