The Community Service Society of New York
10/01/2024 | Press release | Distributed by Public on 10/01/2024 15:04
Testimony: The Housing Rescue and Resident Protection Act
October 1st, 2024
Testimony: The Housing Rescue and Resident Protection Act
Iziah ThompsonOksana MironovaSamuel Stein
Thank you, Chair Sanchez and the New York City Council Committee on Housing and Buildings for holding this hearing. Our names are Iziah Thompson, Oksana Mironova, and Samuel Stein, and we are senior policy analysts at the Community Service Society of New York (CSS). For over 175 years, CSS has advocated for low-income New Yorkers. Throughout that time, we have maintained a focus on housing affordability, quality, and stability.
We are here today to testify in support of Intro 1063, the Housing Rescue and Resident Protection Act (HRRPA), which is the first step toward reforming the Third Party Transfer (TPT) program. Expanding the definition of distressed properties, increasing outreach, and ensuring that low-income homeowners are able to stay in their homes are all vital to improving TPT.
Definition of Distress
TPT should only apply to properties where residents are suffering from substandard living conditions as a result of poor management and financial distress.
HRRPA creates a more targeted system, capping eligibility to the top 500 properties, "when multiplying the property's municipal debt by the property's total open hazardous and immediately hazardous maintenance code violations." While this is broadly a good definitional change, we'd encourage the process to be purely driven by eligibility criteria.
We recommend adding additional categories to the definition of distress, including:
- HP Actions/Harassment/ Department of Housing Preservation and Development (HPD) Housing Litigation Division (HLD) actions
- An accounting of lis pedens and outstanding foreclosures
- Inclusion of a property in AEP and 7A
- Increased lien to value ratio
- Repeat listing on the lien sale list
Vacant land and unoccupied buildings should also be included under the definition of distress, no matter their tax class or violation count, and should not be counted toward TPT's property cap. These types of properties should go through the in rem process and transform into social housing, including home ownership opportunities.
After changing the definition of distress, we recommend that HPD update its criteria for pulling properties into TPT, to align with the new definition.
Outreach
We'd encourage the HRRPA to include further changes to owner and tenant engagement. HPD should greatly increase outreach in neighborhoods known to be affected by municipal foreclosure, which has had an outsized impact on Black homeowners in neighborhoods like Ocean Hill and East New York in Brooklyn, and Jamaica in Queens.
In addition to letters and calls, HPD should ensure that homeowners receive several communications through multiple channels, and in multiple languages, with a direct and clear explanation of the lien sale process and available offramps. Ideally, every homeowner at risk would receive an in-person visit.
This level of communication can be augmented by monthly workshops in neighborhoods shown to be affected by the lien sale and where take up of property tax exemptions is low.
HPD should provide extra support services to HDFC cooperatives in danger of foreclosure, with a focus on buildings with expired tax exemptions. At a minimum, the bill should require that a majority of shareholders and/or the elected board meet with HPD to discuss the possibility of a retroactive exemption, before foreclosure is pursued.
Tenant and Social Ownership
The tenant ownership portion of HRRPA-which instructs HPD to provide notice to tenants on the in rem foreclosure program and how they can apply for eventual ownership of the property-is a strong step towards resident control and stability. However, it could be improved by providing tenants in distressed buildings with a right of first refusal, giving tenants the opportunity to reclaim their properties, often after decades of landlord mismanagement.
Further, as drafted, the bill requires HPD to "consider whether" a third party applying for property disposition is a "responsible legal tenant, not-for-profit organization, neighborhood-based-for-profit individual or organization, or community land trust." This language should be strengthened to prohibit awarding property to a for-profit entity unless no tenant, not-for-profit organization, or community land trust has expressed a willingness to partner with HPD on redevelopment.
We'd encourage HPD to prioritize sponsors that champion permanent affordability, locking in public benefit in perpetuity. These include community land trusts and tenure models like limited equity cooperatives.