Kim Darga
2:00:35
So there are maybe 3 stages to think about here.
2:00:38
There is what happens prior to a foreclosure.
2:00:43
So once the city requests the judgment of foreclosure, We then flyer the building.
2:00:48
We notify all residents of the status as well as the opportunity to petition to be a cooperative.
2:00:57
Residents have approximately 4 months from that point in time, the date would be identified in the notification to them to submit the required materials.
2:01:07
And only certain buildings are eligible to petition So building has to be at least 10 units 50% occupied.
2:01:19
And then they have to be able to identify a sponsor that is interested in working with them.
2:01:24
We have a prequalified list.
2:01:26
They can look at And they also, at least 80% of the residents have to sign the application expressing interest.
2:01:43
And then so that's kind of the 1st stage.
2:01:46
At that point in time, you know, the the sponsor will work to after foreclosure, will work to identify the renovation needs and put a financing plan together to stabilize the housing.
2:02:02
Once the developer owner closes on financing, meaning they take title, They have the financing necessary to renovate the building.
2:02:12
That then brings us to the next stage.
2:02:15
During that period, tenants may need to relocate, so they have to cooperate during the relocation process.
2:02:22
And they have to at least 80% of the residents have to attend training.
2:02:27
At least 80% have to be in good standing on their rent payments.
2:02:34
At least 80% have to remain interested, and those requirements exist basically through the point in time construction completes, and the conversion process starts.
2:02:46
So if the residents cannot demonstrate, they can meet those 80% milestones.
2:02:52
At that point in time, the property would be deemed ineligible and would be an affordable rental property.
2:03:02
So tenants were not displaced as part of that process.
2:03:05
But that is the point in time where there has to be a final decision.
2:03:09
And some of our concern is that sometimes that period has stretched a long time because everybody We want to give the residents the best chance at converting.
2:03:22
It's been nobody wants to make the hard decision of saying no.
2:03:27
And but it does really need to be a firm line requirement.
2:03:31
Because otherwise you risk destabilizing the housing itself because the property is still oftentimes in construction with a construction loan that needs to be paid.
