Mayor Zohran Mamdani's Our Home initiative aims to convert 300 rental units into permanently affordable, resident-controlled co-ops — but the model he is banking on has a documented history of financial collapse, insider fraud, and outright theft. Behind the mayor's ambitious housing agenda sits a decades-old cooperative structure known as HDFCs, and its track record is far messier than the pitch suggests.
As reported by The Real Deal, Mamdani has a plan to convert troubled rental buildings into affordable co-ops that would give tenants homeownership, housing stability, and wealth creation. The outlet's reporting, however, digs into a string of case studies where Housing Development Fund Corporation, or HDFC, buildings instead became sites of financial shortfall and scandal — because shareholders often do not pay enough in dues to keep the buildings solvent, per the same account.
A Model Built on 1970s Fiscal Crisis
HDFC co-ops trace back to New York City's fiscal collapse of the 1970s and 1980s, when the city seized landlord-abandoned buildings and eventually handed them to tenants. According to NYC's Department of Housing Preservation and Development, the city now oversees more than 1,100 HDFC co-ops built through that era of rehabilitation. The nonprofit Urban Homesteading Assistance Board, founded in 1973 under the Cathedral of St. John the Divine, authored the Tenant Interim Lease program the city adopted in 1978, which let organized tenants buy tax-foreclosed rental units for just $250 per apartment, per Wikipedia's history of the organization.
That same $250-per-unit arrangement shows up directly in two of the cases the Real Deal detailed. In East Harlem, the city sold tenants their units for $250 apiece back in 2001, and a building in Bedford-Stuyvesant saw an identical per-apartment price, the outlet's report notes. Decades later, both buildings would become case studies in what can go wrong once outside oversight fades.
Insiders Traded Units “Like Baseball Cards”
In the East Harlem building, board members and their friends took over the co-op, according to the report — renting out units they had obtained, handing some to relatives, and trading others “like baseball cards.” Some insiders reportedly kept their co-op shares even after relocating to Florida. The five-member board came to include one insider's daughter and her mother, and the board handed that same insider exclusive rights to broker unit sales along with a management contract, per the same account. New shareholders eventually grew suspicious and sued.
A Florida-based heir presented a similar pattern in a Williamsburg HDFC. After inheriting a unit from her father, she falsely presented herself as the building's sole shareholder, president, and managing agent, the outlet reported. An investigation found she had forged documents, rented out units that were not hers, and moved $442,000 into personal bank accounts over three years. She then tried to sell the building despite not owning it — a scheme a judge ultimately rejected, ruling she did not own the building.
The Bedford-Stuyvesant building offers a different kind of cautionary tale. Resident Emma Oliver said the HDFC gave residents an affordable and comfortable place to live, according to the Real Deal's reporting — even as she was later ousted as board president after embezzling funds from the building. Oliver was convicted of grand larceny and ordered to pay $122,680 in restitution. She then stopped paying maintenance fees and squatted in her unit after the board foreclosed, pushing the building to the brink of bankruptcy, though the city ultimately stopped her eviction, per the same report.
Regulators Acknowledge the Failures
Housing officials and advocates interviewed by the outlet did not dispute that some conversions have failed. Thomas Yu, executive director of Asian Americans for Equality, said some smaller limited-equity co-ops failed because they lacked the scale to handle rising expenses, and that residents often could not work together once UHAB-affiliated support organizations left the building. John Edward Dallas, director of the Interboro Community Land Trust, acknowledged that some limited-equity co-ops have failed, and said that while everyone wants economic mobility and wealth creation, few want to do the work required to sustain it.
Rafael Cestero, chief executive of the Community Preservation Corporation, questioned whether resident control is truly equivalent to economic mobility, telling the outlet that limited-equity cooperatives have not generally achieved strong financial success. Limited-equity co-op leaders broadly agree that getting shareholders to contribute sweat equity is challenging, the report notes, even as common charges and expenses have continued to rise across these buildings.
Legal Rules and Legislative Momentum
HDFC ownership already comes wrapped in strict rules. Under Article XI of the New York State Private Housing Finance Law, buyers face a statutory income cap of 165% of Area Median Income, with 2026 HPD guidelines setting 120% AMI at $142,560 for single buyers and $203,520 for a household of four, according to housing attorney Milton Coste. Individual co-op boards frequently adopt even lower income caps in their own bylaws. Units must also be owner-occupied primary residences, though the Real Deal found that rule is flouted by some shareholders, with HDFC shareholders in some buildings facing evictions and HDFC buildings appearing on the city's “worst landlords” list — 33 such co-ops made that list in 2016, per the outlet's reporting.
In exchange for those restrictions, the state allows the city to grant qualifying HDFC buildings up to 40-year local real estate tax exemptions to help low-income shareholders manage operating costs, per NYC HPD. The city also imposes regulatory agreements limiting how much financial upside HDFC owners can capture, according to the Real Deal's reporting, and UHAB may assist new HDFCs going forward in exchange for building-paid fees, the outlet assessed.
Mamdani's May 2026 “Block by Block” housing plan, a $22 billion, five-year capital agenda released six months into his administration, set targets of building 200,000 affordable units and preserving another 200,000 over a decade, according to the mayor's office. The plan launched “Our Home,” a municipal initiative aimed at turning distressed rental properties into permanently affordable co-ops, and doubled funding for the city's Open Door co-op financing program. Council Member Sandy Nurse also reintroduced the Community Opportunity to Purchase Act in May 2026, which the Real Deal reports is on track to become law without attached funding — giving HPD-certified nonprofits and community land trusts a 20-day window to express interest and 70 days to submit a purchase offer before qualifying buildings hit the open market, according to the New Economy Project.
Hoodline has previously covered how Mamdani's agenda pairs COPA with the SAFER Homes Act and constitutional limits on tax foreclosures in its $60M seized-homes settlement coverage, as well as how Brooklyn tenants and community land trusts have already begun taking over distressed buildings under the same legal tools. Today's active HDFC resale market reflects just how far these units have drifted from their $250 origins: prices now typically range from $350,000 to $500,000, spanning from $95,000 for a Bronx studio to nearly $1.9 million for a Washington Heights unit, according to 2026 tracking by StreetEasy cited by Brick Underground.
