Closing Costs


Dora Casanas was 88 and ailing in late 2003 when she got word that the monthly rent on her Bronx apartment was leaping from $90 to $500. It was the first increase since 1984, when the city took over the property at 2084 Crotona Avenue but let Casanas, a resident for decades, stay there. The years took a toll. When the new landlord’s letter came, Casanas was confined to a wheelchair and suffering from arthritis, elephantiasis, and a pulmonary embolism, but still mounting the stairs to her pad above the auto parts store, where she lived with a widowed daughter and a son battling a serious illness. When the new rent kicked in, Casanas didn’t pay. The landlord filed an eviction notice, a judge settled the dispute, and Casanas moved to low-income senior citizen housing. Housing Court case 3773 was closed, just like thousands of other landlord-tenant beefs each year. What made Casanas’s saga different was that a city program triggered her exit from the place where she’d lived since 1967.

The program is called Neighborhood Homes, and since 1998 it has helped nonprofit developers around the city renovate scores of abandoned or neglected properties and sell them, primarily to low-income families who get assistance in making the buy. Under the program, the Department of Housing Preservation and Development (HPD) transfers each parcel to a qualified developer for $1 and awards a subsidy—up to $360,000 for the largest properties—to pay for renovations and a fee to the developer. Once the repairs are done, the developer sells the building and splits the proceeds 75-25 with the city.

Neighborhood Homes is the latest variation on a major theme of New York City’s resurgence since the 1980s: the rehabilitation of housing that was abandoned or foreclosed upon. And its timing couldn’t be better, as the city weathers a housing crunch and low-income New Yorkers struggle to maintain a foothold in the gentrifying city.

In the Bronx, most of the streets targeted by Neighborhood Homes don’t have to worry about gentrification just yet. People there are still dealing with the ravages of neglect, and bombed-out-looking houses are the most toxic aftermath. On an otherwise decent block, a single building that’s falling apart or boarded up can mean trouble—a home for rats, a hangout for criminals, a general sign that something’s not right. On a wrecked street, however, a single house that’s been neatly painted is a token of hope. Neighborhood Homes is designed to tilt that balance, and it seems to be working in places like East 168th Street, where Bronx Shepherds Restoration Corp. is showing a crisply sided two-story, or on Tinton Avenue, where next to a house that looks absolutely diseased, South Bronx Community Management recently sold a beautifully restored building.

But Casanas’s former home doesn’t merit such rave reviews. It’s one of some 300 properties targeted by Neighborhood Homes, and one of 10 awarded to Joe Cicciu, a veteran developer based in the Bronx’s Little Italy. Like most of Cicciu’s Neighborhood Homes properties, 2084 Crotona Avenue was deeded to the developer in June 2000. And like most of Cicciu’s batch of buildings (and despite $1.4 million overall in city subsidies), not much appears to have been done with it. As other developers around the city have fixed and sold the properties they were awarded, most of Cicciu’s are still waiting, appreciating in value thanks to the hot real estate market.

Since 2002, the appraised value of the parcels Cicciu has yet to develop has risen by an average 74 percent. The sales price of houses in Neighborhood Homes is based on the appraised value. So by design or not, the delays in rehabilitating Cicciu’s properties increase the likelihood that they will sell at a profit.

“That’s the market. It could have gone down,” says Cicciu. He insists that so far, all of the proceeds from his sales have gone to finish the work on the next property. “My desire was to adequately house these families. And if it took longer than normal, be that as it may.”

The woes of a mere 10 buildings might seem inconsequential in a city of 8 million people. But on the blocks where Cicciu’s properties are situated, they can mean the difference between blight and optimism. Blocks make neighborhoods, and neighborhoods make the Bronx. That’s why the blue tarp on Belmont Avenue is such a downer.

2045 Belmont Avenue
photo: Patricia Sener

Before it ends at Fordham Road, Belmont Avenue runs through East Tremont, an area that, to an outsider, looks a little rough in the daytime and downright bleak at night. A closer look down the side streets off of East 180th Street, however, reveals modest but solid-looking houses. Some have gardens in their tiny front yards. One has a colorful collection of religious statues on the porch. One of the buildings Cicciu was deeded to fix is at 2045 Belmont. There’s a narrow apartment building for sale next door.

