Report Shows Tenant Power
Helps Improve "In Rem" Housing
By Michelle Cotton
Tenant-owned cooperatives and buildings with significant
tenant organizing are the healthiest of the city's large
stock of tax-foreclosed ("in rem") residential buildings,
according to a report just published by the Task Force on
The report, entitled No More "Housing of Last Resort":
The Importance of Affordability and Resident Participation
in in rem Housing, examines current city policy for in rem
housing by examining it in relation to the history of this
stock, the latest data on the city housing market, and the
results of a survey of nearly 500 buildings in Brooklyn.
The Results of the Brooklyn Survey
The centerpiece of No More "Housing of Last Resort" is a
survey of nearly 3,000 Brooklyn residents living in nearly
500 currently or formerly city-owned buildings. These
residents were asked about their economic and social
background, housing experiences and preferences, and
community activities, and the results have been summarized
and published for the first time in this report.
The survey shows that the majority of the residents in
Brooklyn in rem housing are very low-income families who
depend on public assistance. However, it also illustrates
that these residents show underappreciated educational and
economic diversity, meaningful participation in their
buildings and communities, and strong interest in
information and potential for involvement.
Of the various city programs for the in rem housing stock,
tenant cooperative ownership was the one performing best in
Brooklyn. Tenant-owned co-op buildings were head and
shoulders above the others in terms of management quality
and building services, had many fewer problems with drugs
and crime, showed the greatest tenant satisfaction, and were
comparable to buildings in other sales programs in terms of
preserving affordable rents.
The program that performed the worst was city ownership
and management. Although providing more affordable rents
than the buildings in the reprivatization programs, it also
had the worst conditions, most problems, and least tenant
Community nonprofit ownership and landlord for-profit
ownership came out in the middle and varied the most in
performance from community board to community board. These
buildings seldom did as poorly as the city-managed buildings
or as well as the tenant cooperatives. Community nonprofit
ownership appears to have a slight edge over for-profit
ownership, outperforming it on some measures.
Tenant cooperatives also came out as the best-performing
program in a previous Task Force survey, involving nearly
3,000 residents of in rem housing in the Bronx in 1992. In
that survey, city ownership and management, although hardly
performing well, nonetheless outperformed for-profit
ownership and management. (Nonprofit ownership was not
assessed in the Bronx survey because there weren't enough
buildings in the sample to draw conclusions.) Another
consistent finding of both surveys is that tenant
participation and tenant organization correlated with better
building conditions and lower rents in all programs.
The Brooklyn survey was conducted by the Housing
Environments Research Group of City University of New York
Graduate Center, and administered and coordinated by eight
Brooklyn community groups under the auspices of the Task
Force. Funding and support for this effort were received
from the Brooklyn Borough President's Office, New York
Community Trust, New York Foundation, Morgan Guaranty, and
History, Economics, and Current Policy
The present dire housing climate -- with increasing poverty,
spiraling rents, and disappearing subsidies -- makes the in rem
housing stock a particularly precious resource, a stock of
apartments that could be used to blunt some of the ill
effects of the housing crisis. However, current city policy
both fails to exploit the potential benefits of this stock
and exacerbates its problems.
As the history of this stock illustrates, the city's
current moratorium on further seizure ("vesting") of
tax-delinquent buildings and its plan to sell off the
remainder of the in rem stock as rapidly as possible, mostly
to for-profit landlords, repeat previous approaches that
only turned out to cause greater dilapidation and distress.
City policy focuses on sale to for-profit owners and
places the fewest units into the tenant-cooperative sales
program. This approach runs directly contrary to the course
recommended by the results in Task Force surveys and by the
experience with the previous for-profit program, which was
discontinued as a result of abuses.
Sales programs, such as the Neighborhood Entrepreneurs
Program (NEP), also siphon funding away from the larger
portion of units under the city's "Central Management." The
city has made a conscious decision to concentrate its
maintenance and repair efforts on buildings that are
earmarked for sale. "Centrally managed" buildings, on the
other hand, receive a minimum of resources, personnel, and
commitment. The resulting unlivable conditions generate
misery and displacement.
Perhaps most disturbingly, the city is warehousing
apartments in central management in order to facilitate its
NEP program. To make the purchase of in rem buildings more
attractive, it is conveying a mixed batch of vacant and
occupied buildings to the NEP landlords, with the vacancies
available to be rented out at market rates. Thus, when a
family moves out of its centrally managed apartment, perhaps
due to unlivable conditions, the city is able to turn over
the vacant apartment to an NEP landlord, provides the funds
to renovate it -- and it can then be rented out at market rates
to new higher-income tenants.
Of course, it is also possible that these apartments will
not go to higher-income tenants, but to new low-income
residents who will have to pay most of their incomes for
rent. Thus, families may be made homeless by poor conditions
through the city's neglect of centrally managed buildings,
while their apartments may be likewise lost from the
affordable housing stock when they are reprivatized as
market rentals through NEP.
The Recommendations of the Report
Given the difficulty of changing city policy in the current
climate, No More "Housing of Last Resort" does not attempt
to make recommendations directed at city government.
However, it does suggest a course of action to help preserve
the affordability and increase the quality of this housing
- Emphasize tenant ownership. Task Force surveys show that
tenant cooperative ownership is the best of the
reprivatization programs and provides stable, quality,
- Increase tenant organizing. Task Force surveys show that
even for those buildings that are not tenant cooperatives,
an involved tenant population correlates with better
building conditions and more affordable rents.
- Don't neglect the large and vulnerable population in
centrally managed buildings. The majority of in rem
buildings remain under central management, not in any sales
program, while only a couple of thousand units can be
reprivatized each year. Improving the situation of the
tenants in centrally managed buildings is essential if we
are to prevent the homelessness that is being caused by the
poor conditions there.
- Monitor the implementation of the city's new plan. The
new for-profit disposition program, as well as other aspects
of this plan, replicate previously problematic approaches
and should be monitored for abuses and ill effects.
- Be ready to respond to the loss of Section 8. The likely
loss of further federal housing subsidies calls for creative
solutions to permit continued reprivatization of in rem
buildings, as well as consideration of the option of
continued public ownership of the in rem stock if necessary
to preserve affordability and prevent displacement.
The Task Force plans to follow up its report with
additional case studies of buildings that performed
particularly well and particularly poorly, possible forums
on the report findings, and a general distribution of
information and targeted provision of assistance to tenants
of the buildings that were surveyed.
For a copy of the report, please contact Theresa Brooks
at (212) 431-9700. Copies of the previous Task Force report,
Housing in the Balance: Seeking a Comprehensive Policy for
City-Owned Housing, are also available.