Foreclosures in Bronx Multifamily Sector in Diverging Fates

by Peter Vernon on cities

Foreclosures in Bronx multifamily residential complexes are facing divergent fates as some of them are already being rehabilitated and renovated while others are being ignored despite their need for emergency repairs.

The 25 multifamily buildings bought by Ocelot Capital Group at overly inflated prices during the 2006 and 2007 housing boom had two different buyers.

While the 14 buildings acquired by Omni New York LLC are expected to get immediate attention because of the record achievements of owners Mo Vaughn and Eugene Schneur in property rehabilitation, the buildings acquired by Hunter Property Management and partner Paradise Management are still awaiting any sign of concern from the buyers.

Megan Reed, an advocate working with the nonprofit Urban Homesteading Assistance Board which fought for the rescue of the 25 buildings, was frustrated at the attitude of the Hunter group.

Recently, a number of tenants of the Ocelot buildings held protests outside a branch of the Dime Savings Bank, which holds the mortgages on the six buildings bought by Hunter.

In November last year, 11 of the Ocelot buildings were included in a list of 200 foreclosures in Bronx and distressed multifamily buildings in other boroughs with the highest number of serious building violations. The city, concerned about the safety of tenants because of the hazardous conditions of the buildings, has already spent over $1.3 million in emergency repairs.

According to the Association for Neighborhood and Housing Development, about 100,000 housing units in the city belong to overleveraged complexes in deteriorating conditions.

Another multifamily building among the most notorious New York foreclosures is the 110-building Stuyvesant Town complex, which was abandoned by the developers after failing to pay the huge loan they used to buy the buildings for $5.4 billion in 2006.

In an announcement this week, Mayor Michael Bloomberg informed the tenants of the Stuyvesant Town buildings that the city cannot help them buy the properties. City councilmember Daniel Garodnick, however, who lives in one of the units, said that the mayor can save the buildings by partnering with a nonprofit.

Meanwhile, in Belmont, which is also known as Little Italy of the Bronx, signs announcing the sale of bank foreclosed houses for sale are increasingly being seen in the neighborhood. Real estate firm owner Jennie Ng said that two-family semidetached homes valued at $460,000 in 2009 can now be purchased at only around $400,000 and single-family homes can now be purchased at about $200,000. She added that foreclosures in Bronx can even be had at much lower prices.