Nearly $10 million recouped by Attorney General from bad actors violating tax programs
City announced first installment will support 600 affordable apartments for formerly homeless, seniors and people with mental health needs
Mayor Bill de Blasio and Attorney General Eric T. Schneiderman today announced the initial financing for nearly 600 new affordable apartments across the city, paid for by $10 million in settlements with property owners who violated the law. The new homes will serve formerly homeless New Yorkers, low-income families, veterans, seniors and people with mental health and substance abuse challenges.
The settlement money results from investigations spearheaded by the Attorney General into abuses of tax incentive programs. The $9.8 million includes restitutions paid by owners who failed to provide the rent-regulated leases their tenants deserved, violated tenant rights laws and denied service workers the required prevailing wage.
“The Attorney General and the City are cracking down on bad actors, and we’re putting the proceeds to work, building more affordable housing. Today, we’re announcing that hundreds of families in need will have a home they can afford. And our seniors, and people with mental health and substance abuse challenges, will have specialized housing with services to meet their needs,” said Mayor Bill de Blasio.
“New York has always been, and must remain, a city for working people,” said Attorney General Eric T. Schneiderman. “For more than two years, my office has been investigating unscrupulous building owners who have been abusing the law to unfairly take millions in tax exemptions from programs intended to help everyday New Yorkers. Today, we turn the proceeds of those investigations into real housing relief for our communities. I am proud to stand with Mayor de Blasio to announce another important step toward our shared goal of all New Yorkers having a safe, affordable place to call home.”
The joint investigations began in 2014, uncovering violations of tax exemption and abatement programs, including illegal deregulation of rent-stabilized units, violations of tenant right laws, and failure to provide rent regulated leases. This included restitution paid by 23 property owners for their failure to register apartments with the State’s Department of Homes and Community Renewal (HCR) and/or to comply with 421-a prevailing wage requirements for service workers in over 31 New York City properties. In addition to the payment of restitution and as part of the legal case against them, the landlords were required to properly register their properties and to provide tenants with proper regulated leases.
Today’s announcement dedicates about one half of the $9.8 million to four supportive housing projects, with the remainder to be allocated in the months ahead. Ultimately, the settlement funding could help finance more than 1,000 affordable apartments. The total amount for each project will be determined as their financing deals are secured:
The four projects identified so far are:
Institute for Community Living (ICL)
Set for construction in 2017, The Institute for Community Living (ICL) is planning to develop a supportive housing project with 129 affordable apartments for formerly homeless individuals and families in Boerum Hill, Brooklyn. The apartments are expected to be affordable to households earning up to $16,335 for an individual, and $20,979 for a household of three; or up to $22,385 for an individual, and $28,749 for a household of three.
The Bridge
The Bridge, a non-profit organization dedicated to mental health and housing solutions, will build a new affordable housing project with 59 apartments for formerly homeless veterans in the Melrose neighborhood of the Bronx. Future residents’ incomes are not expected to exceed $30,250. Rental payments are expected to be subsidized by Project-based Section 8 or HUD-VASH vouchers.
HANAC
HANAC, Inc. will build a low-income senior development with a total of 68 affordable apartments in Corona, Queens. The development will be affordable to seniors earning no more than $30,250 for an individual, and will include intergenerational programming such as an on-site management office and a social service office to assist residents.
Kenmore Hall
Housing and Services, Inc. (HSI) will rehabilitate Kenmore Hall, a supportive housing development in Gramercy Park, Manhattan with 326 affordable apartments for residents who earn an annual income of no more than $36,300 for an individual. HSI's mission is to end chronic homelessness, prevent displacement for those at risk and improve housing conditions for the marginalized through the development and management of permanent supportive housing, collaborations with other community groups, and preservation initiatives to safeguard NYC’s existing affordable housing stock.
“The City is committed to ensuring that owners and landlords who accept tax benefits are complying with their obligations. It is fitting that the money restored from those who would try to evade their responsibilities will now be used to create and preserve affordable housing for some of the most vulnerable New Yorkers. We are pleased that these funds will kick-start the development of supportive and senior housing here in Brooklyn, and in neighborhoods across the City. I want to thank Attorney General Schneiderman for his leadership of this ongoing multi-agency enforcement effort, and his support in bringing online new homes and services for families and individuals looking to secure a more promising future,” said Housing Preservation and Development Commissioner Vicki Been.
“It is both just and right to use funds collected from landlords who violated the law to create affordable housing for the most vulnerable New Yorkers,” said Human Resources Administration Commissioner Steven Banks. “I thank Attorney General Schneiderman and all those involved in this multi-agency effort that will allow 600 families in need to enjoy safe and permanent housing.”
