My NYC Black Folk......Gentrification
- Thread starter Lewis Black
- Start date
Mikael Blowpiff
#LosIngobernabrehs
this white man’s face is irksome. also that place is tiny as fukk.
ogc163
Superstar
Captain Crunch
Veteran
Has DeBlasio tried to fight against developers or help them? Someone elaborate for me
ogc163
Superstar
ogc163
Superstar
Wall Street-Funded Plan to Gentrify Affordable Housing Crumbles in Harlem
Isaac Kassirer was at the forefront of one of the hottest trends in commercial real estate. He borrowed from global investors by promising to gentrify apartment buildings in New York’s low-income neighborhoods and raise the rents.
Mr. Kassirer fell behind on some loans before the coronavirus pandemic and now some tenants are in open rebellion. Longtime residents, joined by some new, high-paying renters, are on strike. When the pandemic ends, recently passed pro-renter laws are likely to make it harder for him to carry out his plan.
“Gentrification came back to bite them in the tushy,” said Cathy Stephens, a 31-year resident. She joined the rent strike after fighting for months with Mr. Kassirer over mold that spread across the walls of her apartment. In February, a judge ordered the landlord to remove the mold. Mr. Kassirer’s company painted her apartment peach but a recent inspection by Olmsted Environmental Services showed the mold was still there, according to Ms. Stephens’s attorney.
Mr. Kassirer’s company, Emerald Equity Group, said that “these issues we are experiencing [are] in fact what many building owners in this great city are finding themselves grappling with as a whole” and that it is addressing tenants’ complaints.
Wall Street embraced landlords like Mr. Kassirer over the past decade. Bankers packaged up their loans and sold them to bond investors with the promise that the buildings would generate much higher income. The market for those bonds grew from about $400 million of issuance in 2012 to $22.4 billion last year, according to commercial mortgage tracker Trepp LLC. Rental housing was the most common property type financed by such bonds.
Today, the combination of new laws meant to preserve low-income housing and the pandemic has left many of the borrowers struggling to pay off their debt. Forbearance programs tied to the pandemic are delaying a possible reckoning.
Mr. Kassirer borrowed $90 million from global investors in late 2018 to upgrade nine buildings he owns in New York’s East Harlem neighborhood. Emerald promised to realize a “strategic vision to replicate the high-class Manhattan amenities,” according to its website. He had fallen behind on some mortgage payments before the pandemic hit and about 40 of his mortgages in the area went into forbearance in the spring, according to Freddie Mac data.
The $90 million mortgage he got was called a transitional loan. Transitional loans are riskier than typical commercial mortgages advanced by banks. The space is dominated by nonbank lenders such as credit funds and real-estate investment trusts that have grown to become a major force in commercial real-estate finance in recent years. They originated an estimated 12% of commercial mortgage loans by value in 2019, up from 2.9% in 2009, Mortgage Bankers Association data shows.
Mr. Kassirer got his transitional loan from LoanCore Capital, a lender owned by two of the world’s biggest investors, Singapore’s GIC, a sovereign-wealth fund, and the Canada Pension Plan Investment Board. The two investors together manage more than $700 billion.
Tenants at 124-136 E 117th St. have been struggling with mold, lack of cooking gas and poor building conditions.
Many of them went on a rent strike this May, in a gambit to force the landlord to fix the problems and make a deal on their rent payments.
The Singaporean and Canadian funds deferred comment to LoanCore. A spokesman for LoanCore said the company is a responsible lender that takes strong actions to remedy issues faced by tenants in buildings it financed. The company didn’t provide examples of any actions it has taken and the spokesman declined to comment further.
East Harlem has long been home to low-income, Spanish-speaking residents. It is where Magdaly Marrero, 60, raised her two children on paychecks from McDonald’s, KFC and Popeyes restaurants.
Mr. Kassirer bought her building in August 2017, shortly after he purchased several dozen similar buildings nearby, totaling nearly 1,200 units. It was the biggest deal yet for the then-34-year-old real-estate investor who had previously bought buildings in the Bronx.
