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ON a cold evening in March, Desiree Dookhoo was at home in Ozone Park, Queens, studying for a nursing exam, when she heard someone trying to open her front door. She demanded to know who was there and threatened to call the police.

“It’s Richard from the bank,” a voice answered. “Your landlord has lost the house.”

Many renters may believe that they have avoided the chaos of the subprime loan crisis and the mortgage meltdown simply by renting and not buying, but they may not be as insulated as they think. Buildings with tenants are going into foreclosure as well.

“This is a growing problem nationwide,” said Mark Zandi, the chief economist at Moody’s Economy.com, a research company. “Landlords of all stripes could potentially get caught up in this very severe downturn.”

“I suspect that it’s going to be more of a problem for lower- to middle-income markets,” Mr. Zandi added.

Ms. Dookhoo said her landlord had told her that “he wasn’t ready to buy a house at that point in his life. He just got sidetracked by the bank and told all these wonderful stories,” about how he could afford a mortgage. Eventually, his debts caught up to him and the house slipped into foreclosure. “It didn’t work out for him, unfortunately,” she said.

It has not worked out terribly well for Ms. Dookhoo, either. Her lease expired last year, so when the property manager appointed by the bank asked her to move out, she started looking. Now, she and her two children have to find a new place to live in New York’s expensive and saturated housing market.

The property manager who came knocking on Ms. Dookhoo’s door has not been forthcoming about which bank he represents. But since he is giving her some time to look for a new apartment, she decided not to push the issue. He has also said that he would give her a little money for her moving expenses — an offer known in the industry as “cash for keys.”

“I’ve got to leave, it’s their house now,” she said.

In New York, a city of renters despite the recent condominium boom, tenants are particularly at risk. According to census figures for 2006, the most recent year for which data was available, an estimated 65.6 percent of New York City housing was renter occupied, as opposed to 32.7 percent nationwide.

“The effects of the subprime crisis and the housing-price crisis are just different in New York than in many parts of the country,” said Vicki Been, the director of the Furman Center for Real Estate and Urban Policy at New York University, citing factors like strong home prices and low homeownership rates. “The crisis is unfolding more slowly and, I think, it is affecting many more renter households than it is elsewhere in the country.”

In 1993, during the last big wave of foreclosures in New York City, nearly 6,200 buildings (residential, commercial and mixed-use) began the foreclosure process. In 2007, the Furman Center estimated that at least 38,000 people facing a foreclosure in New York City were renters.

The center, analyzing data in New York City from housing court and the county registrar, estimates that foreclosure proceedings were begun on nearly 15,000 residential or mixed-use buildings last year alone — a majority of them small buildings with just a few units, and almost all of them in the boroughs outside of Manhattan. (The center counts a total of about 900,000 buildings with residential space in the 5 boroughs and some 3.2 million units of housing.)

“The national discussion about foreclosures has largely focused on owners,” Ms. Been said. “There’s a whole group here that is not being talked about:” renters.

Foreclosures can have an impact on tenants in lots of ways, but there are two sets of problems that most will face. The first and most daunting is eviction. The second is a loss of services, which can mean anything from having to fix your own clogged pipes to losing heat in the winter.

Luis Matute moved into a two-bedroom railroad apartment at the top of a walk-up in Bushwick, Brooklyn, 13 years ago. Five years later, Nelva Muy joined him when they were married. Now, the couple, who are from Ecuador, and their 6-year-old son, Jinson, live in the same apartment, which has become plagued with cracks and leaks.

Two years ago, the person who collected the rent every month stopped showing up. Mr. Matute and Ms. Muy have not paid rent since, though they have been saving their rent money of $575 a month.

Michael Grinthal, a lawyer at South Brooklyn Legal Services’ housing unit, said that putting rent money in a bank account is a good way for tenants to protect themselves from lawsuits or eviction if a court decides that the landlord or new owner is entitled to unpaid back rent.

In a sense, however, Mr. Matute and Ms. Muy are getting what they pay for.

