200 “Worst” Buildings In AEP Round Five Owe Combined $1.3 Million in Emergency Repair Charges and Carry More Than 26,700 Open Housing Code Violations
2011 Changes To AEP Legislation Show Success Story In Round 4:
More Than 1,800 Additional Units Captured; 101 Buildings Discharged; 29,500 Violations Corrected;
$1.57 Million In Liens Paid
New York, NY - New York City Department of Housing Preservation and Development (HPD) Commissioner Mathew M. Wambua released the list of 200 residential buildings that have been placed into the agency’s fifth round of the Alternative Enforcement Program (AEP). The AEP, which was originally signed into law in 2007, is aimed at increasing the pressure on the owners of the City’s most distressed multifamily residential buildings to bring the properties up to code so that the residents are not forced to live in substandard and hazardous conditions. The buildings were selected using the updated criteria that was adopted by the City Council and signed into law by Mayor Michael R. Bloomberg in 2011. Of all five rounds, this is the second round of AEP with buildings selected under the amended criteria, which was modified to qualify a larger number of buildings with 20 or more units for the program. With more units captured under AEP’s umbrella, thousands more New Yorkers will benefit from the stabilizing effects of increased enforcement and improved living conditions.
“AEP has proven to be an effective way to corral these bad buildings and deal with them in a comprehensive manner,” said Commissioner Wambua. “Since the new amendments to AEP were adopted last year we’ve seen a rise in the rate at which buildings are discharged from the program, as well as a substantial uptick in the repayment of Emergency and other repair costs. It is unfortunate that some owners will only respond when punitive measures are brought to bear. There is no question that as much as a tenant must abide by the terms of the lease they sign, the landlord is required to ensure that the property in question is kept secure, safe and up to code, no ifs ands or buts.”
Together the 200 buildings in Round Five carry a total of 5,484 non-hazardous (A-class), 16,701 hazardous (B-class) and 4,525 immediately hazardous (C-class) violations, and owe the City more than $1.3 million in Emergency Repair Program (ERP) charges. ERP charges are money owed to the City for repairs done by HPD to correct immediately hazardous violations that the owner failed to address in a timely manner. Additionally, within the last year HPD’s Housing Litigation Division (HLD) has been active in 410 housing court cases against the owners of 145 of these buildings. The HLD caseload included, but was not limited to, cases for access warrants to allow HPD and their contractors onto some properties to perform repairs to immediately hazardous conditions, Comprehensive Cases seeking to correct all violations within a building and/or civil penalties, heat and hot water cases, support for tenant actions, and petitioning for a 7A administrator.
Number of Buildings/Units per Borough in AEP Round Five:
- Manhattan: 21 buildings/571 units
- Bronx: 56 buildings/989 units
- Brooklyn: 107 buildings/735 units
- Queens: 15 buildings/75 units
- Staten Island: 1 buildings/3 units
Last year’s fourth round of AEP was the first group of 200 building brought in under the new legislative requirements that went into effect in January 2011. It laid out two sets of criteria to expand the reach of AEP to include larger buildings, and thus benefit thousands more New York families. The legislation also specifically designated new conditions requiring improvement such as mold and vermin violations, and amends the discharge criteria to allow owners to pay their debt to the City over time as opposed to in a lump sum.
All indications are that the 2011 AEP legislation is working as intended. Under the new legislation the total units more than doubled from 1,476 in Round Three (under the original legislation) to more than 3,339 in last year’s Round Four. Of the 200 buildings in Round Four 101 buildings have been discharged, 29,519 violations have been corrected, and the City has directly recovered more than $1.57 million in ERP charges, AEP fees and liens; not including arrears that will be collected through approved repayment plans.
To be discharged from the program and taken off the AEP list, a building owner must act affirmatively to demonstrate that conditions at the property are improving. This means correcting all violations associated with heat and hot water, all C-class and 80% of B-class mold violations, 80% of all violations related to vermin, 80% of all remaining B- and C-class violations, and correct all related underlying conditions detailed in the AEP Order to Correct. The owner must also submit a pest management plan to the NYC Department of Health and Mental Hygiene if there is an infestation, submit a valid property registration statement, and repay all outstanding charges and liens for emergency repair work performed by HPD or enter into a repayment agreement with the NYC Department of Finance.
Buildings/Units throughout all previous rounds of the AEP (Rounds 1-4):
- Manhattan: 43 buildings/832 units
- Bronx: 244 buildings/4,373 units
- Brooklyn: 480 buildings/3,137 units
- Queens: 30 buildings/129 units
- Staten Island: 3 buildings/23 units
- A total of 410 buildings have been discharged
- $19.3 million has been recovered in ERP and AEP charges and liens (not including approved repayment plans)
AEP can be a driving force for neighborhood stabilization. In January HPD announced a plan to improve conditions at the severely distressed Kelly Street portfolio of five properties in the South Bronx. The previous owner allowed them to slide into such a deplorable state that all five had been placed in various rounds of the AEP. The program is credited with stabilizing the buildings by allowing HPD to target these properties, do roof-to-cellar inspections, replace major building systems (i.e. roofs, boilers, etc.) and perform emergency repairs to the most hazardous conditions which the old owner refused to address. HPD helped to facilitate a transfer of ownership of the Kelly Street buildings to a responsible development team, and recently awarded them with a $3.4 million acquisition loan and a tax-credit allocation that will generate $9.28 million in equity towards the rehabilitation needs of the portfolio and bank financing. Absent AEP, the Kelly Street properties would have continued to rapidly deteriorate and pose a health and safety risk, and possibly, orders to vacate the tenants may have been necessary – leaving the residents without permanent homes and threatening the stability of the surrounding neighborhood.
About the Alternative Enforcement Program (AEP):
The legislation establishing the AEP—the New York City Safe Housing Law (Local Law No. 29 of 2007)—was passed by the City Council in April 2007 and signed into law by Mayor Michael R. Bloomberg on June 15 of that year. The criteria was amended and passed by the City Council and signed by Mayor Bloomberg in 2011. The program calls for the designation each year of 200 different multiple dwellings, each to be chosen based on specific criteria set forth in the Safe Housing Law. Landlords with properties selected for the AEP have been put on notice that comprehensive repairs must be made. If those repairs are not initiated HPD is authorized to undertake a comprehensive review of the building, to make the necessary repairs, and to bill the landlord for that work. After repairs are made, there will be an ongoing monitoring program to ensure buildings do not fall back into disrepair and that necessary ongoing maintenance is made by the landlord. The program is aimed at improving conditions for tenants and to avoid the need for HPD personnel to repeatedly visit these buildings to correct reoccurring problems. For more information about AEP and to view the Round 5 list and all previous AEP lists please visit HPD’s website at, http://www.nyc.gov/html/hpd/html/owners/aep.shtml
About the NYC Department of Housing Preservation and Development (HPD):
HPD is the nation’s largest municipal housing preservation and development agency. Its mission is to promote quality housing and viable neighborhoods for New Yorkers through education, outreach, loan and development programs and enforcement of housing quality standards. It is responsible for implementing Mayor Bloomberg’s New Housing Marketplace Plan to finance the construction or preservation of 165,000 units of affordable housing by 2014. Since the plan’s inception, the creation or preservation of more than 129,200 affordable homes have been financed. For more information, visit www.nyc.gov/hpd