City Council Introduces Bills to Combat 'Predatory Equity'
The City Council recently introduced a set of bills aimed at limiting the practice of buying rent-stabilized units at prices that advocates say make sense only if some tenants are ultimately replaced by higher-paying ones. The council members are hoping that by targeting and identifying real estate professionals involved in these “predatory equity” transactions the attention may stem aggressive tactics used to push out rent-stabilized tenants.
Specifically, the bills (Int. 1210-2016 and Int. 1212-2016) would require HPD to create and maintain a watch list of lenders and multiple dwelling owners who participate in these “predatory equity”-backed purchases. The bill would also establish a temporary task force to study and recommend criteria to HPD for including lenders on this watch list and would require HPD to publish the list on its website and transmit the predatory equity lender watch list to appropriate regulatory agencies. In addition, the bill would require the Department of Finance to assist HPD in determining certain financial information about covered multiple dwellings.