Gentrification is the act of purchasing and renovating deteriorating properties in low-income or troubled neighborhoods to accommodate an influx of wealthier buyers, while pushing lower income residents out of the area. It is a controversial practice that has led to a number of regulations in New York City to prevent some neighborhoods from losing their character…and their longtime residents.
However, there may still be instances where the specter of making money may trump the desire to preserve neighborhoods. This is what ostensibly happened with a Manhattan building that previously housed a nursing home.
According to a New York Times report, the building had been protected for decades by a restrictive covenant that prevented it from being used for anything other than a non-profit residential health care facility. However, as the city began changing zoning codes in an effort to create more affordable housing, the building's owner paid the Department of Citywide Administrative Services $16.15 million to lift the covenant.
After the agency accepted the payment, the owner sold the building to Allure Group; a nursing home operator. That agency then sold the property to a condominium developer for $116 million. It would not be surprising if developer announced plans to create luxury homes in the building.
Since the “gentrified” sale was one transaction removed from the sale from one nursing home agency to another, and the restrictive covenant was lifted, it ostensibly was a matter of time before developers were going to profit. With this development, the city has put on hold all new deed changes until a review of internal procedures can be made.