Tenants Protected in Big Bailout

Big Bailout Includes Tenant Protections

Organizers secured help for NYC renters.

By Dina Levy and The Partnership to Preserve Affordable Housing

There has been little reported about how the housing and credit crises are impacting affordable rental housing, particularly in NYC where speculative landlords and overzealous banks have placed unsupportable debt burdens on rent regulated and formerly subsidized housing.

Despite mixed feelings about the financial rescue package, a coalition of NYC housing advocates worked diligently to educate public officials about the need for renter protections as a result of this practice. The 1,200-unit rent-regulated Riverton Apartments in Harlem was the first multi-family deal to publicly unravel due to over-leveraging, but it won’t be the last. To date, the Partnership to Preserve Affordable Housing has tracked more than 500 buildings serving tens of thousands of renters which may be at risk.

When the enormous debt obligations behind these assets go bad, low and moderate income tenants will be left to suffer the consequences. The Partnership takes the position that any financial rescue package for Wall Street – which got us into this mess – must also provide protections for renters, who are innocent bystanders.

Thanks to the leadership of Senator Charles Schumer and Congresswoman Nydia Velazquez, two of the three policy recommendations advocated by the Partnership made it into the final bill. The first is a protection for tenants who have existing subsidies and/or rent protections, such as rent stabilization, ensuring that they will not be preempted by any federal action resulting from this legislation. The second is a requirement that loan modifications must ensure that a building’s finances can support decent, safe and sanitary living conditions based on existing rent levels. A third provision giving units of local government a first right of refusal in acquiring any buildings sold or transferred by the federal government was cut out of the bill during late-inning negotiations.

As important as these protections are, they represent a modest victory considering the scope and magnitude of this historic legislation. In terms of protecting New York City’s affordable housing stock, there is plenty more work to be done. Looking ahead the Partnership and our national allies will turn our attention to winning the kind of banking regulation overhaul that could have prevented this crisis in the first place.

Dina Levy is director of policy and organizing at UHAB, the Urban Homesteading Assistance Board. UHAB is a member of the Partnership to Preserve Affordable Housing, a coalition that includes the Community Service Society, Legal Aid Society, Pratt Area Community Council, South Brooklyn Legal Services and Tenants & Neighbors.