To tackle the problem that worries New Yorkers most, Mayor de Blasio is implementing and aggressively promoting his $41 billion plan to build and preserve 200,000 affordable apartments over a span of ten years. Unfortunately, the majority of these apartments will be too expensive for many New Yorkers.

A third of the city's households have an annual income of less than $35,000, but only 16,000 apartments, or 8%, have been set aside for New Yorkers who earn $25,000 or less. Those figures include units that will be preserved, so new construction accounts for even fewer apartments that rent for under $1,000/month.

But hundreds of empty apartments in residential buildings stuck in a little-known Department of Housing and Preservation (HPD) program could be rehabilitated into permanently affordable housing for less than the cost of development on private land.

De Blasio's plan targets private developers who are trying to maximize profits—if the rents are set too low or if the number of affordable units in the building is too high, the administration argues, nothing will get built. For the de Blasio administration, the sweet spot is 30% "affordable" units, calculated according to incomes not only in working class neighborhoods, but in Westchester County as well.

"Is it enough? Of course not," Deputy Mayor Alicia Glen told skeptical City Councilmembers last month, before reminding them that "thirty percent of zero is zero."

It's true that the administration has few other options: the Urstadt Law prohibits the city from enacting more stringent rent laws without Albany's blessing, and a Clinton-era federal law prevents local governments from building any more public housing.

But a new approach for buildings in HPD's Tenant Interim Lease (TIL) program would generate more apartments for under $1,000/month on a project-to-project basis than open-market construction does.

The few low-income tenants who have been living in these HPD-run apartments would get funds for maintenance that they've been unable to afford for decades. Vacancies would be filled. And in rapidly gentrifying neighborhoods, the tenants would be protected indefinitely from rapacious development.



An apartment in a TIL building on 304 East 126th Street that's been vacant for years (Scott Heins/Gothamist).

Spread across 155 buildings, the apartments in the TIL program are the unintended leftovers of a bad legislative decision made during the fiscal crisis of the 1970s.

Facing bankruptcy, the City Council passed a law in 1976 that empowered the city to seize buildings whose owners had not paid property taxes for one year. The goal was to pressure delinquent landlords and increase tax revenues. Instead, many landlords in the city's poorest neighborhoods simply abandoned their properties. Ultimately, NYC acquired more than 100,000 vacant and occupied apartments.

"The city ended up creating, inadvertently, the second largest public housing system in the country," explained Harry DeRienzo of the nonprofit housing development corporation Banana Kelly.

Created in 1979, TIL was supposed to help tenants in the city's foreclosed apartment buildings organize as low-income coops. They'd learn the practical skills needed to run a cooperative, including building management, maintenance, and financial record keeping. Once a building's residents had adequate training, they could apply to purchase their apartments outright for $250.

But many of the buildings never made it that far.

"Their associations fell apart, or became mired in infighting," explains John Krinsky, a professor of political science at City College.

DeRienzo argues that the deck was stacked against these residents. "HPD gave them a roof and maybe a boiler and said, 'God bless you, be on your way,'" he said. "Over the years we've seen how people's incomes don't go up but their costs certainly go up."

Today, the program includes 2,422 residential units—1,525 occupied and 897 vacant. According to HPD, tenants in these buildings pay between $280 and $400 a month in maintenance fees, reflecting the rental market when they entered the program decades ago.

HPD has a plan to turn all of the TIL buildings into functioning low-income coops, using low-interest Affordable Neighborhood Cooperative Program (ANCP) loans. But the coop buy-in for ANCP buildings is $2,500, rather than $250, and vacant units can be sold to families making up to $100,680 for a family of four, edging out potential residents who make much less.

A group of housing advocates, homeless New Yorkers, nonprofit developers, and academics has recently made progress in convincing HPD that there is a better way to rehab and fill up the TIL buildings, through a pilot project called Gaining Ground.

