Program to Take Buildings from Bad Landlords Fades

Photo by: Adi Talwar
This building on 194th Street was enrolled in the 7A program 30 years ago. It's still controlled by the housing organization that stepped in to operate it.

7A, once a key enforcement tool, is used less often amid a changed real-estate market and new programs. But it's still needed as a threat. The question is: Can the threat remain real?

By: Jordan Moss

If there was ever a reason for the 7A program, it's 3660 Waldo Ave. in Riverdale, generally a well-off Bronx neighborhood. The 88-unit building has 680 violations recorded on the Department of Housing Preservation and Development's (HPD) website. . They include ceilings with water leaks, lack of hot water, loose and missing bathroom wall tiles, and mice.

Under 7A (technically Article 7A of the New York State Real Property Actions and Proceedings law) the city can— with a Housing Court judge's OK —take control of a troubled building from its owner and hand it over to someone else for management. It doesn't go back to the landlord until, or if, he or she deals with the property's issues. Getting it back is rare; the building often ends up in a new owner's hands.

But Bronx Housing Court judge Jerald Klein has not authorized the city to move ahead with the 7A process in the case of 3660 Waldo.

"We have not been able to convince the courts that 7A is the best task to take for this building," says HPD deputy commissioner Vito Mustaciuolo. "The court has been satisfied with the response from [the] owner." HPD will continue to stay involved until violations are addressed, Mustaciuolo adds.

Klein did not return two calls seeking comment. But the status of 3660 Waldo reflects the changing contours of housing enforcement in the city, where new market realities and innovative programs have combined to render older tools like 7A valuable chiefly as a deterrent.

The question is whether 7A will retain its power as a threat if, thanks to reluctant judges and resistant landlords, it fades from use.

Is 7A still relevant?

Housing violations are still a big problem. University Neighborhood Housing Program, which researches Bronx and city building status extensively, reported that, as of August, one in 18 buildings in the borough could be considered distressed based on their financial burdens and housing code violations, with more than 1,800 in precarious shape citywide.

But overall, a new economic environment puts landlords in a better position.

"The whole world changed with cheap bank and mortgage company financing," says John Reilly, executive director of Fordham Bedford Housing Corporation (FBHC), a well-known northwest Bronx nonprofit. "They can get a mortgage worth more than the building's real business value and do enough work to keep the city off their backs. They are not making much off running the buildings; they make it off the re-financing and sales."

In earlier years, when judges ruled in favor of 7As for troubled properties, landlords frequently stayed out of the way and new managers made critical repairs. Owners may even have been glad to have someone else worry about their building.

But now, because of the sweeter financial prospects of most Bronx buildings, landlords don't want to hand their profitable properties over even temporarily.

So it takes an even greater push from activists and HPD, particularly when judges seem more reluctant to rule in favor of 7As when buildings that could benefit from the designation are not part of a community crisis.

There were many crisis buildings in the 1980s and early 1990s — where landlords left properties behind, or repeatedly neglected repairs. Reilly believes 7A was critical in the borough's recovery.

"I am certain the program saved hundreds of buildings in the Bronx and other parts of the city from abandonment and restored services to thousands of tenants," Reilly says in an email.

One building's saga

About 30 years ago, FBHC was granted the 7A for 240 E. 194th St. The landlord, Palja Gazivoda, prevented heat by turning off the boiler and locking the room's door. Tenants broke down the door to turn it back on, recalled Reilly, who said there were some 20 empty apartments in the building between 1979 and 1980. FBHC still has basic control of the building through a subsidiary whose board it controls. Overall, Reilly reported that FBHC was involved as a 7A administrator in 22 buildings—16 in the 1980s when many more people and organizations took part. It still manages 13, nine of which it owns. Tenants own three and one is still a 7A.

According to data HPD provided to the Bronx Bureau, only three Bronx properties are in the 7A program, and they're small buildings with only eight to nine units. Just four of the 42 buildings run by 7A citywide have 30 or more units. Compare that to 2002, when there were almost 1,800 units in 123 buildings under 7A administration, according to an Independent Budget Office report.

