The New York City Urban Homesteading Assistance Board (UHAB) has a new report out that examines the “lifecycle” of predatory equity—a practice where real-estate speculators over-leverage buildings with the intention of forcing tenants out.
The report points to a potentially alarming cycle where banks, looking to stabilize their balance sheets, sell notes in foreclosure to the highest bidder at face value:
Not only has this debt-level already proven to be unsustainable, it does not account for the already deteriorated conditions. Thus, affordable housing stock in NYC is being swept into a second round of Predatory Equity. Tenants suffer throughout the process.”