A group of tenants of rent-stabilized apartment buildings once in the portfolio of the failed Signature Bank say conditions haven't improved fast enough since the New York City Employees’ Retirement System invested in their buildings' mortgage loans in 2024.
The bank's failure in March 2023 set off a period of deep uncertainty in New York City’s housing market. The bank, brought down by cryptocurrency investments gone bad, had served as the city’s largest lender for owners of rent-stabilized apartment buildings, including many who appeared on the city’s worst landlord list and who took on debts they struggled to repay.
What followed was a scramble to save the buildings from lenders who might try to squeeze more profit from the distressed properties at the expense of tenants, and instead find investors committed to overseeing repairs and preserving the units as affordable.
First, a consortium of local housing finance groups partnered to take over the loans for more than 1,000 of the buildings — accounting for over 30,000 apartments, most of them rent-stabilized. Then, in May 2024, a city pension fund overseen by then-Comptroller Brad Lander invested $60 million to become a 25% partner in the venture, known as Community Stabilization Partners.
Political leaders and tenant advocates cheered the intervention. Lander, who is now running for Congress, has touted the move as his crowning achievement in office. And Community Stabilization Partners say their efforts are putting the buildings on a path to financial stability, and better conditions for renters.
But after more than two years, some tenants in the buildings are getting impatient. They point to thousands of open housing code violations across the loan portfolio and over 180 lawsuits the city has filed against building owners, according to data tracked by the nonprofits JustFix and University Neighborhood Housing Program.
“It hasn’t lived up to the promise and it hasn’t really improved things,” said Harlem renter Adam Blazej, an organizer with the Signature Tenant Coalition, a group of renters in the buildings once financed by the defunct bank.
The group is meeting with the pension plan’s board of trustees to discuss their problems and describe their goals to improve living conditions, including a plan that would allow tenants to play a role in selecting new buyers for their properties and issue a scorecard of individual property owners to call attention to maintenance issues.
They also want Community Stabilization Partners to more clearly describe the intervention in a way that more tenants — who hear politicians, like Lander, talk about “saving” their derelict apartments — can understand.
In an interview, Lander, who is now challenging U.S. Rep. Daniel Goldman in the Democratic primary for the 10th Congressional District, said the venture did prevent the loans from being sold to “bottom-feeder” speculators with little regard for the well-being of tenants. The buildings are now on a path to stability – though a longer one than many tenants would like, he said.
“If it raised people’s hopes or expectations faster than it’s delivered on them, I’m sorry about that,” Lander said in an interview Tuesday. “I still think it was so much better than the alternative could be.”
A spokesperson for the city’s pension fund referred questions to Comptroller Mark Levine, who did not immediately respond.
The tenant group’s efforts coincide with a citywide shift in political power when it comes to housing. Renters are demanding more control over their apartment buildings after helping fuel Mayor Zohran Mamdani's successful campaign. Since taking office, Mamdani has centered tenants at the core of his housing policy. City Hall has already attempted to influence the sale of dozens distressed apartment buildings in the past five months in potential deals similar to what some Signature tenants have envisioned.
But leaders from the Community Stabilization Partners say there is a gap between tenant expectations and what they are trying to accomplish as loan managers to ensure building owners pay their loans and fix housing problems.
The venture involves an array of corporate-sounding housing firms with a mission-driven focus, including the nonprofit financing company Community Preservation Corporation, the private firm Related Fund Management and the nonprofit Neighborhood Restore.
“Maybe this wasn't framed properly by some parties at the beginning, this idea that we were going to come in and start doing repairs,” said Community Preservation Corporation Vice President Robert Riggs said in an interview last week. “We're not the owner. We don't operate. We don't manage. We can create a set of incentives that is going to improve things over time.”
Riggs said Community Stabilization Partners will offer debt forgiveness and loan modifications for owners who make loan payments, address housing code violations and stay out of the city’s emergency repair program. In many cases, Signature issued hefty loans that landlords could only repay by raising rents — leaving the owners “overleveraged” when new state laws sharply curtailed methods for increasing rents. Inflation and rising costs further strained landlord finances.
But Riggs said the goal is to incentivize actions by owners that put the buildings on firm financial footing and correct problems facing tenants — not to take properties away so that tenants or nonprofit buyers can purchase them.
“This is not a program to kick out bad owners. This is a program to support good owners,” Riggs said. “You get another bite of the apple, the incentives are lined up, the economics work, and owners have a chance to do it.”
Conditions in the buildings may be gradually improving overall, according to data tracked by the organizations JustFix and University Neighborhood Housing Program.
Monthly housing code violations at 1,018 buildings in the Community Stabilization Partners portfolio decreased from a January 2024 peak of about 3,200, to about 2,800 last month. City data shows a steady overall rise in violations across the five boroughs over the past three years.
Eviction filings in former Signature-financed properties decreased from about 3,600 in 2023 to 2,700 last year, the data shows. Actual evictions have ticked up, but University Neighborhood Housing Program data analyst Ana Peña said that may be due to the length of time it takes to complete evictions filed years earlier.
Riggs said the venture will take buildings from some owners who fail to make their debt payments and correct problems.
Community Stabilization Partners has started foreclosure proceedings at 42 buildings, Riggs said. He estimated that it may eventually transfer 20 to 25 buildings to so-called preservation buyers, like nonprofit groups.
At a rally outside a building in Jamaica last Thursday, tenants said they want to be involved in one of those deals.
Community Stabilization Partners foreclosed on a building on 161st Street, a short walk from the Parsons Boulevard subway station, after its owner, Ved Parkash, defaulted on a mortgage loan in 2024. The mostly rent-stabilized building has been the subject of 229 complaints over the past two years and received 34 violations from the city’s Department of Housing Preservation and Development for problems like mold and faulty self-closing doors.
Nestor Escalante, a waiter, said his neighbors on higher floors struggle with a chronically broken elevator. Manuel Villagomez, a construction worker who moved into the building six years ago, said the heat frequently shuts off on the coldest nights.
“This past winter, it was like being in a mortuary,” Villagomez said in Spanish.
A spokesperson for Parkash Management said the company is in the process of installing new elevators and correcting other problems in the aging building, which was constructed in 1941.
Community Preservation Corporation officials declined to discuss specific buildings in the venture’s loan portfolio, but said they understand the anger among tenants advocating for improvements.
“That frustration is real for any tenant in any building if they've been dealing with something for decades,” said Community Preservation Corporation Chief Strategy Officer Erin Burns-Maine in an interview last week.
“Our North Star is long-term affordability, long-term preservation, making sure we're increasing physical quality and financial stability of the properties in this portfolio,” she said. “We're absolutely making progress towards that goal.”
But, she added, “success will be measured in years and not months.”
