The Lifecycle of Predatory Equity
Posted by Matthew Brian Hersh on March 15, 2012
The New York City Urban Homesteading Assistance Board (UHAB) has a new report out that examines the "lifecycle" of predatory equity—a practice where real-estate speculators over-leverage buildings with the intention of forcing tenants out.
The report points to a potentially alarming cycle where banks, looking to stabilize their balance sheets, sell notes in foreclosure to the highest bidder at face value:
Not only has this debt-level already proven to be unsustainable, it does not account for the already deteriorated conditions. Thus, affordable housing stock in NYC is being swept into a second round of Predatory Equity. Tenants suffer throughout the process."
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Matthew Brian Hersh proudly served as senior editor at Shelterforce from March 2008 to October 2012. He studied English at Rutgers University and has spent his professional career in journalism, policy, and politics. He displays many of the trappings of a New Jersey sports fan: dispirited Mets fan, former Nets fan before they left the state, and normally satisfied Giants fan. Hersh lives in Highland Park, NJ with his wife and two children.