Families who bought into an affordable housing co-op in the Bronx say their ownership rights vanished almost overnight when New York City transferred their building's deed in 2018.
After litigation that began in 2019, the city has agreed to a $60 million settlement while many residents say the damage to their families' futures is far from repaired.
Here's what to know
According to ABC7 New York, the proposed settlement would cover hundreds of people swept up in the city's 2018 use of third-party transfers — a program the city used for buildings it viewed as physically or financially distressed.
For some co-op owners, that policy meant the city handed the deed to a nonprofit operator, and their status shifted from owners to something more like renters, without compensation or notice.
In 2019, attorneys Yolande Nicholson and Matthew L. Berman took the issue to federal court.
"There's a clause in the constitution which says that government shall not take private property for public use without just compensation," Berman said.
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The city carried out third-party transfers on more than 500 properties in multiple rounds. A City Council probe found that most of those properties were in minority communities and that "half of the properties selected...were not statutorily distressed."
More background
When Isabel Adon bought into the affordable Bronx co-op on Nelson Avenue in the late 1970s, she saw it as something her family could hold onto for the long term.
"That was the legacy for my kids," Adon said.
She said those dreams disappeared with almost no warning. "Overnight, we went from an owner to unknown status and none of us knew what was going on or what was happening."
Junior Gonzalez, another former co-op owner in the building, said he made his purchase after serving in the Marine Corps.
"It caused a lot of sleepless nights," Gonzalez said. "It's like I'm fighting another battle, fighting another war and now the people around me are affected, not just the people around me but the people who look like me are affected."
In a city where homeownership can feel out of reach, affordable co-ops may be one of the few realistic ways for families to build equity. Losing that ownership stake can wipe out savings, housing security, and plans for future generations.
What's being done?
The proposed $60 million settlement still needs a judge's approval, and residents must also sign off before it can move forward.
Even if approved, the agreement would apply only to people affected by the program's 2018 deed-transfer round, not everyone impacted over the program's full life, according to ABC7 New York.
City officials have said they still want to preserve third-party transfers in some form. In a statement, a spokesperson for NYC Housing Preservation & Development said, "The Mamdani Administration and the City Council are working together closely to update and strengthen TPT in a way that addresses the concerns outlined in these suits and that better serves New Yorkers and our goal of creating and preserving safe, stable housing for tenants."
The plaintiffs' lawyers do not believe reform will be enough.
"I don't know how you reform something that's been shown not just in our litigation but by the U.S. Supreme Court, to be widely, systemically illegal," Nicholson said.
Berman argued that if the city wants to pursue public policy goals involving private property, it already has eminent domain and should use that legal route instead.
The fight continues for families whose ownership rights were taken in earlier rounds. Gonzalez said, "We're not jumping for joy, we're just a little bit relieved that at least this got a little bit of attention."
"This is a systematic way of not allowing people who look like me to have intergenerational wealth," Adon said. "It's not allowing me to have for my children, not allowing me to have a piece of the American dream."
Where can I learn more?
Housing rules and ownership disputes can be a huge point of contention for homeowners, making life frustrating and, in some cases, upending people's lives.
• In New York City, a co-op board blocked a renter from switching to induction cooking.
• In Vermont, families fear being forced to abandon homes they own but cannot move.
• A condo resident learned they could be fined for drying clothes outside.
• New York City building owners warned an emissions law could drive up costs and lawsuits.
• Across the U.S., homeowners are fighting back against HOAs that block climate-friendly yard changes.
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