The New Bronx Market

After Neighborhood Turnaround, HUD Seeks to Cash Out

The family had good times and bad there. Not long after they moved in, conditions began to slide. The managers stopped making repairs. In bad weather, the roof leaked and the windows flew loose from the sashes. Worst of all were the drug dealers and users who saw the building's lack of security as a business opportunity and set up shop in the halls and on the roof. Guity watched the light fixtures shake as the pushers raced overhead.

Her reprieve from these conditions began when HUD foreclosed on its mortgage and took over management itself. At the time, the Clinton administration, under then HUD secretary Andrew Cuomo, had a policy of rescuing ailing projects and spending the funds necessary to bring them back. A management firm schooled in rescuing troubled buildings took over. Elevators were repaired; new kitchens and baths were installed. The outside of the building was painted a cheery yellow enamel.

Last December, however, Guity paused in the lobby to read a page of fine print that had been posted near the mailboxes. It was in English, not Spanish, the language of most tenants. It announced: "Notice of Default and Foreclosure Sale." This was followed by a series of sentences beginning with the word "Whereas."

Tenant leaders Kathy Guity (left) and Clara Vasquez: They wanted  a resident-owned co-op in their building; HUD sold it to a landlord with a spotty record.
photo: Cary Conover
Tenant leaders Kathy Guity (left) and Clara Vasquez: They wanted a resident-owned co-op in their building; HUD sold it to a landlord with a spotty record.

For HUD, selling off Pueblo de Mayagüez is part of a nationwide drive to shed costly properties and recoup taxpayer funds. Continuing rent vouchers for residents will keep the complex affordable, officials said.

For UHAB and other groups pressing to hold on to affordable housing, the auctions are a wasteful scandal.

"Because of Ku's ridiculous purchase price, HUD will have to recalculate its Section 8 subsidies at the highest level," said Dina Levy, an organizer for UHAB. "It is going to cost taxpayers more over time, not less. Under our plan, rents would have cost less, not more."

The tenants haven't given up. The Legal Aid Society is pressing in federal court for a preliminary injunction against the building's transfer to Ku on the basis that HUD failed to provide a required 60-day notice to the residents. A hearing is to be held later this month.

UHAB is already working with another group of tenants, who may be next in the auction pipeline. A 36-unit building on Audubon Avenue in Washington Heights called Nueva Era Apartments is facing HUD foreclosure, and tenants there are considering asking that their building become a low-income cooperative.

HUD officials offered a glimmer of hope that future negotiations on foreclosed buildings could be more productive. "We are very open to talk about the transference of properties hereafter," said spokesman Glantz. "We are very interested in sitting down with the city and trying to work things out going forward."

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