‘In Rem’ Tenants Try to Stave Off Sale, Save Homes
By Liz Wiseman

The tenants of 346 East 21 St. in Manhattan have been fighting for over five years to gain control of their city-owned tenement building and avoid having it sold out from under them to a private landlord. Due to Mayor Giuliani’ s new in-rem privatization plan, their battle might be coming to a disastrous end.

This building, at the corner of 21st Street and 1st Avenue, has been in “in rem” status for the last 16 years, since the landlord defaulted on his property taxes and title was returned to the city. Not surprisingly, the city has not proved to be the most solicitous landlord. The tenants have been forced to endure winters without heat and hot water, collapsing floors and walls, deteriorated wires, and incessantly leaking pipes.

In 1993, the tenants’ association—since named the Gerry Manning Tenants Association, for the slain artist who lived in the building—petitioned the city Department of Housing Preservation and Development in 1993 to enter the Tenant Interim Program. The TIL program exists to promote affordable housing and to help tenants purchase their apartments through city-sponsored subsidies. Under TIL the tenants of a building are trained to operate their building. They become responsible for setting rents and for all maintenance. After two years, title is turned over to the tenants under the status of low-income co-ops.

Two months ago, John Warren, an assistant commissioner of HPD and head of the Alternative Management Program, met with the tenants association and Community Board 6 to deliver the bad news: HPD would not commit TIL resources to 346 East 21 St. However, the tenants association was given first right of refusal to purchase the building at a cost of $1.5 million. The tenants were given 90 days to submit an offer to purchase the building, or it goes out to public offer. If the building was bought by a private owner it would still be rent-regulated. However, the tenants fear that the new landlord would escalate rents through “major capital improvements” (MCIs) and/or harass lower-paying renters.

The residents of 346 East 21 St. are a mix of domestic workers, home attendants, elderly and disabled individuals, with a median income of $7,400 per year. According to one tenant representative, there are only two families living above the poverty level. Their rents currently range from $100 to $300 a month. Apartments in the surrounding neighborhood have surpassed $1,500 to $2,000 per month.

“Even if we agree this is a fair price, proposing this amount as our purchase price is the easy part,” says Gerry Manning Association president Ed Delgado. The hard part will come when the association goes for a loan. Their limited collective borrowing power makes a $1.5 million loan from a commercial bank improbable. And the chances of finding public financing from the few remaining programs before the 90-day deadline are also slim. The tenants association still remains hopeful that their negotiations with HPD might prove fruitful. However, if they are unable to get the financing, the building will be turned over to the agency’s new Giuliani-created office, the Asset Sales division.