2178 Atlantic Avenue HDFC, a modest apartment building with geometric brickwork over the windows and on the frieze was built in 1910 and is home to 16 families. “Four sets of generations,” said Earline King, President of the 2178 Atlantic Ave Board for nearly 40 years.
The building is in a Central Brooklyn community that was disinvested and a victim to racist housing laws, including redlining and racial discrimination.
With help from the City and Federal government, the rental building became an affordable co-op in 1980 as a Homesteader building, meaning that the perspective owners had to renovate the building themselves. “In the beginning, we all had participated in building our own apartment,” said Ms. King. “We did the floor then we helped with the walls, we helped create our apartments.”
The City of New York granted the building a 20-year tax abatement at the completion of the renovation and co-op conversion, helping to keep the building affordable for the families inside. The co-op was financially stable during those years, providing the Black and brown families who called the building home with a stable way to build equity and to remain in their communities. However, after the abatement expired, things began to spiral out of control. The federal government sold the building’s debt to a private debt holder and the building, which as an HDFC is entitled to long-term property tax benefits, was incorrectly taxed as market-rate. The residents struggled to keep up with the ballooning tax bills. The situation became untenable and the building was destabilized.
They fought for more than a decade to get the tax relief that the City legally owed to the building through its status as an HDFC. But even after they secured it, the company who held the loan more than doubled their mortgage and the building was underwater. The City was unable to release the back taxes they owed the building, until the foreclosure action was resolved.
Habitat NYC and Westchester’s Housing Preservation Program worked with the building for more than a year, trying to figure out a solution to this problem. We worked hand in hand with two different City Councilmembers and with pro bono legal services from Brooklyn Law School, and Kramer Levin Naftalis & Frankel LLP. This partnership enabled the building to secure the tax exemption and a rebate, but the residents still needed to pay off part of their loan to avoid foreclosure. “Every time we thought we won a battle, [there was] something else,” said Ms. King.
Through a six-month Bridge Loan from the Habitat NYC Community Fund, the residents were able to pay off the building’s outstanding debts and access approximately $500,000 in tax refunds to pay down the new financing quickly. Our Housing Preservation Program provided technical assistance for the co-op so the HDFC could access the necessary financing and return the building to its resident owners.