They're currently working with five buildings in East Harlem (about 80 apartments between them, 27 vacant) that could, with unanimous tenant support, be renovated and permanently removed from the speculative real-estate market through a Community Land Trust (CLT)—a nonprofit that acquires and manages land, and empowers the tenants who occupy units on that land to jointly set the terms of its use. Most CLTs set a 99-year land lease mandating that buildings under their control cannot be sold for profit.

The advocates have also been organizing around the concept of a Mutual Housing Association (MHA), which allows tenants living in separate apartment buildings to cross-subsidize their rents and pool their utility and maintenance costs to save money.

While several MHAs are already established in NYC, only one hard-won example has the extra protection from speculation that a CLT offers—the Cooper Square Mutual Housing Association, established in 1994.

"The CLT model stems from the idea that homelessness is the result of land speculation at the neighborhood level, which leads to displacement," Krinsky says. According to a recent report from the Association for Neighborhood and Housing Development, only about 3,000 of the 20,000 affordable units Mayor de Blasio built or preserved in 2014 are permanently affordable. The rest rely on temporary subsidies that may only mandate affordability for a few decades—a serious concern in the face of rapid gentrification.

In a statement to Gothamist, HPD spokeswoman Melissa Grace confirmed that "HPD has been exploring the idea of Community Land Trusts." If all of the TIL buildings in NYC opted into an MHA/CLT, the city could create and preserve housing for more than 6,000 people.

One big appeal of the TIL buildings is that they are already owned by the city, and could be had for as little as a dollar. Habitable land is also a dwindling resource in NYC, and this approach doesn't involve building taller or more densely.

But like the city's NYCHA housing stock, many of the buildings are in rough shape. Some tenants feel ignored by HPD, while others feel abused.



Pedro Tirado, 87, inside his apartment at 304 East 126th Street (Scott Heins / Gothamist).

Paul James, 65, lives in the TIL building at 304 East 126th Street. James is blind, and navigates his sparse railroad apartment with a landline telephone hitched to his hip. He has no hot water, and the cabinets over his stove hang loose. But worse, he says, is living on the fourth floor. According to James, HPD relocated him to the walkup in January, in order to renovate his old apartment, another TIL building, a few blocks south. He wasn't given a choice.

"I proceed with caution," he said on a recent Tuesday evening. "I had one near miss. It's an accident waiting to happen." HPD declined to comment on James's case.

Three floors below, 87-year-old Pedro Tirado's apartment is crawling with roaches. His sink is rotting, and the kitchen floor tiles are loose and peeling. His nephew Flor Sanchez, 70, has lived next door since 1958. Sanchez is president of the building's tenant association, and juggles the minor maintenance and repairs he can afford on his building's meager funds.

"HPD, to me, they have too many buildings and they can't cope with the problems," he said.

In an MHA/CLT, residents pool their maintenance fees across buildings, and decide jointly how to allocate them. Tenants with disabilities can request apartments that suit their needs.

But the East Harlem buildings would have to undergo considerable renovation before they could function smoothly. It’s a complicated process, demanding broad tenant support and outside expertise.

"You've got a housing model, but then someone's got to work with the banks on the financing, work with the city, hire an architect and engineers, do a scope of work, bid out the work, oversee the construction," said Ken Wray of Community Assisted Tenant Controlled Housing (CATCH). "That's what we'd be doing."

Wray says that a typical "substantial rehab" costs about $146,000 per unit, and a gut renovation can cost as much as $280,000. Apply that cost to the 80 TIL units in East Harlem, and that's a total development cost of roughly $12 to $22.4 million. Federal, state and city subsidies typically cover between 60-70% of the renovation costs for a nonprofit building. Wray estimates that the taxpayer burden would top out around $8 million for an 80-unit rehab project, and around $16 million for a total gut renovation.

Taking into account insurance, utilities and repairs, it costs between $600 and $700 a month in maintenance fees to break even on an MHA apartment. Section 8 rental vouchers have been closed to NYC applicants since 2009. If the majority of the residents can only afford to pay about $300/month, additional permanent rental subsidies will be needed.

CLTs ideally bring in vacant lots that can be built up with amenities like affordable grocery stores. Commercial tenants could drive down residential rents.