Since their landlord disappeared, they have grappled with everything from a crumbling roof to lapsed utility bills. They have pitched in with their neighbors to pay some of the bills and make repairs to try to keep their apartments livable.

“I did the best I could,” Mr. Matute said.

“We do everything in the building,” Ms. Muy added. (They both spoke in Spanish, through an interpreter.)

Despite their efforts, worsening conditions landed their home on the city’s list of the 200 worst residential buildings in the five boroughs, which was released last November.

Since then, the Department of Housing Preservation and Development has made $70,000 worth of repairs — and still when it rains they put a bowl in their living room to collect the leaking raindrops.

With their lease expired and the future of the building uncertain, the family doesn’t know if a move is in the offing.

They have the cushion of saved rent, but finding housing that is affordable long-term will be a challenge. Mr. Matute earns $11 per hour working in a lumber warehouse, and Ms. Muy recently lost her job in a clothing factory. They know their rent could easily double if they moved to another apartment in their Bushwick neighborhood.

“We want to stay here,” Ms. Muy said. “This is our home. I would like to know, if I have to move out.”

Other renters are forced out of their apartments because of worsening conditions.

According to Neill Coleman, a spokesman for the Department of Housing Preservation and Development, residents who find themselves without essential services like heat, water or gas can ask the city for help by calling 311.

“H.P.D. will make emergency repairs if necessary (that could include delivery of oil for the boiler or picking up the electricity account),” he wrote in an e-mail message.

This winter, the heat went out in Yolanda Feliciano’s apartment in the Bronx. More than two months later, it was still not working. Her landlord defaulted on her mortgage and left this problem to her tenants.

Ms. Feliciano contacted the city several weeks ago. Mr. Coleman said that a case had been brought against the landlord in housing court and that the department officials had tried to turn the heat on twice but they could not get into the building. He invited Ms. Feliciano to schedule a time for them to come by again.

For the time being, Ms. Feliciano is staying with friends and has sent her two children to live with their father. She said a potential buyer was interested in the building, and has told her that she can stay on as a tenant.

William Carbine, an assistant commissioner for neighborhood preservation at the Department of Housing Preservation and Development, said that there had been a program in place since 2005, called PACE, to help homeowners with mortgage troubles. But the program was intended to help victims of predatory lending, and hasn’t been able to keep up with problems caused by the subprime crisis.

“Subprime really overwhelmed what was available,” he said.

Mr. Carbine cited a range of problems brought on the city by the housing crisis, ranging from neighborhood destabilization to speculative construction that has left buildings standing empty. To address them, he said, the city is creating the Center For New York City Neighborhoods, which provides resources like counseling and legal services citywide.

The city does not have a tenant program, the hope being that if you help the owner, the tenant will also be taken care of. Renters, however, can call for advice.

By the time the city gets involved, it might be too late the help the landlord. And some owners simply walk away from buildings that they can no longer afford.

Carmelo Casiano and his mother, Gregoria, have been living in the same building on Dekalb Avenue in Bushwick, Brooklyn, since Mr. Casiano got a divorce more than 20 years ago.

Their landlord disappeared some five years ago, and eventually the building went into foreclosure. Since then, it has fallen into disrepair, losing everything from heat to pieces of the ceiling.

Late last year, Sister Kathleen Maire of the Bushwick Housing Independence Project, began helping the Casianos and their neighbors sort out the legal and physical mess of their building.

She is helping them apply for “7A” status, under which a court-appointed caretaker collects rent and administers an abandoned building. The rent goes toward utilities and repairs. If their building is sold instead, they may well have to move.

Sister Maire says she thinks that the city housing department makes an effort to respond to complaints and keep people’s apartments safe, but “they just don’t have the staff.”

When the landlord leaves, she added, “What it does, is put a terrible burden on the tenants.”

Even Renters Aren’t Safe,
NYT,
13.4.2008,
https://www.nytimes.com/2008/04/13/
realestate/13cover.html

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