Stim Bucks for Slumlords? Slumlords get share of $81M stimulus, despite code violations on buildings

BY Tina Moore

Sunday, August 16th 2009

Some of the city’s worst landlords are sharing in $81 million in federal stimulus money – even though their buildings are riddled with housing code violations.

Since March, millions of dollars have been doled out to buildings where tenants have repeatedly complained of rats, roaches, faulty elevators, lack of heat and flaking lead paint.

Millions more will follow.

The problem is that the Recovery Act distribution makes no distinction between good landlords and bad ones.

As a result, landlords – regardless of the number of serious housing code violations they’ve racked up – are allowed to pocket stimulus money without being forced to make repairs.

Seven properties that have received – or been promised – taxpayer dollars would qualify for a Slumlord Watch List proposed by City Councilman Bill de Blasio, a Daily News review found.

“There’s something really wrong with landlords that make it on this list. … They certainly shouldn’t be getting stimulus money,” said de Blasio, who is running for public advocate.

“The stimulus is supposed to create jobs. I’m concerned that we’re going to have to watch [this] very closely.”

The seven properties that would make his list are slated to get more than $1.5 million in federal stimulus money this year.

To make de Blasio’s list, properties with 35 units or more must average at least two “hazardous” or “immediately hazardous” housing code violations per unit.

One property that qualified was 234 Herkimer St. in Bedford-Stuyvesant Brooklyn.

The 138-unit building had 374violations, including mold, water leaks, missing smoke and carbon monoxide detectors, broken floors, mice and lead-based paint. The building’s owner, Restore Housing Development, is to get $270,602 in stimulus cash.

The owner of an apartment building on Morningside Ave. in Manhattan got a boost of $630,000 in Recovery Act funds despite 132 violations. Problems included an inadequate supply of heat, peeling paint, exposed electrical wires and roaches.

That building fell just short of making de Blasio’s list, with 104 of the most serious violations in 53 units – slightly less than two dangerous violations per unit, records show.

So did a Bronx apartment building that is getting $1,514,016 despite 110 violations – 90 of them tagged dangerous.

The 49-unit building was cited for a leaky roof, roach and mice infestations, moldy ceilings, and broken toilets and tubs, records show.

The U.S. Department of Housing and Urban Development defends giving stimulus money to properties with housing code problems.

Regional spokesman Adam Glantz said without Recovery Act money, HUD would have to cut back on housing subsidies under a program called Section8.

To qualify for stimulus money, landlords had to be in “immediate or potentially serious financial difficulty,” HUD said.

The agency said the Recovery Act includes measures to “protect those in greatest need,” along with promoting job creation and economic growth.

HUD was unable to say how many jobs have been saved or created with the emergency distribution of this taxpayer money.

Real estate mogul Naftali Frankel got $465,312 in Recovery Act funds for his properties, including $39,782 for a building at 1569-1583 Prospect Place in Crown Heights.

The city has 203 open violations against Frankel at that property – 170 deemed “hazardous.” After two unsatisfactory HUD reviews, Frankel was forced to hire a new management company.

“I am the owner, and I take good care,” Frankel, 83, said in an interview. He insisted he and the new managers are addressing issues such as upgrading security cameras and replacing the broken front door.

He said tenants often made it difficult to make repairs by not being home for appointments. Of the stimulus dollars, Frankel said, “Whatever has to be fixed will be fixed.”

One of Frankel’s Prospect Place tenants has her doubts.

Stacey Jordan said she cried in April when her kitchen ceiling collapsed because of plumbing problems in units above hers.

A section of the floor became soggy because of flooding in the basement. About a dozen floor tiles are missing, and the area feels soft enough to put a foot through.

The management company installed Sheetrock over the collapsed ceiling after she called repeatedly, but hasn’t returned to sand and paint, records show.

The city gave Frankel 12 violations for a “broken or defective wood floor,” a ceiling in need of further repair, mold and mice.

As Jordan spoke, her son, JJ, bounded past like any exuberant 10-year-old on summer break.

“Be careful!” Jordan yelled out. “I’m afraid he’s going to fall through the kitchen floor,” she said. “It’s real weak. I don’t want to live like this. I pay my rent.”

Manhattan Borough President Scott Stringer wants landlords to use stimulus cash to fix violations.

“That’s how you create jobs, that’s how you make the building worth more,” he said. “That’s how you stimulate the economy.”

Stop Slumlords from Perpetrating Crimes to Victims Petition

About Sharon Kramer

Hi, I'm an advocate for integrity in health marketing and in the courts.
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