LoanCore packaged Mr. Kassirer’s loan with dozens of similar mortgages into two bond deals totaling $1.5 billion. Bond documents highlighted Mr. Kassirer’s record of moving out longtime tenants and raising rents. Among them was Ms. Marrero. She paid $1,095 a month for their two-bedroom unit, but chronic lack of repairs led her to take a $6,500 buyout from Emerald in spring 2018, Ms. Marrero’s children said.
LoanCore hired JPMorgan Chase & Co. and five other banks to sell the bonds to investors. On page 364 of a nearly 500-page prospectus of one of the deals was a table that summarized Mr. Kassirer’s success buying out tenants. Ms. Marrero’s $6,500 buyout was listed there, along with a new rent of $2,175 for her old apartment. J.P. Morgan declined to comment.
The loan was the last hurrah for the market. States such as New York and California, alarmed at the decline in affordable housing, instituted tough restrictions on landlords’ ability to evict tenants and raise rents. The states were reacting to a loss of affordable rental housing in the U.S. that coincided with the wave of new investor cash going to landlords.
According to Harvard University’s Joint Center on Housing, between 2012 and 2017, the U.S. lost 450,000 rental homes priced between $600 and $999 a month and lost 3.1 million homes renting for less than $600 a month. At the same time, the number of apartments renting for more than $1,000 rose by five million.
A vacant renovated apartment across the hall from Alonzo Johnson's rents for a much higher price than others.
There were several causes for the loss of low-cost housing, including the strong economy, the popularity of city living, high construction costs and zoning restrictions that prevented new development. The flow of cash from big investors into transitional lending exacerbated the problem.
Transitional loans, which were popular in hot real-estate markets such as California, Florida, New York and Texas, did create affordable housing in some instances. Elan Gordon used transitional loans to convert two struggling hotels into 240 affordable apartments in Greenville and Bluffton, S.C. “It’s delivering new supply to an area that needs it,” said Mr. Gordon, who runs SHIR Capital, an investment firm in Austin, Texas. He is converting four more hotels in Austin into below-market rent apartments.
SHARE YOUR THOUGHTS
Has your neighborhood been touched by gentrification? If so, what impact has it had on your community? Join the conversation below.
In other situations, the loans are used to boost rents. In Toledo, Ohio, one bond funded a $23 million loan on 888 apartments where the owners planned to introduce regular rent increases, pet fees, application fees and eliminate free housing for maintenance staff, according to a prospectus.
In the East Bay of California, a formerly seniors-only community is in the midst of a conversion to an all-ages apartment complex. Current rental listings suggest the property owner is making good on its plan to increase base rents by 64%, as projected in a 2018 bond prospectus.
Banks cut back on transitional lending for reputational and financial reasons. “It’s just not our business model,” said Joseph Fingerman, head of commercial real-estate lending at Signature Bank, a New York lender. The bank backed off from such lending under pressure from affordable housing groups.
Tenants complain that many attempts to make building repairs have been inadequate.
Some also said the hot plates they were given during the gas outage made cooking at home extremely difficult.
The bond market that financed transitional loans sputtered this spring when the pandemic hit. The share of delinquent loans increased from 0.22% in March to 2.2% in September, Trepp data show. New deals also slumped, with about $7 billion of new issuance so far in 2020, versus $22.4 billion for all of 2019. Half of the 2020 volume was before the pandemic, according to Trepp.
Hit by New York’s new rent laws, pushback from tenants and the impact of the pandemic, Mr. Kassirer’s situation is worse than for most landlords. Tenants say he let his buildings fall into disrepair. Rat and cockroach infestations, mold, broken radiators and appliances, gas shut-offs and other issues have forced some tenants to move. Others stayed put and joined the rent strike in East Harlem and three other Manhattan properties where tenants are collectively withholding more than $600,000 of rent checks, according to their attorney.
Emerald said that the issues inside the buildings “were not caused by us but rather [were] the result of aging structures built at the turn of the last century that are in need of restorations and upgrades.” It added that it is making “strenuous efforts to address any outstanding issues at our buildings and are confident of resolving these soon.”
Among the people pushing back against Mr. Kassirer was Julian Coker, a recently graduated English and acting major from New York University, who moved into a renovated three-bedroom unit in 2019, sharing a $3,275 rent with roommates.
Last October, a gas leak left tenants without working stoves. After six months with no gas, Mr. Coker began knocking on his neighbors’ doors and asking them to join the rent strike. The strike formally launched this May and more than half of the 72 units in the building are participating, according to Alonzo Johnson, who is leading the effort.
Alonzo Johnson is leading the rent strike at 124-136 E. 117th St.
Strike posters soon peppered the hallways, declaring “THIS APT. IS ON RENT STRIKE!” After the building superintendent was caught tearing them down, one tenant added a sign warning him not to do so and a camera outside his door to catch him. Mr. Coker and several of his neighbors moved out as conditions worsened. “It was a feeling of relief to leave the building,” said Mr. Coker.
Emerald said cooking gas was restored in the building in September. It blamed the nearly yearlong outage on a “complex, expensive, and time-consuming process” of individually accessing and restoring gas supply in each apartment.
Tenants are demanding a rent reduction as compensation. Mr. Johnson is urging his neighbors to hold out for a collective deal rather than striking their own agreements. Tenants in Mr. Johnson’s building and eight others are also talking to an affordable-housing developer to find a new owner.
After their buyout, Ms. Marrero and her children moved to Yonkers, a struggling city on New York City’s northern border. They paid nearly double their old rent and their commutes were much longer. “That’s all we do is work for the rent,” said Jennifer Trinidad, Ms. Marrero’s daughter, in an interview earlier this year.
Isaac Kassirer was at the forefront of one of the hottest trends in commercial real estate. He borrowed from global investors by promising to gentrify apartment buildings in New York’s low-income neighborhoods and raise the rents.
Mr. Kassirer fell behind on some loans before the coronavirus pandemic and now some tenants are in open rebellion. Longtime residents, joined by some new, high-paying renters, are on strike. When the pandemic ends, recently passed pro-renter laws are likely to make it harder for him to carry out his plan.
“Gentrification came back to bite them in the tushy,” said Cathy Stephens, a 31-year resident. She joined the rent strike after fighting for months with Mr. Kassirer over mold that spread across the walls of her apartment. In February, a judge ordered the landlord to remove the mold. Mr. Kassirer’s company painted her apartment peach but a recent inspection by Olmsted Environmental Services showed the mold was still there, according to Ms. Stephens’s attorney.
Mr. Kassirer’s company, Emerald Equity Group, said that “these issues we are experiencing [are] in fact what many building owners in this great city are finding themselves grappling with as a whole” and that it is addressing tenants’ complaints.
Wall Street embraced landlords like Mr. Kassirer over the past decade. Bankers packaged up their loans and sold them to bond investors with the promise that the buildings would generate much higher income. The market for those bonds grew from about $400 million of issuance in 2012 to $22.4 billion last year, according to commercial mortgage tracker Trepp LLC. Rental housing was the most common property type financed by such bonds.
Today, the combination of new laws meant to preserve low-income housing and the pandemic has left many of the borrowers struggling to pay off their debt. Forbearance programs tied to the pandemic are delaying a possible reckoning.
Mr. Kassirer borrowed $90 million from global investors in late 2018 to upgrade nine buildings he owns in New York’s East Harlem neighborhood. Emerald promised to realize a “strategic vision to replicate the high-class Manhattan amenities,” according to its website. He had fallen behind on some mortgage payments before the pandemic hit and about 40 of his mortgages in the area went into forbearance in the spring, according to Freddie Mac data.
The $90 million mortgage he got was called a transitional loan. Transitional loans are riskier than typical commercial mortgages advanced by banks. The space is dominated by nonbank lenders such as credit funds and real-estate investment trusts that have grown to become a major force in commercial real-estate finance in recent years. They originated an estimated 12% of commercial mortgage loans by value in 2019, up from 2.9% in 2009, Mortgage Bankers Association data shows.
Mr. Kassirer got his transitional loan from LoanCore Capital, a lender owned by two of the world’s biggest investors, Singapore’s GIC, a sovereign-wealth fund, and the Canada Pension Plan Investment Board. The two investors together manage more than $700 billion.