But even without permanent rental subsidies or commercial rent, Wray thinks that he could set up an MHA affordable by NYC standards. One of CATCH's 87-unit MHAs has 33 apartments that rent for less than $650/month. Only one costs more than $1,000/month.

If all five buildings opted in, residents in the Harlem pilot would likely pay between between $300 and $650 a month, affordable for many of the city's poorest New Yorkers.

In comparison, the controversial 720-unit 77 Commercial Street project on the Greenpoint Waterfront has promised 200 "affordable" apartments, only 20 of which will be set aside for renters who make 50% of the AMI or less (that's $41,950 for a family of four). In exchange for the affordable units, developer Chetrit Group got $8 million in city funding.

"The more truly affordable the project, the more need for subsidy, and the fewer affordable units the city is going to produce," said DeRienzo. "It's all about choices, right? And based on people's choices, you get a sense of where their values are."



Flor Sanchez with his 96-year-old mother inside their TIL apartment at 304 East 126th Street (Scott Heins / Gothamist).

Gaining Ground organizers would like to deepen the affordability in the TIL buildings even further by redirecting some of the $125 million currently allocated for the decrepit and shameful cluster site housing for the homeless, which the mayor recently pledged to phase out.

According to member group Picture The Homeless, East Harlem sends more residents into the shelter system than any other neighborhood in Manhattan. Rather than continuing to pay $3,500 per month per homeless family, the city could invest more deeply in permanently affordable housing.

Many of the New Yorkers we spoke with for this story who have experienced homelessness said the CLT model was appealing because they believe it offers more stability.

"It's hard to keep a job in the shelter due to being moved," said PTH organizer Charmel Lucas, who is herself homeless. "Or you're a parent, and you find out that your child needs to change schools."

"There's no magic bullet here," adds Krinsky, the City College professor. "But with some of the money we spend on homeless shelters, if we use that to subsidize some housing that would be permanently affordable, that could not be speculated on but would remain a permanent part of NYC's affordable housing stock, that would be money much better spent."

Page 11 of de Blasio's affordable housing plan suggests that the city would be open to this possibility—to "shift funding from high-cost homeless shelters to lower-cost permanent housing."

Citing the "severe restrictions" on funding streams, mayoral spokesman Wiley Norvell insisted that DHS money can't subsidize affordable housing unless that project also includes a homeless shelter, and pointed to the Landing Road Residence in University Heights, which will combine a privately-owned shelter with 134 permanently affordable apartments.

"While it's nice to say, 'Hey let's just move this money from here over there' the rules don't let you do that," said Muzzy Rosenblatt, the director of the Bowery Residents' Committee which is leading that project.

Gaining Ground supporters are lobbying to change the rules. A few weeks ago, the group hosted a rally on the steps of City Hall. "The mayor passed us and basically ran," said Picture the Homeless organizer K Samuels. "He didn't even stop to say hello. In fact, his staff was trying to keep up with him because he has such long legs. He was like a jet."

In a few weeks, the City Council will vote on the mayor's affordable housing plan. Councilmembers from Harlem to East New York represent constituents who have been vehemently protesting the plan for months.

"What we're talking about here is the systematic erasing of the housing needs of many New Yorkers," said Picture the Homeless executive director Lynn Lewis.

"The beauty of our [Gaining Ground] plan is that it's not just about homeless people," echoed Samuels. "If you're creating this kind of housing, you are helping people who are now living paycheck to paycheck."

Flor Sanchez, who shares his railroad apartment at 304 East 126th Street with his 96-year-old mother and pays $302.50 a month, is excited about the possibility. Four apartments in his 10-unit building have been vacant for years. Recently, he said he has been cleaning up after squatters.

"It wouldn't bother me if I had to pay a few dollars more, because it helps the situation in the building," he said. "And if anybody can't afford it, let them pay a little bit less."

[UPDATE 3/15]: Picture The Homeless issued the following statement in response to the administration's comments about the allocation of shelter funds: