A federal court ruled three Brooklyn homeowners of color can move forward with a class action lawsuit to recover their wealth lost through New York’s Third Party Transfer (TPT) program.
The homeowners all lost their residences from alleged illegal seizures taken in “in rem” foreclosure proceedings under the TPT program. The city conducted the seizures under the Department of Housing, Preservation and Development (HPD), which confiscates the entire property value of a home from the owner, even if the owner only owed a few thousand dollars in water or sewer charges or taxes.
HPD would then give the property to development organizations of the administration’s choosing for free or a small fee. Two nonprofits, the Neighborhood Restore Housing Development Fund and BSDC Kings Covenant Housing Development Fund Company, are now defendants in the case according to the Brownstoner.
McConnell Dorce, Cecilia Jones and Sherlivia Thomas-Murchinson say their properties were stolen from them by the TPT program and given away.
“The TPT program has affected my family in many ways. My family and our neighbors who should have remained shareholders in the building have lost real, personal and future assets and value in the millions of dollars, not even measuring the value of having a home for the long term,” Thomas-Murchison told the BKReader. “My now deceased mother worked, for close to 25 years, to ensure that our family would have long-term residency in an already-existing affordable housing co-op. The City took that away with the stroke of a pen.”
The group wants to represent a class of minority property owners across the city who have lost their homes to the TPT program without compensation.
The plaintiffs already won one battle when the city challenged their right to file a class-action suit, arguing the case should be argued in state court. The group successfully argued the case is a federal issue that falls under the 5th Amendment of the U.S. Constitution, which requires just compensation for the taking of a person’s property.
When the suit was initially filed, the plaintiff’s homes were valued at $66 million combined. Today, they are worth significantly more as the neighborhoods and the city has largely been gentrified. The suit is also seeking the equity value of hundreds of properties dating back to the 1990s that have been taken under the TPT program.
Many of the homes, including the plaintiffs’ residences, were in the Crown Heights and Bed-Stuy neighborhoods of Brooklyn. Both are predominately communities of color with Black Americans and immigrants from Caribbean countries including Jamaica, Haiti, Trinidad, Barbados and others.