Tenants at 124-136 E 117th St. have been struggling with mold, lack of cooking gas and poor building conditions.
Many of them went on a rent strike this May, in a gambit to force the landlord to fix the problems and make a deal on their rent payments.
The Singaporean and Canadian funds deferred comment to LoanCore. A spokesman for LoanCore said the company is a responsible lender that takes strong actions to remedy issues faced by tenants in buildings it financed. The company didn’t provide examples of any actions it has taken and the spokesman declined to comment further.
East Harlem has long been home to low-income, Spanish-speaking residents. It is where Magdaly Marrero, 60, raised her two children on paychecks from McDonald’s, KFC and Popeyes restaurants.
Mr. Kassirer bought her building in August 2017, shortly after he purchased several dozen similar buildings nearby, totaling nearly 1,200 units. It was the biggest deal yet for the then-34-year-old real-estate investor who had previously bought buildings in the Bronx.
LoanCore packaged Mr. Kassirer’s loan with dozens of similar mortgages into two bond deals totaling $1.5 billion. Bond documents highlighted Mr. Kassirer’s record of moving out longtime tenants and raising rents. Among them was Ms. Marrero. She paid $1,095 a month for their two-bedroom unit, but chronic lack of repairs led her to take a $6,500 buyout from Emerald in spring 2018, Ms. Marrero’s children said.
LoanCore hired JPMorgan Chase & Co. and five other banks to sell the bonds to investors. On page 364 of a nearly 500-page prospectus of one of the deals was a table that summarized Mr. Kassirer’s success buying out tenants. Ms. Marrero’s $6,500 buyout was listed there, along with a new rent of $2,175 for her old apartment. J.P. Morgan declined to comment.
The loan was the last hurrah for the market. States such as New York and California, alarmed at the decline in affordable housing, instituted tough restrictions on landlords’ ability to evict tenants and raise rents. The states were reacting to a loss of affordable rental housing in the U.S. that coincided with the wave of new investor cash going to landlords.
According to Harvard University’s Joint Center on Housing, between 2012 and 2017, the U.S. lost 450,000 rental homes priced between $600 and $999 a month and lost 3.1 million homes renting for less than $600 a month. At the same time, the number of apartments renting for more than $1,000 rose by five million.
A vacant renovated apartment across the hall from Alonzo Johnson's rents for a much higher price than others.
There were several causes for the loss of low-cost housing, including the strong economy, the popularity of city living, high construction costs and zoning restrictions that prevented new development. The flow of cash from big investors into transitional lending exacerbated the problem.
Transitional loans, which were popular in hot real-estate markets such as California, Florida, New York and Texas, did create affordable housing in some instances. Elan Gordon used transitional loans to convert two struggling hotels into 240 affordable apartments in Greenville and Bluffton, S.C. “It’s delivering new supply to an area that needs it,” said Mr. Gordon, who runs SHIR Capital, an investment firm in Austin, Texas. He is converting four more hotels in Austin into below-market rent apartments.
SHARE YOUR THOUGHTS
Has your neighborhood been touched by gentrification? If so, what impact has it had on your community? Join the conversation below.
In other situations, the loans are used to boost rents. In Toledo, Ohio, one bond funded a $23 million loan on 888 apartments where the owners planned to introduce regular rent increases, pet fees, application fees and eliminate free housing for maintenance staff, according to a prospectus.
In the East Bay of California, a formerly seniors-only community is in the midst of a conversion to an all-ages apartment complex. Current rental listings suggest the property owner is making good on its plan to increase base rents by 64%, as projected in a 2018 bond prospectus.
Banks cut back on transitional lending for reputational and financial reasons. “It’s just not our business model,” said Joseph Fingerman, head of commercial real-estate lending at Signature Bank, a New York lender. The bank backed off from such lending under pressure from affordable housing groups.
Tenants complain that many attempts to make building repairs have been inadequate.
Some also said the hot plates they were given during the gas outage made cooking at home extremely difficult.
