‘I Put in White Tenants’: The Grim, Racist (and Likely Illegal) Methods of One Brooklyn Landlord

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Williamsburg, Brooklyn. July 2014. Photo: Andrew Lichtenstein/Corbis

For the past three years, I’ve traveled around the city, talking with New Yorkers as they experience gentrification. There is little consensus on the topic — even the word itself is defined differently by each of us. I’ve spoken with tenants, activists, lawyers, investors, architects, construction workers, real-estate agents, drug dealers, business owners. Many people occupy several of these spaces at once, a fact that underscores just how quickly this conversation becomes complicated.

Ephraim is both developer and landlord. His thick beard and heavyset frame make him look much older than his 26 years. He is a Hasid, and he started buying buildings a few years ago, in the wake of the housing crash.

A real-estate agent introduced us. “Anything for that guy,” Ephraim told me when I asked if I could interview him. We met in Prospect-Lefferts Gardens where I found him sitting in his parked car with the engine running. I hopped into the passenger seat and went for an afternoon ride-along through the neighborhoods where he does most of his business: Bushwick, Bedford-Stuyvesant, Crown Heights. 

It is important to remember that Ephraim is one voice on a wide spectrum. And it is important to know that Ephraim is a pseudonym for reasons that will become obvious.

***

Ephraim turns the car on. I stammer through a request to hear what it’s like to be a landlord in so many evolving Brooklyn neighborhoods. Ephraim nods and stares out the window, as if he lacks the will or energy to answer such a broad question.

Do you know anything about property? There’s a deed and there’s a note.

Like with a car, if you have a lease, the title is in your name but you don’t actually own the car. The deed to the house is the same thing. If you have a mortgage, the actual thing, the house is the bank’s. So they have a note, and they can transfer it to other banks, they can sell it to big companies, they can make packages of notes. You still own the deed — that’s yours. And if the bank wants to take it from you, they have to go through the process of foreclosure. If the house has a small mortgage, that’s fine — you can sell the deed — but if the house is underwater, you can’t really do anything with it.

So we came up with the idea: The bank takes a long time before they take the property away. It can take them up to five, six years. So we go to the owner, buy from him the deed, and then we rent it out. When the market went up a little bit, about 10 percent of the mortgages were almost at market value, so we’d pay them off and keep the building. If it’s a big mortgage, I don’t have any choice; I just sit until the bank takes it away. I’m just sitting, collecting rent. And that’s it.

It’s not 100 percent — I mean, it’s legal, but sometimes in the mortgage there’s a clause that says if you sell the deed, you have to notify the bank and if you don’t notify them the bank can take the property. But even if you didn’t notify them, the bank has to go through the whole process of getting the property and that takes some time.

And the banks don’t care. They actually like when people take care of the building. Because it will actually cost them $100,000 a year — people breaking in, pipes busted. As long as everything is good, everything running, they just leave it alone until they’re taking it.

Photo: Spencer Platt/Getty Images

People that have small mortgages, they’re going to want a lot more for their deed, to give over ownership. A person that sells a deed with a big mortgage usually wants to get $5,000. They don’t care. They didn’t pay the mortgage for, like, two years — the property’s shit. So we would give them $5,000, $10,000, and they give us the deed.

We started out with this, buying over one hundred deeds, all over the place, and we collected the rent. I used to love it. But the bad part was, come Monday, I used to go to the buildings in my car, and knock on every single door. This was like five years ago. And they didn’t give me payment. One out of 10, one out of 20, maybe. And they were yelling at me, “You fucking Jew! Leave me alone!”

I got used to it. And I understand it. Not all Jewish people are nice people. Every tree has a bad apple. Some of them are really nasty and can trick their tenants. But some of the tenants put up such a fight that you have to trick them. I used to do that — but I don’t do that anymore. I did that once four years ago. I told someone, “I’m going to give you twenty grand to move — just move out first, and then I’ll give you the money.” And then I screwed them. I gave him something but not the money I told him. And he couldn’t come back to me because he wasn’t even legally supposed to live there.

Some Jewish people, they’re going to come in and they’re going to try to rip off the black tenants — and the tenants know it, there’s word of mouth. So it’s like, “Oh, a Jewish guy again?” There’s a lot of Jewish guys moving around. Like a lot, a lot, a lot of investors who are either Hasidic Jews or a little bit less, but they’re Jewish. They’re holding Bed-Stuy like this — he squeezes at the air in front of him, strangling it. So sometimes it’s like, “Hello, this was our neighborhood. What are you doing here?”

We started in East New York, but we sold everything we had. We didn’t want to be there. Most of them are either Section 8, other government programs, and even the person that pays with cash is too much headaches. So we sold everything over there and we came out all the way to Park Slope. Then we started backing up, backing up, slowly, all the way to Bushwick. This is one of the houses we’re finishing now.

Photo: Spencer Platt/Getty Images

We pull up in front of a three-story brick building. Having shed the deed-buying business, Ephraim’s now involved with acquisitions and development. And he prefers to hold and rent buildings as opposed to renovating and flipping them. Ephraim stops the car in the middle of a residential block to roll down his window and light a cigarette. The street is lined with brownstones, most of which are in various stages of destruction and recreation, rented dumpsters stuffed with shards of demolition and pallets of new Sheetrock passing by. Smoke shoots out of Ephraim’s nostrils. There is a young Hasidic man standing across the street. He and Ephraim make eye contact: Ephraim waves casually, if not reluctantly. The young man comes over to the car, his hands slouched on the window. A long silence follows then finally:

Ephraim: Everything okay? You haven’t gotten me anything.

