Unimpressed With City’s Third Party Transfer Hearing Answers, Cornegy Pledges to Fix Program

Unimpressed With City’s Third Party Transfer Hearing Answers, Cornegy Pledges to Fix Program
Council Member Robert Cornegy at a press conference before last week’s Third Party Transfer Program Hearing (Image by Sam Raskin/ Bklyner)

BED-STUY — After presiding over a hearing on the recently scrutinized Third Party Transfer Program, Council Member Robert Cornegy said Monday he was unimpressed with the city’s response to the questions put to the city’s housing commissioner, and will push for legislation aimed at fixing the program.

“We had been prepared for that hearing, so everything that was said there I was already aware of,” Cornegy said in an interview Monday, a week after the hearing on the much-criticized program that allows the city to hand off certain distressed properties to private owners. “I was surprised at the very rote way that they continued answering the questions and at the fact that a lot of the answers they didn’t have.”

But Cornegy isn’t just lobbing complaints at the de Blasio administration.

Cornegy says he will push legislation in the housing and buildings committee, of which he is a chair, that he says will mend some the Third-Party Transfer Program’s flaws. Cornegy said he believes the program “at its core” is a worthwhile, intentioned one that is in need of changes but doesn’t need to be done away with entirely.

“I think it can be tweaked,” he said.

Specifically, the housing and buildings committee is mulling four proposals. One measure would mandate that the Council revisit the program every five years and update it.

“Given the wide latitude granted to HPD on this program, and their targeting of black and brown communities, the program should be subject to a higher level of scrutiny and council oversight,” reads a summary of the legislative submission.

Another legislative submission that is currently in the process of being drafted into a bill would exempt properties from being foreclosed on in areas that the city in decades past deemed “blighted” unless they are at present truly “distressed” as defined by the city.

Bill Int. 1594 would increase the threshold that qualifies a property for the Third Party Transfer program from $1,000 to $100,000.

“I think that threshold is incredibly low, when the value on some of these properties is astronomical,” Cornegy said of the proposed measure. “The idea that you can owe $1,000 on a property worth $5 million and have that property be transferred, it seems almost illegal.”

In addition, the bill would also “remove the prohibition on the Department of Finance recommending properties smaller than a full tax block for inclusion on the list of delinquent taxes,” according to a bill summary. This proposal is aimed at preventing a cluster of buildings or units on a particular block from being transferred to a private landlord— one of the Council members’ most pressing concerns at last week’s hearing.

Intro 1595 increases the transparency of the third-party transfers. The bill would mandate that the Department of Finance submit owed arrears for “any property subject to third party transfer” to each Council member.

Cornegy says his committee is set to in the fall hold a hearing on the TPT-related package of legislation, which is still being added to and finalized.

“We’re working on a package,” Cornegy explained. “We’re making sure every member who has a bill make us aware of it so we can put together a very strong package.”

In a statement, HPD spokesperson Matthew Creegan said the agency has “not yet reviewed the proposed legislation,” and that it “look[s] forward to partnering with the City Council to launch the TPT working group which will modernize this program that has served as a tax enforcement tool for decades.”

Cornegy’s latest comments come after the city-administered Third Party Transfer Program (TPT) was the subject of a tense joint housing and buildings and oversight and investigations hearing, during which Housing Preservation and Development Commissioner Louise Carroll defended how HPD has enacted the program. She argued that it was following the law as it was written years ago by the Council, but was open to supporting certain changes proposed by the body.

Created in 1996 via Council legislation, TPT was designed to respond to the climate of the  prior decades, when property abandonment was common and the city lacked sufficient funds to properly manage neglected properties. If owners of properties reach a certain threshold for money owed to the city for property taxes, sewage and water bills as well as hazardous conditions, they are put in the third-party transfer program.

If the owners are ultimately unable to pay back the city or return properties to a state of good repair, buildings are turned over to non-profit and affordable housing developers to manage them. The last TPT round—which lasted from 2015 to 2018 and did not include any single-family homes— recouped $40 million in arrears. The average home had $800,000 in unpaid taxes on it, had more than eight city-identified “hazardous or immediately hazardous” violations, according to the HPD commissioner.

Critics of the program—and how the city has implemented it— have said the city has disproportionately selected homes in low-income neighborhoods that are majority people  of color. Indeed, a City Council report on the properties selected for third-party transfers during the most recent of ten rounds of it showed that few of them were in Queens, none in Staten Island—the city’s whitest borough—and 192 of the 420 buildings were chosen in Brooklyn, disproportionately in predominantly black central and eastern Brooklyn.

When pressed on this gripe, HPD’s Carroll said last week during the hearing that when the city does its TPT selections, it is not looking at racial data.

“All we are looking at it how much money is owed to the city,” she added.

Cornegy, who represents Bed-Stuy and northern Crown Heights, wasn’t convinced.

“I thought the questions around race and ethnicity as it related to the stripping of wealth were not answered effectively,” he told Bklyner Monday. “The idea that there are communities throughout the city that were seemingly targeted, there was no answer for that.”

On Thursday at 1 p.m., Cornegy will hold a press conference in the Borough Hall rotunda to discuss the findings of a City Council investigation into third-party transfers.

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