It is good to elect, in this case, a councilman that has a completely different outlook on the same problem.

To this blogdiva and Eyore stan, the strategic foreclosure of Stuyvesant-Town & Peter Cooper is a sign of the coming affordable housing apocalypse. Yesterday on a quick conversation with Garodnick and his staff, I got a completely different outlook.

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Tishman-Speyers is walking away from the 56 residential buildings, 11,250 apartments, and over 25,000 residents that live in the properties it bought for $5.4 billion in 2006. Yes, they are walking away as in handing the keys to whomever and bidding adieu.

Strategic defaults are nothing new. Billionaires do it all the time. The issue here is that companies like Tishman-Speyer get to walk away from bad deals; whereas the regular family with a hefty mortgage and lost equity is made to believe they have a moral obligation to continue funding what is a bad financial proposition that no corporation would ever honor themselves. Which is why I absolutely agree with the tone of Michael Corkery's Tishman Speyer’s “Jingle Mail” on Stuyvesant Town outrage over at, of all places, the Wall Street Journal:

Where is the outrage?

[...]

Real-estate developer Tishman Speyer is handing control of the Manhattan apartment complex Stuyvesant Town and Peter Cooper Village to lenders that backed the $5.4 billion acquisition. With the massive property underwater and Tishman having put only $112 million of its own money into the deal, it makes more sense for the Speyers to walk away from the apartments.

Like residential home owners, Tishman Speyer Group calculated that it could take decades to regain the equity lost on its property.

Similarly, Tishman Speyer has calculated that complicated tenant laws in the New York could prevent the company from profiting on the development for many years. (The company’s strategy depended on being able to evict lower paying tenants and replace them with young professionals.)

Yet while residential homeowners are being attacked for not making good on their mortgages, Tishman Speyer has so far avoided such criticism.

As a Stuyvesant Town tenant I am not shocked with this bit of news. From years there had been rumors that Tishman-Speyers, which has helped New York University amass its real estate empire, was going to buy the place. Of course, the rumors started when MetLife entered into a housing agreement with the univeristy and literally slumlorded apartments into hipster fire hazards. Actually, it was thanks to New York University's business that MetLife and Tishman-Speyer got away with illegally vacating and renting at market prices rent-controlled apartments; especially in Stuyvesant Town (where we snarkily renamed the place NYU's dormtown)

Rent laws prevent Tishman-Speyer or any new owners to evict us, but it still feels surreally insecure to be in the middle of one of the biggest real estate failures in the history of the Unites States. Stuyvesant-Town & Peter Cooper were the third largest real estate sales in this country. It goes to show that when it comes to affordable housing for the grey collar working and middle classes of New York City, you cannot leave it to the vagaries of the mythical "free market". And this is why Tishman-Speyers epic failure is Michael Bloomberg's failure as well.

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Dave Smith, the long-time leader of Penn-South -- the union sponsored housing development in the Chelsea section of Manhattan -- died at 90 a few days ago. A New York Times obit is here . He'd been sick for a long time. An obit and report from an informal memorial gathering appeared in the Villager, here

Mr. Smith, whom I knew, but not well, over many years, emerged as the key figure in the struggle to keep the Penn-South as a non-profit cooperative. As union-built coop housing (Seward Park, Hillman Houses) became market-rate housing for wealthy New Yorkers, Penn-South stood for the principle that affordable housing should be maintained. The union members and other tenants of the development gave up, under Dave Smith's leadership, the possibility of personal profit so as to allow other low and moderate income people to move in. His active leadership continued into old age. He opposed Mr. Bloomberg's West Side Stadium . As The Villager reported: "Dave Smith, 85, former president of the Penn South Co-op in Chelsea, epitomized local sentiment. “If they would use this money for education and affordable housing instead of a stadium it would go a long way to keeping the city strong and preserving the neighborhood,” Smith said."  read more »

In Starrett City, Brooklyn, and in front of a few hundred adoring residents, Hillary Clinton was in fine form today. She was at a rally, to support the passing of a bill by Democrats in both the Senate and the House of Representatives, which seeks to preserve affordable housing initiatives in the country. Congressman Ed Towns, who has introduced legislation that specifically deals with saving the affordability standards of the Starrett City housing development, was also on hand to speak to the concerned residents. Starrett City is the largest development of its kind in the nation. For the past two years or so, the residents have been embroiled in a battle with the old-owners, who were intent on selling the complex to a group of speculators.

Mrs. Clinton was given a rousing welcome by the mostly female audience, and was fired up as she demanded President Bush sign the bill into law. She spoke well of Barack Obama and his presidential bid, projecting that she was presently a strong supporter of his effort. Standing with her (beside congressman Towns) were Brooklyn’s ebullient Borough President Marty Markowitz, Assemblyman Vito Lopez (the county leader of Brooklyn’s democrats), Congressman Anthony Weiner, plus the district leaders of the 40th AD and some tenant activists of the development. Notably absent was the council member for the area: Charles Barron.  read more »

Bumped - Bouldin

The Rent Guidelines Board will meet this evening to determine the Rent Guidelines for 1 and 2 year rents, in the City.

As a housing advocate fighting for affordable housing and helping displaced tenants through the gentrification process that's effecting various neighborhoods like Williamsburg/Greenpoint, in Brooklyn and many other neighborhoods,in the city, we must impact the RGB.

As spokes person for UNO (United Neighbors Organization),let me begin by making 2 points. First the city is in an affordable housing crunch losing 71,000 rent stabilize apartments, in the last thirteen years, to vacancy decontrol, and 40,000 due to coop condo conversion. In the last sixteen years over 40,300 of the cities subsidized apartments were lost. 26,000 of which were buy outs, in the cities Mitchell-Lama housing. If it wasn't for the 42 city council members override, of the Major's section 8 veto, more affordable housing units would never have been realized.

Second the RGB should also consider the fact that landlords income have increased as shown by the 2008 Income and Expense report conducted by this very RGB, for years 2005 to 2006. It clearly shows that increase in income outpaced increases, in operating costs of landlords.

In order to preserve affordable housing and not contribute further, to the lost of affordable housing especially, for low to moderate income families, the board should consider passing the lowest guidelines possible.  read more »