Young Man: I’m still stretching — it’s early.

Ephraim: Bring me something. You have my number, right?

Young Man: Yeah. [Pause.] You don’t have anything for me?

Ephraim: No. What do you need?

Young Man: Multi-families.

Ephraim: Ay — you do multi-families? I thought you were selling multi-families.

Young Man: No, I’m buying also.

Ephraim: No. No, I don’t have anything. For now.

Young Man: You don’t have anything, huh?

Ephraim: No.

More silence while Ephraim makes a point of his disinterest, playing with his phone. Then:

Ephraim: If I have something, I have your number.

Young Man: Okay.

Ephraim tosses what’s left of his cigarette and moves his hand toward the button to roll up the window. The glass emerges from the door with an electric hum and the young man takes his hand away.

They’re like the new kids coming in.

He laughs. He breaks for a few more phone calls — many are carried out in Hebrew, though the profession-specific words seem to be stuck in English: brownstone, skim coating, Prospect Park. I ask him what the first thing is that he considers when deciding whether or not to buy any given building.

We’re small, so we look into places that haven’t caught on — we just did a place on Nostrand Avenue. People are not even there yet. We put in $600,000 and everyone was laughing at us. “It’s crazy, you’re over there. A building for yuppies, white people? It’s not going to work.” The building was full of tenants — $1,300, $1,400 tenants. We paid every tenant the average of twelve, thirteen thousand dollars to leave. I actually went to meet them — lawyers are not going to help you. And we got them out of the building and now we have tenants paying $2,700, $2,800, and they’re all white. So this is what we do.

Photo: Spencer Platt/Getty Images

My saying is — again, I’m not racist — every black person has a price. The average price for a black person here in Bed-Stuy is $30,000 dollars. Up over there in East New York, it’s $10,000 dollars. Everyone wants them to leave, not because we don’t like them, it’s just they’re messing up — they bring everything down. Not all of them.

Most of them don’t believe you at first. “Oh, you Jewish people you’re a bunch of thieves, you’re never going to give me my money.” But once you start actually having a base of people who know you, who you actually gave the money, it’s better. Sometimes it’s really tricky because you’ll have one person willing to leave for $2,000 and another wants $20,000. And the second this guy finds out that guy is getting 20 he says, “Hell no, I’m not leaving. I want 20, too.”

They don’t know — here he lowers his voice — that even if they get the money and they left, they could always come back. They don’t know that part. And it’s so scary sometimes because they could come up in the middle of construction and say, “It’s my property, I didn’t understand what I was signing, and I want to come back.”

Some blacks have an attorney and everything. So I try to make them happy, even if they’re going to go for $7,000 or $8,000, I’d rather give them an extra grand so they’re happy and they’re not going to think about it too much. Again, I don’t want to be a racist, but when I have a building—I can’t even say it because it’s not going to sound right.

He lowers his voice again:

If there’s a black tenant in the house—in every building we have, I put in white tenants. They want to know if black people are going to be living there. So sometimes we have ten apartments and everything is white, and then all of the sudden one tenant comes in with one black roommate, and they don’t like it. They see black people and get all riled up, they call me: “We’re not paying that much money to have black people live in the building.” If it’s white tenants only, it’s clean. I know it’s a little bit racist but it’s not. They’re the ones that are paying and I have to give them what they want. Or I’m not going to get the tenants and the money is not going to be what it is.

The scary part about doing this is, if the black guys start to realize how much the property will sell for. This is a new thing now, the past year. A million, two million dollars—it’s crazy, crazy numbers. None of them realize yet—some of them do—the amount of money you can get. The scary part is they’re going to realize they can get the same exact house in East New York for $400,000, $500,000 and they can get paid $1.5 million for their home in Bed-Stuy, they’re going to start dumping houses on the market and the market’s going to be flooded and it’s going to cool down. It’s already cooling down.

It’s so hard to get empty buildings. When you have an empty building it’s like gold. So we never flip buildings. One building we sold because in the Jewish religion there’s a weird thing where you don’t cut down a fruit tree. Some people really don’t give a shit about fruit trees. But most of the Hasidic Jewish people will not cut down a fruit tree. There’s one house in Borough Park where they cut down a fruit tree and there was nine fires over there in the last two years. Sometimes weird stuff happens. So we had a building, and the only way it’s working for us is if the fruit tree comes down. We spent $50,000 doing the plans and then found out there’s a fruit tree. We didn’t know about it. So we had to sell the building. It’s the only way I’m going to sell a building. A building is not really a selling thing. Buildings are for keeping.

DW Gibson is the author of Not Working: People Talk About Losing a Job and Finding Their Way in Today’s Changing Economy and The Edge Becomes the Center: The Oral History of Gentrification in the Twenty-First Century, from which this excerpt was adapted. Copyright © 2015 by DW Gibson. Published in 2015 by The Overlook Press, Peter Mayer Publishers Inc. www.overlookpress.com. All rights reserved.