“It’s hard for me to sell that property,” says Samuel Rivers, a realtor with a gift for understatement. The front of Cicciu’s building is shrouded in a blue tarp. The crinkly sheet ripples in the wind, revealing a burned-out structure behind. There’s debris on the tiny lawn. Buildings department records include a complaint about “an open and unguarded vacant home that was set ablaze” there, a reference to a fire touched off by a burning car in August 2004, four years after Cicciu accepted the building along with a subsidy of $40,000 to rehab it.

Cicciu received seven other properties in the same batch; two others came later. Two were sold last year and another in January. (Full disclosure: One of the buyers is a friend of mine.) Under his overall agreement with the city, construction was to be started in two months. But Cicciu has not filed a single building permit for work on the house with the blue tarp. The same is true for most of Cicciu’s properties under the program: no permits for 2084 Crotona, from where Casanas was uprooted; nor for the graffiti-stained house at 2124 Washington Avenue; nor for the boarded-up brick building at 1993 Morris Avenue.

Though he held it for almost five years and was granted $166,000 to rehab the two adjacent properties, Cicciu never filed a permit for work on 4555–4557 Third Avenue. In fact, after Cicciu sold that property last April, the new owner filed for permits to do $160,000 in work, including “remove debris left by previous tenants and water damage.” A glance inside reveals the first floor to be bare down to the studs on the walls. The buyer tells the Voice that there were delays of about a year in closing the deal on the building. But there were no surprises when she got the keys to the property, she says, and as for Cicciu’s team, “They’re very good people.”

At the other two properties that Cicciu has sold—after more than five years and $115,000 in subsidies—he applied for a sin
gle permit each: a $500 job to fix a waste pipe and a $2,000 installation of new gas pipes and meters. On the three parcels sold so far, HPD has earmarked 12 percent for Cicciu’s profit and overhead, as well as $10,000 for building permits that were apparently never obtained. The bill for the rehab work matters to homeowners because if they sell their parcel in the first seven years, they must repay a portion of the city subsidy.

An ebullient Belmont native, Cicciu’s no newcomer to the real estate game. Active in community work since 1973, he is associated in government records with more than 20 nonprofits—most of which administer buildings and involve HPD or HUD programs—with a combined 2004 budget of $6 million. He holds multiple real estate licenses. Over the years, his entities have handled more than $7 million in city work, and they currently shelter some 1,300 people.

Cicciu blames the delays on the need to relocate tenants who lived in some of the foreclosed properties—people like Casanas, who Cicciu says was unable to climb the stairs in an unsafe house with two elderly children and needed to move for her own good. He asked her to relocate, but she wouldn’t budge, so he sent the letter. “It was not so much to raise the rent,” Cicciu says. “It was to encourage her to please get out of there so it could be safe for her and her two children.” There were similar cases at other properties, despite what Cicciu says were his repeated offers of relocation. “They stayed in the property,” he says. “What were we going to do, throw them out?”

Asked why he had secured so few permits at the properties he is supposed to be rebuilding, Cicciu says the work that HPD approved often didn’t require any; it was “alteration work” and didn’t affect the certificate of occupancy on the properties. Some of the subsidy money went to contractors, but when the work was purely “cosmetic,” Cicciu says he used his own employees.

A buildings department spokeswoman says that a permit is required for any job on which licensed engineers, architects, or plumbers are required, even if the certificate of occupancy isn’t changing.

Fixing up neglected houses isn’t easy, and buying a house never moves as fast as it seems it should. Like Cicciu, other Neighborhood Homes developers say that existing tenants who refused to move caused substantial delays. Extra paperwork also drew things out. But HPD data show that about half the Neighborhood Homes properties have been sold, with developers doing so in an average of two and a half years. Cicciu has held his properties for roughly five.

Other developers who participated in Neighborhood Homes describe it as a great success. It has allowed them to save decayed
houses and put enthusiastic first-time owners—including some who had been homeless—inside. HPD is also pleased with the program and plans to put another set of properties on the block later this year. But that will likely be the last batch. “It’s basically done because the pipeline is pretty much exhausted,” says HPD spokesman Neill Coleman.

That’s quite a milestone: The city’s inventory of ownerless buildings, which once hobbled neighborhoods, is all but gone—a tribute to clever policies and a strong economy. But that overall success makes the few remaining distressed properties that much more important. They will help decide who gets left behind.

Cicciu tells the Voice he hopes to close with a buyer soon for another property on East 183rd Street. But, he says, the burned-out house at 2045 Belmont will have to be reduced almost to its foundations, eventually.

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