de Blasio Proposes to Seize Apartment Buildings by Eminent Domain
Despite continually boasting of the supposed successes of his housing plan, spending hundreds of millions of dollars on rental subsidy programs, and creating a right to counsel for tenants in Housing Court, the reality is that Mayor Bill de Blasio continues to fail in his efforts to reduce the number of people who are homeless in the City. That number (approximately 62,000) continues to be an enormous embarrassment to the Mayor who has now been elected twice based upon his promises to fix this problem.
On December 12th, in a desperate attempt to create the appearance that his Administration has an actual strategy, Mayor de Blasio announced that the City would help not-for-profit developers acquire so-called “cluster site” apartment buildings which are currently used to house homeless families and convert them into permanent affordable housing. The Mayor also stated that in those cases where owners refused to sell their buildings, the City would acquire them through eminent domain.
This announcement raises numerous questions such as:
(1) Assuming the plan is even legal, will it make a meaningful difference in reducing the number of homeless if it is implemented? Not really. The City has identified 25-30 buildings where at least 50% of the apartments are used to house the homeless. According to the Mayor, these buildings are home to approximately 800 homeless families. Altogether, there are over 2,200 homeless families currently living in cluster site apartments throughout the City. The unfortunate fact is that this plan will not actually provide more housing for the homeless; instead, it merely takes the building from the current owner and gives it to a not-for-profit owner. Assuming owners agree to sell their buildings, the cost will be an extraordinary taxpayer expense. Furthermore, the building then comes off the property tax rolls, shifting the tax burden onto other tax-paying property owners.
(2) Why have cluster site buildings been targeted? The Mayor has been under enormous pressure from advocates for the homeless who claim that under the 17-year old cluster site program, the rents that the owners of these buildings receive exceed what the owner could otherwise receive in the private market and that these buildings are not well-maintained by those owners. To satisfy those advocates, the Mayor is now targeting the apartment building owners who actually provide housing for the homeless.
(3) What is eminent domain? Eminent domain is the same as condemnation, which is the right of the government to take private property for a public purpose. Typically, private property is taken by government for such public purposes as building a road, a park or a school. The type of eminent domain proposed by the Mayor, where cluster site apartment buildings located throughout the City could be taken by the City to provide affordable housing, seems to be unprecedented.
(4) How will this procedure work? Although few details are available, apparently the City will be contacting the owners of the particular buildings and attempt to negotiate a mutually agreeable price. While some owners may agree to sell their buildings to the City, others may not and, in those cases, the Mayor has indicated that the City will take the buildings by eminent domain. That procedure is governed by the State’s Eminent Domain Procedure Law and, under that law, an owner may be able to challenge whether the property is being taken for a public purpose and whether the City is offering fair market value for the building.
RSA will continue to monitor this situation closely in the weeks and months ahead.