Vice Mayor Roxanne Qualls is asking the U.S. Department of Housing and Urban Development (HUD) to stop the sale of 748 housing units to a New York company — potentially preventing a repeat of a similar sale back to 2007 that led to dropping property values in the area.
In a press release Tuesday, Qualls argued that locals should be given the opportunity to purchase the project-based Section 8 housing in Walnut Hills, Avondale and Millvale. Currently, HUD is bypassing local communities with plans to sell the housing to a corporation controlled by the Puretz family of Brooklyn, N.Y.
“Cincinnati’s residents are still recovering from the massive disinvestment that was allowed to occur with an eerily similar situation in 2010,” Qualls said in the release, referring to a similar sale that culminated in a huge drop in property values between 2007 and 2010.
In 2007, HUD sold 618 subsidized housing units to NY Group OH 1 LLC, a company with no previous housing experience in Cincinnati, according to Qualls’ release. As the 2008 financial crisis and Great Recession pulled down the global economy, property values dropped all around the nation, but things went particularly south in NY Group’s Cincinnati buildings. The owner eventually defaulted on the housing units, and Fannie Mae foreclosed in 2010.
Property values went from $21.5 million to $7 million between 2007 and 2010, when the units were sold in a sheriff’s sale. In that time period, the buildings blighted, with residents complaining about deteriorating structures, broken lighting, bed bugs, cockroaches and mold. In one case, an apartment’s restroom ceiling reportedly collapsed.
Qualls is focused on preventing more blighted buildings: “Preservation of the housing in good condition is vital to the improvement of our neighborhoods. Our neighborhoods cannot afford to have more blight brought on by an absentee owner. Because these properties are supported by government funding, it is vitally important that HUD get public input from the City of Cincinnati and Avondale, Walnut Hills and Millvale residents and stakeholders about this proposed new transfer of HUD funded properties before making any further decisions.”
Qualls has invited the local HUD field office director to the Feb. 26 Livable Communities Committee meeting to discuss the sale. She has also written to other HUD officials, U.S. Sen. Sherrod Brown, U.S. Sen. Rob Portman and Rep. Steve Chabot to prevent the sale.