A controversial program to take derelict buildings away from negligent landlords may get a revamp.
The Third Party Transfer program, created in 1996, took buildings from landlords who were behind on either property taxes or water bills, and had amassed a significant amount of housing violations.
Run by the city’s Department of Finance and the Department of Housing Preservation and Development, the program turns run-down properties over to nonprofit entities, which work to physically improve and financially stabilize them as affordable housing.
But the program ensnared many homeowners in majority Black and Brown neighborhoods, taking away their homes and key sources of generational wealth — leading to its multi-year pause.
Councilmember Pierina Sanchez (D-The Bronx) wants to take a crack at reforming the program, with an aim of narrowing in on “the worst of the worst” offenders. During a City Council committee hearing Monday, she said the revamped effort would target delinquent owners of dilapidated buildings who owe years’ worth of taxes and fees.
Sanchez proposed legislation — known as the “Stability, Accountability, Fair Enforcement for Residents” or SAFER Act — that would change the distressed properties that could be included in the program. It would also give more notice to property owners and tenants, require repairs to be made to exit the program and allow owners opportunities to avoid the transfer in some cases.
One provision of the current program allowed that if one property on a block qualified for Third Party Transfer, all properties on that block could be subject to foreclosure. Sanchez’s bill seeks to get rid of what she described as a “disastrous” provision..
The bill has 32 council sponsors, just two shy of a veto-proof majority — though Council Speaker Julie Menin is not one of those sponsors and has not taken a position on the bill, a spokesperson said.
HPD officials on Monday indicated they largely support the overhaul of the Third Party Transfer program.
Attendees of the City Hall rally for reforms to the Third Party Transfer program hold signs, March 9, 2026. Credit: Ben Fractenberg/THE CITY
Less than 2% of the city’s housing stock have both extensive tax delinquency and serious housing violations, and only a small number of properties would be eligible for Third Party Transfer, according to city officials.
“The Third Party Transfer program is designed to focus on a narrow subset of these severely distressed properties where other enforcement, outreach or preservation tools have not resolved the underlying instability and where residents need housing stabilization,” said Rosa Kelly, HPD chief of staff.
“By reforming TPT, the city can ensure that this powerful program focuses on properties with the most delinquent debt and recent violations, so that the buildings can be stabilized and improve housing quality for residents,” she continued.
Several real estate and housing advocacy groups back the effort to remake Third Party Transfer, including the Real Estate Board of New York, Open New York, Center for New York City Neighborhoods and Community Service Society.
Long Road to Reform
Sanchez, chair of the council committee on housing and buildings, has made transforming the Third Party Transfer program a priority in the new year, she told THE CITY in an interview and in remarks last week at a New York State Association for Affordable Housing event.
The revamped program as outlined in her bill would involve “pretty much throwing away everything about how we used to do Third Party Transfers as the city of New York,” she said.
The city suspended Third Party Transfer in 2019, after many Black and Brown homeowners, landlords and co-op shareholders complained the program unfairly stripped them of property rights when they owed only a small amount of property taxes. The city put together a task force to figure out how to modernize the program, but reforms never advanced.
Sanchez pointed to a building in her district as the “poster child” that would make a great candidate for a new version of Third Party Transfer: 2201-2205 Davidson Ave. in The Bronx’s University Heights neighborhood.
The landlord owed tens of millions of dollars in unpaid taxes to the city and racked up hundreds of housing violations, records showed. For years, tenants dealt with persistent leaks, pests, elevator outages and other poor conditions, and begged the city to foreclose on the buildings and turn them over to nonprofit or cooperative ownership.
Last year, the city used the Third Party Transfer program to convey ownership of the buildings to the nonprofit Neighborhood Restore and property management company Lemle and Wolff. The new owners would repair the buildings and eventually convert the apartments into affordable cooperatives, so tenants would become owners. It was the first time in seven years the city removed property from its owner.
In the meantime, other tenants living in subpar conditions rallied Monday morning in support of the bill to overhaul the Third Party Transfer program.
Angelette Waring, a tenant in The Bronx building, said she is living without heat and hot water, with holes in the walls and floors and bubbled walls. Her bedroom ceiling collapsed a couple of weeks ago and was repaired on Friday, she said.
“This is a frightening place to live. This did not happen overnight. It happened because our building was neglected for years, and allowed to deteriorate like this,” Waring said, pointing to the new legislation as one that would allow the city to step in “to hold bad landlords accountable and ensure that buildings are rehabilitated and preserved as safe, affordable housing.”
Related