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New York City faced serious housing problems in the late 1960s. The Mitchell-Lama Housing Program was created in 1955 to build affordable housing for middle-income residents, but the city's affordable housing stock for low-income residents was deteriorating rapidly due to a vanishing tax base, corporate disinvestment, and increasing social problems. A wave of abandonment by landlords of their deteriorating buildings ensued. They neglected their maintenance responsibilities and refused to pay tax assessments and other fees to the city. By 1992, the city acquired through default 45,000 residential units, most of which were in low-income, minority neighborhoods.
To some, the city did not make a much better landlord than the landlords it had replaced. Once a building came into receivership, it sometimes took months for the city to begin collecting rent and managing the building. Stories were reported of people freezing to death in city-owned buildings. Efforts to form co-ops were initiated by tenants of these buildings out of frustration with the city. In Harlem, where the tenant population was dominated by the African American community, tenants perceived their neglect by city agencies to be driven by racial prejudice and pushed tenant ownership as a direct solution.
In the 25 years since, tenants and advocacy groups like The Urban Homesteading Assistance Board have taken control of more than 1,300 buildings. Two of the most noted programs grown from their efforts include the Community Management Program (CMP) which sold buildings to nonprofit organizations, and the Tenant Interim Lease program (TIL) which sold buildings to tenant associations.
TIL, through which most limited equity co-ops in New York were developed, started in 1978. Through it, tenants lease their building from the city for a period during which they demonstrate their ability to manage and improve the building and obtain financing and insurance. While some buildings have failed to move from TIL to ownership due to financial or leadership problems, the majority of tenant associations in TIL have succeeded in purchasing their buildings to become a LEHC. Recently, the city has transitioned TIL into a "third party transfer" program through which distressed buildings are first transferred to a nonprofit holding group during foreclosure and then to another nonprofit for rehabilitation and co-op conversion.
After 20 years of operation, the New York City Council celebrated its re-commitment to the TIL Program as the most effective long-range solution to properties that were foreclosed. Its $75 million annual investment has helped clean up buildings and neighborhoods, and cultivated civic pride in residents.
Currently, there are more than 1,300 LEHCs in New York City, comprising tens of thousands of units. The generation of co-ops that emerged in the late 1970s and 1980s played a key role in preventing affordable housing stock from disappearing in the current inflated housing market.
The broader trend in New York City has also been felt in Harlem. The earliest co-op in Harlem dates back to the Harlem Renaissance. Black leaders like A. Philip Randolph and Adam Clayton Powell acknowledged the racism that prevented blacks from obtaining mortgages. They advocated group ownership. The more than 300 LEHCs in Harlem today reflects the strong tradition in housing advocacy from the 1920s and make limited equity housing cooperatives an effective model for community stability. Today, the cooperative movement in New York secures a significant portion of the affordable market. While the recent economic expansion challenges the affordability of all types of housing in New York, LEHCs remain an anchor for low-income housing in Harlem.
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