HDFC Co-op Real Estate Tax Foreclosures A Slow-Moving Crisis in the Making

When most New Yorkers think of co-op apartment buildings, they have a vision of a stately old Park Avenue prewar residence; a shining, modern glass tower on the Hudson waterfront; or even maybe a quaint duplex in brownstone Brooklyn. But that’s not the whole picture. Co-op living crosses all socioeconomic levels. It has been a cornerstone of home ownership in New York City for lower- and middle-income residents, as well as the uppermost end of the luxury market. Co-op living has kept residents in New York City and stabilized neighborhoods that might otherwise have remained stagnant or even deteriorated. 

Speaking in purely economic terms, few would dispute the miraculous rebirth of all of New York City’s five boroughs over the past 30 years. Today, it’s hard to find a ‘bad neighborhood’ in New York (and pretty much impossible, when it comes to Manhattan). Even places that were considered less than desirable only a few years ago are seeing the ongoing effects of a seemingly unrelenting boom in development and gentrification. As rents and prices continue to soar, dedicated lifelong New Yorkers seek out alternatives in less-developed neighborhoods, bringing the boom with them,  for better or worse. But it certainly hasn’t always been that way. 

The Bad Old Days

Back in the 1970s and 1980s, New York City was on the verge of bankruptcy, and residents were fleeing in droves. The Bronx was burning, and Brooklyn was a war zone. Upper Manhattan was known mainly as a drug supermarket. 

With many rental landlords either substantially behind in real estate and water taxes or in outright foreclosure — or worse, having abandoned their buildings altogether — the city established a program to convert these properties to cooperative ownership, offering the tenants the opportunity to become owners. This program was established under Article XI of the New York State Private Housing Finance Law (PHFL) and the Business Corporation Law (BCL), which governs all co-op apartment corporations in New York.

Robert W. Snyder, an American studies professor at Rutgers University and the author of Crossing Broadway, a history and study of post-World War II Washington Heights in upper Manhattan, says of the HDFC program: “It is a policy that begins in the 1970s—the bleakest time in the economic history of New York City. What happened was that landlords were increasingly walking away from buildings, or not paying taxes. There was a crisis. The buildings were falling apart, so the city created a program whereby tenants could take over the building themselves. And this wasn’t a simple procedure. It happened in many neighborhoods.” He explained that the program was an early, if unexpected, part of the solution to the affordable housing problem in New York City. However, it was never intended as the sole solution. 


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  • Seems to me that HDFC is to co-ops the same way subprime mortgages are to mortgages. Also you don't have to be a HDFC co-op to feel like you are in one.