For Low Rent, Squatters Get High-End Manhattan Homes

The early history of real estate is filled with people planting flags or raising swords, moving in and proclaiming ownership.

But many New Yorkers were surprised when, under a controversial new city policy, a group of squatters took legal possession of several buildings in the high-rent Manhattan area where they had been living illegally for years.

In August, the city sold 11 buildings on the Lower East Side for $1 each to a nonprofit agency, which will hand them over to the 236 squatters who live in them.

“Responsibility -- that’s what it feels like,” said Baby Monroe, a subway musician who has lived in a dilapidated building at 155 Ave. C for the last few years, as he looked uneasily at a spray-painted anarchy symbol and battered skull-and-crossbones flag hanging outside the building he will partly own.

Monroe and others are happy to remain in the neighborhood. Without this deal, they would have been evicted, they believe.

Others think that they’ve just pulled off a big con in a neighborhood where rents can run $2,000 a month.

“These are folks who just take whatever they want and don’t give back,” wrote Queens resident Sonora Chase in one of several angry letters to local papers. “I will work and follow the law for another 20 years to acquire what they have snagged illegally for $1 per building.”

Carol Abrams of the city Department of Housing Preservation and Development said the arrangement was made possible because the city does not want to displace people while creating code-compliant housing.

Also, the city would rather that the squatters -- who will continue to live in the buildings while they are brought up to code -- inherited their homes rather than be shown the curb in a time of rising homelessness.

“This was a last resort,” Abrams said. “But it’s still a win-win. We can get 11 buildings up to code -- while creating affordable low- to moderate-income housing.”

The deal isn’t costing the city a dime -- the Urban Homesteading Assistance Board, which arranged the ownership transfer, is negotiating capital improvement loans ranging from $200,000 to $600,000 per building from the Washington, D.C.-based National Cooperative Bank, so the buildings can be brought into compliance with city housing codes.

The loan will then be passed on to the onetime squatters, who will become owners of the cooperative housing. This also means that the residents of each apartment will pay around $450 a month for years to come -- for many, the first time they’ve paid rent in years, although many have put thousands of hours and dollars into making needed building repairs.

A lot has changed in the last seven years.

Over the July 4 weekend in 1995, the city sent storms of police in riot gear and an armored personnel carrier to the Lower East Side to execute eviction orders at many of the buildings where squatters lived.

After a siege and several arrests, the squatters countered in court that their presence was lawful. They argued they owned the abandoned buildings under the legal doctrine of adverse possession, having occupied them for more than 10 years. Largely agreeing, a Manhattan judge barred the city from kicking many of the squatters out.

One of the buildings whose occupants were targeted for eviction was 21-23 Ave. C, called Umbrella House by its squatting founders because of a roof leak that was once so bad that an umbrella was needed indoors.

“I didn’t feel like working 10 paying jobs to live in the neighborhood I love,” said Linda Flores De Leon, 43, who has lived in the building on-and-off since 1989, with her daughter, now 12.

De Leon, whose salary as a social worker would not pay typical rents in the area, wants to keep her daughter in the local public elementary school, a magnet school with an arts emphasis.

In recent years, the neighborhood went from an open-air drug market to a place where young bond traders and New York University students sip $5 lattes.

De Leon says that because she and other family-oriented people believed in the neighborhood when everyone else was staying away, she has earned her apartment ownership.

Another Umbrella House resident, Tauno Bilsted, 31, has spent the last 10 years doing electrical and plumbing work on the building, buying materials with money collected from all who live there. “I did not have the income to pay rent” when he moved in a decade ago, he said.

Now Umbrella House keeps a “sweat equity” log. Those who don’t contribute to renovation of the building are evicted by group vote, although it is not a legally enforceable eviction.

The conditions that led to New York City’s squatter culture -- which provided the inspiration and setting, a squat on the Lower East Side, for Jonathan Larson’s hit Broadway musical “Rent” -- are not likely to reappear any time soon. In the city’s depressed real estate and economic climate of the 1970s and 1980s, many owners abandoned their buildings because it was cheaper than paying the taxes on them.

In 1987, there were 5,662 vacant buildings in the city. But in today’s healthy real estate market, there are only 524.

By the late 1990s, Mayor Rudolph Giuliani’s administration started to be receptive to a long-standing offer from the 30-year-old Urban Homesteading Assistance Board to simply turn over the buildings to the squatters.

But it was current Mayor Michael Bloomberg’s administration and the City Council that ultimately approved the deal.

If they want to move out, the old squatters are not allowed to sell their apartments for more than $9,000 -- or $6,000 for smaller apartments -- for three years, with small increases after that. Each building remains a low-income housing cooperative.

The squatters’ transition to homeowners is a new chapter in the old story of a particular brand of bohemianism.

In the 1970s and ‘80s, radicals, living in squats, closet-sized studios or tents in Tompkins Square Park, defined themselves by their rejection of the “system.” Artists put up extravagant gargoyles on the buildings to scare away developers; others squatted as a political statement, giving the community a personality.

This deal preserves some of that spirit, said Joe Center, Urban Homesteading Assistance Board associate director.

“The Lower East Side has always been a place where people have moved to when coming to New York -- Jews, Irish, Italians, Puerto Ricans and now the young of all races and religions,” said Center, whose grandparents settled there. “That’s a tradition worth preserving.”