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Schumer: Housing "Vultures" Hurt NYC

Wednesday, December 03, 2008

Sen. Charles Schumer says developers took out risky loans to purchase dozens of affordable housing complexes across the city. He's asking the Securities and Exchange Commission to investigate what housing advocates say were lax lending practices. Schumer says the owners mistakenly predicted they could raise rents to cover the loans, and they grossly underestimated what it would cost to operate their buildings.

SCHUMER: These are not slums; these are nice places to live. But if the kind of financial games that go on continue, they will deteriorate and we'll all lose.

REPORTER: The buildings include large rent-stabilized complexes such as Stuyvesant Town and Peter Cooper Village. In September, financial analysts estimated the property's reserve fund could be depleted by next summer. In response, the company says it's demonstrated its commitment to the property through the improvements it's made.

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