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City Puts On Hold Controversial Home Seizure Program 'Until Further Analysis'

Officials say Third Party Transfer Program may be outdated; residents say it erodes black homeownership, wealth
Third Party Transfer
(l to r) State Sen. Velmanette Montgomery, City Councilmember Robert Cornegy and Brooklyn Borough President Eric Adams answered questions from a packed audience at the TPT Town Hall on September 10, 2019 Photo: BK Reader

After months of embattled meetings, packed town halls and ongoing complaints by residents to elected officials, Third Party Transfer Program (TPT)-- a citywide program that sells off "distressed properties" in foreclosure and turns them into affordable housing-- may be getting a much-needed update.

New York City's Department of Housing, Preservation and Development (HPD) that runs the TPT will be placing the controversial program on hold, "until a working group has finished investigating it," said to HPD Press Secretary Juliet Pierre-Antoine on September 11.

Part one of our series on the growing problem of foreclosures in Brooklyn outlined the differences between deed fraud and the city's Third Party Transfer program, the two biggest causes of home seizures in Central Brooklyn. In part two of our series on deed theft, we looked at the "Deed theft bill" introduced by State Sen. Velmanette Montgomery, which aims to clamp down on fraudulent activities.

In this, part three, we look at where the program is now and the impact it has had on residents.

TPT, HPD, Third Party Transfer Program, Housing and Preservation and Development, Robert Cornegy, Velmanette Montgomery, Eric Adams, Town Hall, Juliet Pierre-Antoine
State Sen. Velmanette Montgomery speaks at the TPT Town Hall in Crown Heights

Mayor Rudolph Giuliani's administration introduced Third-Party Transfer in 1997, which enabled the City to transfer derelict, tax-delinquent buildings directly to nonprofits for rehabilitation and management. The program was designed as an alternative to the tax lien sale and spared the city from having to assume possession of buildings and take responsibility for remaining tenants.

But 22 years later, the program is proving problematic, as hundreds of million-dollar properties have been taken -- mostly from black, elderly homeowners in Central Brooklyn--in lieu of a tax lien or an overdue water bill. 

At a recent town hall on TPT held in Crown Heights on September 10, Sen. Montgomery stated what many of the residents have been echoing for years: The program is flawed, offering no restitution for property they've had in their family for decades and robbing them of generational wealth.

Cornegy agreed: "[These neighborhoods] are the highest gentrifying areas at this particular moment in history, and that can't be a coincidence," claimed Cornegy, chairman of the council's Committee on Housing and Buildings. "In minority communities, one of the only ways to build and transfer wealth is through the accumulation of equity in properties."

"We recognize that a program that was created in 1996 may not stand up in 2019," said Pierre-Antoine. "We're talking about reforming that law and revisiting the actual foundation of the whole program."

So, for now, the program has been frozen, said Pierre-Antoine, as the city mobilizes a working group to update and modernize their approach.

The Working Group will be co-chaired by HPD Commissioner Louise Carroll and City Council Housing and Buildings Committee Chair Robert Cornegy Jr. of District 36, representing Bed-Stuy and Northern Crown Heights. 

TPT, HPD, Third Party Transfer Program, Housing and Preservation and Development, Robert Cornegy, Velmanette Montgomery, Eric Adams, Town Hall, Juliet Pierre-Antoine
It was a full house at the TPT Town Hall in Crown Heights on September 10. Organizers had to begin turning people away.

However, many residents cast doubt on the intentions of the review board, claiming the program deliberately targeted Central Brooklyn residents, those who were most financially vulnerable, uninformed and where property values were greatest.

"It's funny how there's not one property listed by HPD as 'distressed' on Staten Island," said a resident at the TPT Town Hall. "You mean to tell me that there are no distressed properties at all in Staten Island?"

In response to claims by Brooklyn Borough President Eric Adams that the program is "racist," Pierre-Antoine said racial demographics were not a data set source for the program, and that the program doesn't intentionally target specific communities.

Part of the problem may be Chapter 4 of Title 11 of the New York City Administration Code which mandates the city look at unpaid debts on an entire block if even one property falls under TPT's criteria. 

Migdalia Rodriguez, a 68-year-old homeowner in Crown Heights, said she has always checked to see if any properties on her block of Union Street between Bedford Ave and President St have been placed under TPT since the city does a poor job of informing residents about the program.

In her neighborhood, affected homeowners are often elderly, isolated and embarrassed to talk about finances. Many live on social security or a pension, she said.

"Let's say, hypothetically, they owe $500. What senior has an extra $500?" said Rodriguez. "And did you knock on their doors? Did you send them a bill on time and let them know they were in arrears and these are the steps you can take? I don't think so."

Sherlivia Thomas-Murchison, one of the lead plaintiffs in a federal lawsuit against HPD, learned on April 26, 2016, the co-op apartment building she part-owned was placed under TPT. Here, she speaks out at the TPT Tow Hall.

There is a section on the homepage of the HPD website where NYC residents can enter their address and check the current status of their property. However, most people either are unaware there's a way to check and/or are elderly and unaccustomed to computers and navigating the Web.

She said the program made no effort to consider the actual people it targeted and their families' living situations. So, she knocks on her neighbors' doors and updates them on any news regarding the program.

"It is so unjust. It's so unscrupulous, the way it's being done," she said.

Sherlivia Thomas-Murchison, one of the lead plaintiffs in a federal lawsuit against HPD, learned on April 26, 2016, the co-op apartment building she part-owned was placed under TPT.

HPD transferred the four-story brownstone from Neighborhood Restore to Bridge Street Development Corporation. The property on 248 Madison Street in Bed-Stuy got caught in TPT's net because the program had already transferred other buildings on her block, she said.

After a year fighting the courts, she lost ownership of her apartment in March of 2017 and is now homeless, living out of her car. 

She claims Councilmember Cornegy was part of the problem, pointing to a section of the city code that requires "council review of a conveyance to a third party."

Section 11-412.2 of the NYC Admin code states that "prior to the execution of a deed conveying full and complete title" of a property to a "third party pursuant," the commissioner of finance shall "notify the council of the proposed conveyance." 

The section reads:

Within forty-five days of such notification, the council may act by local law disapproving the proposed conveyance. In the event the council does not act by local law within such forty-five day period, the council shall be deemed to have approved the proposed conveyance.

"We did not know our councilmembers had a 45-day review on these foreclosures and that they had already agreed to allow them to take our properties," said Thomas-Murchison. "They're not telling us this as the constituents. We found this out the hard way."

Still, Councilmember Cornegy has adamantly voiced his opposition to TPT, also calling the program "racist" at Community Board 3 meeting on September 9, according to Patch.

Thomas-Murchison said she doesn't take his public statements on the program seriously.

"Our council members are now going around as though they are getting properties back for us? It's a circus show," she said.

The office of Councilmember Robert E. Cornegy did not respond to requests for comment.

"We are here to say that the entire program is on the table," Pierre-Antoine reiterated. 

But what exactly will that mean? Community outrage has, no doubt, fueled the city's current decision to review and revise TPT. But will a reprise be enough?

And what about the damage that already has been done? What about all of the residents who already have lost their million-dollar homes over something as minuscule as a water bill?

What, if anything, will be done to help them regain their homes, their dignity, their wealth?