By Deborah Goonan, Independent American Communities
Updated April 8, 2016 @ 8:00 PM
Today let’s take a look at how the non-profit Habitat for Humanity in New York City intersects with the Homeowners’ Association industry and affordable housing initiatives.
Once again, we see that condominiums and single family HOA tract homes are not created just for affluent households seeking an exclusive lifestyle.
Opportunistic real estate developers know how to exploit low-income homeowners and tenants, and how to take full advantage of both taxpayer and charitable funding to make a fortune buying and selling property. That’s not news to anyone. But the non-profits we trust to do the right thing, and to spend dollars frugally, sometimes bitterly disappoint us.
You must read this well-researched investigation by ProPublica and the NY Daily News. It explains how Habitat for Humanity-NYC has acquired multiple multifamily properties from the infamous Isaac Katz – a developer with a history of selling shoddily constructed condos to unsuspecting buyers. And, in the process of acquiring properties to redevelop for families in need, Habitat’s acquisition deals displaced dozens of low-income tenants. Ironically and sadly, some of those tenants are now homeless.
How Habitat for Humanity Went to Brooklyn and Poor Families Lost Their Homes
Karen Haycox, the CEO of Habitat-NYC, who joined the charity in 2015, long after the Bed-Stuy deals, said in statement, “we are proud that Habitat for Humanity-New York’s participation in the [federal grant program] enabled our organization to help 105 families in need of affordable housing become homeowners.”
Four dozen of those families moved into new homes built on vacant land. Still, the majority of families helped by the project moved into units made available, in part, because others had been displaced.
Many of those who bought Habitat’s renovated homes earned around $50,000 a year — almost double the median income for renters in the neighborhood and about five times as much as the disability income of Charles Watson, a tenant who lived a floor below Tyson and ended up living on the streets after he was pushed out. Watson did not remember the name of the person who pushed him to leave.
“I didn’t want to move,” Watson said. “They wanted everybody out because they knew they were going to sell and make the apartments into condos. And they knew that would be a lot of money. That’s what it was all about, anyway: money.”
Here’s another excerpt from the same report. Was this a shady real estate deal?
That month, Katz also sold a building at 203 Marion St. to the charity for about $620,000.
It was a remarkably quick and lucrative flip. Katz had purchased the six-unit property earlier that day for about $380,000 from Lena and Percy Spellman, an elderly African American couple who had owned it since 1983.
Internal Habitat documents provided to ProPublica show that Habitat first targeted the property for acquisition the previous June, when it was still owned by the Spellmans.
Katz’s lawyer said this was “incorrect,” but did not elaborate.
Property records show that the Spellmans did not sign a contract agreeing to sell the property to Katz until July 30.
“I’m not very up to date on real estate law, but I don’t know how you can sell something you don’t own,” said Jerome Spellman, the son of the building’s longtime owners. “And that’s what he did.”
Habitat officials deny this was the case. In a statement, they said Katz already had a binding contract in hand when they first learned about the property. “There was no legal way Habitat-NYC could have directly purchased the property from the Spellmans,” they said.
Michael Kozek, a real estate lawyer, who reviewed the documents for ProPublica, said the Spellmans may have cause for complaint.
“The circumstances indicate something suspect,” he said. “It appears that the Spellmans were deprived of the full value of their property.”
Habitat NYC has provided the following statement in response to the ProPublica article. CEO Haycox asserts that the organization did not knowingly or intentionally participate in displacements of families from homes they acquired for renovation.
CEO Karen Haycox Response to ProPublica Article:
As you may be aware, ProPublica and The New York Daily News recently published articles about our organization. These article concern our involvement several years ago in the Neighborhood Stabilization Program 2 (NSP2), a federal grant program intended to stabilize communities impacted by high rates of foreclosure, abandonment and vacancy.
The articles and the resulting media coverage have included many negative statements, inaccuracies and unsubstantiated allegations about how Habitat for Humanity New York City (Habitat NYC) managed the purchase and renovation of homes as part of the NSP2 program. In fact, various iterations of the original article erroneously state that Habitat NYC actively displaced families as part of this process. This is in complete opposition to our mission, and we are diligently working to correct such factual errors.
Habitat NYC stands by our handling of the NSP2 grants that made it possible to help 105 low-income families in New York City to have an affordable place to call home. We are confident that our actions adhered to all federal grant guidelines, legal requirements and best practices. Furthermore, Habitat NYC reaffirms we were unequivocally unaware of any coercive tactics, and we condemn any such measures. If the former property owners took coercive actions, it is reprehensible.
We are encouraging the seven displaced families who were named in the April 1 article to contact us directly. We want to better understand their situations and help them find solutions that meet their needs. We stand ready to guide any affected residents through our application process or connect them with other appropriate affordable housing resources, as we do with all families who reach out to us. Last year, Habitat NYC referred more than 240 families to our colleague housing organizations for such counseling and support.
Habitat NYC is committed to the highest standards of integrity. Over the last 30 years, we have built a strong record of transparent and ethical operations, and we are proud of the transformational work we do all day, every day to help New York families seeking safe and affordable homeownership.
If you have any questions about Habitat NYC’s work past, present or future – I would value the opportunity to meet with you personally to discuss. Please contact me directly at 646-779-8986.
Habitat for Humanity NYC