Another Case For Reparations
Third-Party Transfer & the Loss of Intergenerational Wealth
The attack on Black and Brown people in the Americas has been unremitting since Europeans first set foot on the land. Whether it’s the border wall, the criminal justice system or a malevolency in bureaucratic DNA, the end result is particularly harmful to African-Americans.
This time, once again, it’s about real estate.
“This is not some bank coming in and doing some miscarriage of justice, this is a city-sponsored program that has taken away the homes of people for pennies on the dollars.” Brooklyn Borough President Eric Adams was speaking of the Third-Party Transfer program that has been stripping millions of dollars in real estate wealth from communities of color since 1996.
Adams was at a press conference held in front of the NYS Supreme Court building in Brooklyn. With him were homeowner attorney Yolanda Nicholson and homeowners Lamar Jones and Marlene Saunders and James Caldwell, President of the 77th Precinct Council.
“Look at that period, 1996 to 2019,” said Adams, highlighting that it was during that time that communities of color in Crown Heights, Bedford-Stuyvesant and Canarsie underwent a transformation during the “Gold Rush” for the undervalued real estate in those communities. Snapping up properties was seen as a way to get rich quick and Adams says, “There is a terrible picture that is being reflected here.”
“Homeownership is the cornerstone of Black wealth,” the borough president said, and he called on the city, state and federal government to conduct a “forensic investigation” to follow the paper trail from the initial targeting of the home to its eventual end use “to determine if there was any wrongdoing” along the way.
A major step was taken a week ago Thursday when Kings County Supreme Court Judge Mark Partnow vacated a foreclosure judgment against six property owners who lost their properties in Brooklyn through the Third-Party Transfer program.
Adams said this was the first time that a “Judicial Magistrate actually acknowledged what these property owners were saying all the time–they should have not lost their property in the first place.”
The Third-Party Transfer program was designed to designate sponsors to purchase and rehabilitate distressed properties. “Although the intention appears to be good – to preserve affordable housing – TPT’s misuse includes cases where properties were seized due to bureaucratic errors or provisions as minimum as late payments. We have some cases where people lost their homes due to water bills.”
Judge Partnow’s 69-page decision was clear and forceful, saying “Unjust seizures of property was not an isolated occurrence, rather, it is a widespread occurrence being experienced by many property owners who are being inequitably stripped of the valuable property rights.”
Adams said the justice also concluded that the judgments were unconscionable and ‘shocking to the conscience of the court’ based on the amount of the lien versus the value of some of the properties.
“This is horrific when you think about it,” said Adams. “Some of the cases had millions of dollars in equity but they were losing their property for thousands of dollars.”
Adams was particularly offended that there were city agencies that participated “in the removal of properties from Black and Brown communities predominantly” and throughout the city. “The justice stated, “In some instances, the City’s misleading malfeasance resulted in a manifest injustice.”
There were four action points Adams said needed to be addressed. First is for the City to “return all four family houses and smaller that are involved.” He finds the taking of these properties totally unwarranted, saying a simple lien could be in place and recouped when the property is sold. “There was no reason to go after these small homes.”
Secondly, they, the group of homeowners and supporters, “want HPD to review all large buildings in the TPT program” because many small multiunit homes were owned by members of the community who had “eked out a living to purchase a home” and now had it taken away for a tax or water bill. “We want the City to immediately return these properties to the homeowners.”
Thirdly, the property owner, or their heirs, must be made whole and the City pay the lost equity in all of the TPT seizures. “Family members and our seniors held on to property with hopes of transferring that wealth to their family members… …all of that equity is lost.” Equity in a home is usually “the only institutional wealth that communities of color possess,” said Adams. “We’re seeing and witnessing it being lost every day because of a program that the city sponsored.”
Yolanda Nicholson, attorney for the homeowners, said, “Judge Partnow’s decision affirms what we allege in the class-action complaint which was filed on March 11th that the City’s use of in re powers to take these buildings is not only improper, it’s a nullity because they do not have that power. But even more to the ‘shocking conscience’ comment made in the opinion, it is a violation of the equal protection laws of the United States Constitution of the due process laws and the City has continued to champion this and to disregard calls from state legislators, from the borough presidents across this city and it continues to barrel through people’s homes and lives and properties with impunity.”
Attorney Nicholson wants to move on to the discovery phase of the class-action suit. “We are awaiting the City’s response so we can begin to identify each and every property that was taken from 1996 to determine what the borough president said. Who lost their equity? Was the property actually in distress? Was the property actually owing an amount that met the statutory requirement?”
James Caldwell, President of the 77th Precinct Council, said he first heard about the case when the Council’s own vice president, Marlene Saunders, brought to his attention that the city was taking her $2.2 million property for a $3,792.20 bill. “We were totally outraged, so without any hesitation, we went right to our Councilman Robert Cornegy, and he basically told us, nothing they can do because the judge had already signed on it. But at that point, we as a community said, ‘Well, there is something that we could do – So, we’re going to give a big shout-out to Kings County Politics. We called Steve Witt on Saturday, he came out on Sunday, and on Monday, the story was on the website. Because of that, we got a reversal on Miss Saunders’ properties because of this great writing of the team of Steve Witt and Kelly Mena.”
But the Saunders situation was only the tip of the iceberg and Caldwell said they went back to the old-fashioned way of getting things done, “We started protesting.” They protested judges, law firms and specifically the Kings County Democratic Committee. “We hit them, and we started hitting everybody else, let them know that you cannot take our people’s property. You can’t do that,”[just come in and take 30-40 years of a homeowner’s equity].
Homeowner Marlene Saunders recounted the tale from when she was in the kitchen and heard the sound of a notice being put on her front door. The notice was telling her tenants to no longer pay her rent but to give it to Neighborhood Restore. After speaking of going through the red tape of the city bureaucracy and the courts, Ms. Saunders’ message to homeowners was to “get involved, support Eric and everyone who wants change for us the people, especially people of color, and just don’t take anything for granted. Be on top of everything you do, no matter how simple it may look, put it in a file. It might come up in ten years.”
Homeowner Lamar Jones also had his family home of 60 years restored and spoke of how “daunting” it is to go up against the Department of Finance or HPD, or any time you file a case against the City of New York. “When going through this, it all came back to community and how in a ‘galvanized’ community, no one’s issue is in isolation.”
And while six of the judgments were vacated, “there are still 20 left on that same round that haven’t been vacated yet,” said Jones.
“The real tragedy here is that the City of New York, HPD and other agencies don’t see this as their tragedy,” Adams said. “They see it as just a course of doing business, as just another number, and we’re saying ‘No.’ These are families who are being traumatized by the City of New York. That is what we need to address.”
Attorney Nicholson further noted that, “What’s most interesting about what the city has done, to the borough president’s point, is that buried in TPT, HPD was required, if the sole owner has fallen behind on taxes… to examine stabilization, retention, first and foremost. They haven’t done that.”