Dozens of Affordable H.D.F.C. Co-ops Facing Extinction

In the 1970s, with its finances and much of its housing stock in tatters, New York City began turning deteriorating buildings over to tenants to save their homes. The city charged $250 for many of these apartments and turned them into Housing Development Fund Corporation (H.D.F.C.) co-ops under the guidance of the department of Housing Preservation & Development (HPD). The result is tens of thousands of units of affordable housing in healthy co-ops across the city. 

But many H.D.F.C. co-ops have struggled to keep up with their tax and utility bills, and since 1997 the city has foreclosed on 74 co-ops, according to HPD, the New York Times reports. Three years ago, the city began taking action on another 111 co-ops as part of a roundup of hundreds of residential buildings that were in deep debt or disrepair. HPD says the co-ops on the foreclosure list each have an average $972,000 in debt and an average of 78 violations, such things as pests, mold, and lack of heat and hot water. 

Without intervention or finding a way to pay the city, the buildings will be transferred for $1 apiece to developers, who will have to pay the city $8,750 per unit. In exchange for a commitment to improve conditions and management, the developers will not have to pay arrears and will get tax exemptions. Once a developer takes over, the co-op will expire and owners will become renters again. 

One anti-foreclosure advocate called the arrangement “a handoff to developers.” Others cite good intentions but poor execution by the city, including the failure to help tenants with initial repairs, poorly worded leases with commercial tenants, and poor communication when co-ops were put on the foreclosure list. 

Some people, including some residents of the troubled co-ops, believe dissolving the co-ops might improve living conditions in the buildings. Mark Levine, a Democratic city councilman whose upper Manhattan district has eight buildings on the foreclosure list, disagrees, contending that the city should address its mistakes. “Many of [the H.D.F.C. shareholders] have no other assets other than their home,” Levine says. “This is working class. There are no 401(k)’s. For them to lose that, they’re not going to be better off.”