Sunday, September 26, 2010

Distressed properties to get assessments

From Crains:

The City Council launched a new program Thursday to give tenants in certain dilapidated properties a new weapon in their battle to improve building conditions. The initiative will focus on properties where excessive debt burdens taken on by the owners have severely limited their financial ability to make necessary repairs.

Engineers and architects, working on a pro-bono basis, will survey such buildings across the five boroughs and produce detailed reports on how extensive the damage is, what repairs are needed and how much those repairs will cost.

"This new program will help level the playing field,” said Maggie Russell-Ciardi, executive director of the advocacy group Tenants and Neighbors. “It will arm tenants with the information they need to determine what a truly supportable mortgage or sale price for their buildings would be. And it will help tenants refute false claims by owners and lenders that everything is fine in buildings that are heading rapidly towards financial failure."

The citywide program is an expansion of a pilot in which New York City-based Baer Architecture Group produced a detailed report on 10 foreclosed-upon Bronx buildings that argues the properties need up to $26.6 million in repairs, more than five times an earlier estimate by the properties' current overseer. The $35 million loan on the buildings—part of a portfolio bought by Los Angeles-based Milbank Real Estate at the height of the housing boom in 2007—is expected to be transferred to a new, undisclosed buyer next week.

Concern is high among elected officials, tenants and housing activists who worry that the properties—which are saddled with 3,261 code violations—will likely deteriorate further because the new owner is paying too much for the portfolio and won't be able to make needed repairs.

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