But HPD has drawn many buildings into two relatively new programs, including the Proactive Preservation Initiative, launched in 2011 to focus on 500 troubled properties. With thorough roof-to-cellar inspections and strict deadlines, the program "targets 'at-risk' buildings in an attempt to prevent them from reaching a state of extreme disrepair," says HPD spokesman Eric Bederman, who adds that 7As "can do a lot for a troubled property, but it's not the sole tool in trying to help those properties."

Separately, HPD's Alternative Enforcement Program (AEP) targets 200 buildings at a time that need critical repairs. HPD says it has "successfully discharged" 719 of them. Deputy Commissioner Mustaciuolo says his agency works closely with CASA and the Northwest Bronx Community and Clergy Coalition, two housing organizing groups, on identifying properties for the AEP. He added that for those that were in the program without success, there's a better shot for his agency to secure a 7A ruling.

Threats that work, and fail

But even where a 7A doesn't get approved, it can work as a threat as it did recently with several buildings totaling 63 units on College Avenue, near the Grand Concourse. The structures had ceiling holes, broken locks, peeling lead paint and rats. Tenants, with CASA's support, sought a 7A. Instead the landlord moved to sell it.

"The 7A was one thing that spurred the landlord to come to the negotiating table," says Harry DeRienzo, who leads Banana Kelly, the Bronx nonprofit that was part of the team that bought the buildings. "The 7A was never appointed for it, but the tenants' role in [pushing for that] action was forcing the owner to the table."

But failed pursuits of 7As do not always result in success. From 2001 to 2003, tenants sought a 7A in the case of 3569 DeKalb Ave., a disastrous site for years until a 7A was finally approved after 8-year-old Jashawn Parker was killed in an August 2002 apartment fire.

In a 2012 investigative report about Parker's death and other serious issues in a portfolio of buildings associated with one investor, City Limits interviewed city housing experts about what new tools were needed to hold landlords accountable when they violated the housing code.

Former HPD official Harold Shultz proposed handling building violations at an administrative tribunal outside of Housing Court. Some nonprofit housing groups, including Urban Homesteading Assistance Board, have pushed for legislation to give a city agency like HPD the power to approve or disapprove a license for anyone seeking to buy a property.

Assemblyman Jeffrey Dinowitz (Riverdale, Kingsbridge, Norwood, Woodlawn Wakefield) introduced legislation beefing up 7A following the DeKalb Avenue tragedy. It calls for handing over the buildings to qualified landlords if owners don't get repairs done within 60 days. It regularly passes the Assembly with bipartisan support: This year 144 Assembly members voted it, with zero opposed. But it never goes anywhere in the Republican-controlled Senate.

What it means for Waldo Avenue

While 7A might be a successful threat in cases like the College Avenue buildings, it is still uncertain whether 7A has been a sufficient warning at 3660 Waldo. Landlord Morris Rubin has employed experienced lobbyist Arthur Goldstein to fight the city's push for a 7A, according to Andrew Sandler, the director of community affairs for Councilman Oliver Koppell.

The building is listed for sale on-line for $18 million . But an office representative for Rubin's company would not comment on whether he's fully committed to selling the building. "I'm not at liberty to discuss our business matters," she said.

As for addressing regularly reported tenant complaints, she added, "The building has new management and it is operating smoothly. We don't have any of those complaints – no longer." She also said Rubin "was not managing the property any longer. He has a management team."

But some tenants still have significant complaints.

Virginia Gonoss, a 15-year tenant who says she has paid for her own repairs over the last several years because the landlord doesn't respond, has noticed more work going on now. But there are still problems in her apartment. She said she's had no heat or hot water for a few days a week over the last month or so. And the inner part of the elevator has recently been replaced but doesn't work for at least two days a week.

Whether a 7A ongoing process can play the role it did on College Avenue is still to be determined. According to a Housing Court spokesman, a "final conference" for the Waldo building is scheduled for January 3.

  • BronxVoter

    The biggest obstacle to Jeff Dinowitz’s legislation is his fellow putative Ben Frankliner — Jeff Klein. It is time for Dinowitz to be more openly critical of Klein and his obstructionist alliance with Dean Skelos. Klein needs to be a real Democrat or he needs to face more heat from Democratic leaders in the Bronx like Dinowitz. Oliver Koppell seems to understand this. It is not enough to keep putting forward the good legislation and not be a leader for real change in the legislature to get it passed.