The bond market that financed transitional loans sputtered this spring when the pandemic hit. The share of delinquent loans increased from 0.22% in March to 2.2% in September, Trepp data show. New deals also slumped, with about $7 billion of new issuance so far in 2020, versus $22.4 billion for all of 2019. Half of the 2020 volume was before the pandemic, according to Trepp.
Hit by New York’s new rent laws, pushback from tenants and the impact of the pandemic, Mr. Kassirer’s situation is worse than for most landlords. Tenants say he let his buildings fall into disrepair. Rat and cockroach infestations, mold, broken radiators and appliances, gas shut-offs and other issues have forced some tenants to move. Others stayed put and joined the rent strike in East Harlem and three other Manhattan properties where tenants are collectively withholding more than $600,000 of rent checks, according to their attorney.
Emerald said that the issues inside the buildings “were not caused by us but rather [were] the result of aging structures built at the turn of the last century that are in need of restorations and upgrades.” It added that it is making “strenuous efforts to address any outstanding issues at our buildings and are confident of resolving these soon.”
Among the people pushing back against Mr. Kassirer was Julian Coker, a recently graduated English and acting major from New York University, who moved into a renovated three-bedroom unit in 2019, sharing a $3,275 rent with roommates.
Last October, a gas leak left tenants without working stoves. After six months with no gas, Mr. Coker began knocking on his neighbors’ doors and asking them to join the rent strike. The strike formally launched this May and more than half of the 72 units in the building are participating, according to Alonzo Johnson, who is leading the effort.
Alonzo Johnson is leading the rent strike at 124-136 E. 117th St.
Strike posters soon peppered the hallways, declaring “THIS APT. IS ON RENT STRIKE!” After the building superintendent was caught tearing them down, one tenant added a sign warning him not to do so and a camera outside his door to catch him. Mr. Coker and several of his neighbors moved out as conditions worsened. “It was a feeling of relief to leave the building,” said Mr. Coker.
Emerald said cooking gas was restored in the building in September. It blamed the nearly yearlong outage on a “complex, expensive, and time-consuming process” of individually accessing and restoring gas supply in each apartment.
Tenants are demanding a rent reduction as compensation. Mr. Johnson is urging his neighbors to hold out for a collective deal rather than striking their own agreements. Tenants in Mr. Johnson’s building and eight others are also talking to an affordable-housing developer to find a new owner.
After their buyout, Ms. Marrero and her children moved to Yonkers, a struggling city on New York City’s northern border. They paid nearly double their old rent and their commutes were much longer. “That’s all we do is work for the rent,” said Jennifer Trinidad, Ms. Marrero’s daughter, in an interview earlier this year.
88m3
Fast Money & Foreign Objects
King Crimson
Member of a very exclusive gang
Damn. Gloria's is gone? I just copped from there a few days ago. This shyt is wild outta control. fukk I hate it.
88m3
Fast Money & Foreign Objects
Yeah sadly, I'm not sure when it closed, I walked down Nostrand on Monday and something felt off but I didn't put it together. Peppas is pretty good but this is is a big loss, I think some of the other small West Indian spots are gone too but it's hard to tell with covid...
King Crimson
Member of a very exclusive gang
I fukks with Peppa’s heavy, but Gloria’s was an institution. She been there forever.
What if they get rid of that trini spot, Nio’s? Where am I going to get my currant rolls?
88m3
Fast Money & Foreign Objects
I fukks with Peppa’s heavy, but Gloria’s was an institution. She been there forever.
What if they get rid of that trini spot, Nio’s? Where am I going to get my currant rolls?
Yeah!
I'm not sure if I've been to that one, what are the cross streets?
I went down Nostrand again today and a lot of places were closed but some had signs up for the holidays(some look done though). A lot of shops have also changed storefronts too but are still in the same area.
King Crimson
Member of a very exclusive gang
It’s on Nostrand between St. John’s and Sterling Place. Closer to the St. John’s corner. On the side of the 45 going downtown.
tremonthustler1
aka bx_representer
The PortaBella on Fordham is on fire.
We back to The Bronx Is Burning days. Owners tryna cash out on that insurance
We back to The Bronx Is Burning days. Owners tryna cash out on that insurance