Community Land Trust Shaking Up Apartment Ownership In Brooklyn

A community land trust has made a historic acquisition of a 21-unit apartment building in Brooklyn that it plans to keep affordable in perpetuity.

The East New York Community Land Trust purchased the rent-stabilized building at 248 Arlington Ave. in July 2023 for almost $3.1M, Gothamist first reported. The purchase was funded with a $1.6M mortgage from the National Housing Trust Community Development Fund, public records show.

The Cypress Hill acquisition is the first time that a community land trust has bought New York City property from a private landlord, ENYCLT Campaigns Director Hannah Anousheh told Bisnow. Now, ENYCLT plans to convert the building into a co-op.

The New York State Division of Homes and Community Renewal awarded the property a $19K grant to fund its conversion, per Gothamist. ENYCLT also received around $700K in loans from individuals with interest rates between zero and 3%.

The nonprofit CLT owns the land below the building, while tenants can purchase or lease their units at permanently affordable rates. As part of the CLT arrangement, residents can’t sell the apartments at a significantly higher price than they paid for them if they ever decide to leave.

"We’re really excited to expand this model. This is really just the start," Anousheh said. "We had tenants from other buildings attending the 248 Arlington meetings because they want to do this in their buildings. There is such a demand and interest in this model."

Rents in the property currently average at around $1,200 a month, per Gothamist. The acquisition and conversion come amid a housing affordability crisis for many New Yorkers, and at the same time as some owners of rent-stabilized properties seek to offload as rising maintenance costs and limits on rent increases eat into revenues.

“We’re making sure that it’s affordable in perpetuity and making sure any fixes that our people need, both emergency and long-term, are getting done and being planned for,” ENYCLT President Boris Santos told Gothamist. “We see our role as stewards.”

The CLT approached the property’s previous owner, a shell company linked to private investor Philip Knoll, in June last year and quickly negotiated the sale. Knoll had owned the property since 2018, just a year before the Housing Stability and Tenant Protection Act, legislation that among other measures limits owners’ ability to pass maintenance costs on to tenants, went into effect.

“We wish the new owners and the community the best of luck,” Knoll told Gothamist.

One of the obstacles facing CLTs even as they garner political support is the cost of maintenance and repairs. The Arlington Avenue building will require renovations and maintenance that include broken windows, lock repairs and a new front gate.

The ENYCLT has received estimates of around $2.8M for a major rehab of the building that would include replacing its oil-burning boiler, but it could cost even more than that, Anousheh said. However, buying from a private landlord means that the CLT is inheriting a building in far better condition than properties that the city has previously handed off to CLTs in the past, she said.

"One of the reasons we’re so excited about this model is that oftentimes the buildings that have been transferred to CLTs or other nonprofits from the city are in extreme disrepair," she said. "This building, the tenants were really excited to work with us because they know this building could be so beautiful. It’s not in horrendous condition. That being said, there has been a lot of deferred maintenance."

The Department of Housing Preservation and Development hasn't committed to providing funding, Gothamist reported. Nonetheless, the ENYCLT has managed to raise more than $1M in private donations and is looking for additional government funding, meaning that it will likely be able to complete necessary works without raising rents, Santos told Gothamist.

"New Yorkers are depending on us to explore any and all possible solutions to the housing crisis, and that includes providing community land trusts with technical support and resources whenever possible," HPD spokesperson Ilana Maier told Bisnow. "The East New York Community Land Trust pulled together an impressive amount of private resources to make this purchase. We’re excited to build on conversations we started with the CLT years ago.”