Serrano Fights Against Predatory Equity In East Harlem

José M. Serrano

October 23, 2008

Senator Serrano gathered with dozens of residents, as well as Congressman Charles Rangel, to protest the transfer of a city-owned lot to private equity developers Tahl Propp Equities (TPE). The lot, which is currently used as a parking lot for city officials, is the proposed site for a real-estate development deal that would net TPE 100 unrestricted market rate units, and generate only 40 units of affordable housing for the East Harlem community.

"Whether it's East Harlem or the Bronx, predatory investors seek to undermine affordability throughout my district," said Senator Serrano (D-Manhattan/Bronx). "But we, as a community, will continue to stand firm. Here on the streets, and in the halls of government, we are pushing back to defend tenants' rights, and helping to ensure that future generations can afford to live in this city."

Over the past five years, Tahl Propp Equities has purchased several thousands of units of affordable rental housing throughout Harlem, including rent-regulated housing, Mitchell-Lama and project-based Section 8 housing. Most of these apartments are occupied by people of low to moderate incomes. TPE's behavior since acquiring this huge portfolio of housing has reinforced tenants' fears that the equity firm's ultimate goal is to displace low and moderate income families in search of higher rents and higher profits.

In addition to what tenants are calling "planned gentrification," conditions in many of the buildings acquired by TPE have noticeably deteriorated under the private equity firms' ownership. They currently have an outstanding 4,146 code violations on a 2,437 unit portfolio. In many of their federally funded projects they are chronically failing HUD physical inspections, a condition that was not true prior to TPE taking ownership of the projects.

Residents have learned that TPE is trying to buy the parking lot currently owned by HPD for a total of $1 supposedly to build "affordable housing." Harlem Tenants Against Tahl Propp and their elected officials are demanding that new developments which receive the benefit of government subsidy be geared to serve the best interest of the existing community. The coalition is also calling on HPD to reject the Tahl-Propp proposal based on the developers' current housing record.

"Today is not just about one lot or one developer, it's about protecting our people from speculation and predatory investment across the city," said Senator Serrano.

Earlier this year, the Senator helped draft a letter to the New York State Comptroller urging the state to divest pension funds from any firm involved in predatory real estate investment. The letter garnered the signatures of 47 Senators and Assemblymembers from New York City.