They Were Promised an End to Homelessness. Now They Face Eviction.

Dwayne Seifforth spent years struggling with homelessness, including four sleeping on New York City streets and one living in a Bronx shelter with his young daughter. Then in spring 2020, a city caseworker presented Mr. Seifforth with a solution: a vacant apartment he could afford using a special city voucher.

The 11-story building on 133rd Street in Harlem, with its newly-finished rooms, balconies and Manhattan views, drew a stark contrast with the shelter, where Mr. Seifforth, 41, and his daughter, D’Kota-Holidae Seifforth, 9, said they encountered the biggest rats and cockroaches they had ever seen.

It was a chance for Mr. Seifforth, who had been living off food stamps and the wages he earned working part time for the Parks Department, to give D’Kota a real home.

The family moved in. Soon, most of the building’s 46 units were filled with families with similar stories. Children settled in to nearby schools. Mr. Seifforth, 41, got a full-time job delivering packages for Amazon.

What the families did not know was that the building was already mired in a conflict that would soon leave them on the brink of homelessness again. Mr. Seifforth now lives every day worrying about whether a marshal will throw him and his daughter out.

“Sometimes I think, ‘I should have just stayed in the shelter,’” he said.

The extraordinary saga of how a Harlem building beckoned a group of families desperate for a home, only to serve them another cruel twist, involves multiple lawsuits, accusations of fraud and a bankruptcy.

But it also represents how elusive stable, affordable housing can be in New York City, where the population in shelters rose to record levels this year. And it shows how the people living those struggles frequently have little control over how they are resolved.

“Housing should not be a privilege,” Mr. Seifforth said.

The property he moved into with his daughter at 308 West 133rd Street used to be the site of a Harlem church that had fallen into disrepair. But in 2017, the developer Levi Balkany submitted a plan to build a new condo building there. Two years later, a limited liability company controlled by Mr. Balkany took out a $26 million loan to finish the building’s construction.

Mr. Balkany quickly encountered difficulties with the loan he had taken from Arena Investors, an asset management firm that has also done business in the Caribbean and Spain. The firm said he defaulted on the loan at least three times in 2019, including for failing to pay interest, according to court records.

Mr. Balkany and his lawyers did not respond to requests for comment.

After the city issued a new, higher tax assessment on the building in 2019, a lawyer for Mr. Balkany claimed in court that the increased prices for the condos would be too high for the “target market.” He looked to a new, more stable source of revenue: renting the homes to those struggling with homelessness.

Under the plan, Mr. Balkany would rent to families who could not afford the apartments on their own but who were eligible for vouchers, which are rent supplements funded by the city and the state.

Voucher programs are crucial tools in curbing homelessness. Including coronavirus relief funds, the city spent roughly $350 million in the past fiscal year to help thousands of families find or keep stable homes through the programs.

In 2020, several of the Harlem apartments were added to the network of buildings that accept vouchers. Mr. Seifforth’s caseworker at the Bronx shelter asked if he would like to go see the “brand-new” apartment. After a tour, fearing the opportunity would disappear, Mr. Seifforth took it.

“It was convenient and it’s beautiful,” he said.

Tonia Vail, 50, had spent almost two years in a Brooklyn shelter with her two children, while she worked at a car dealership nearby. The Harlem apartment, she said, was the first housing opportunity that her caseworker had pointed her to that was affordable and available to rent.

“It’s not that we weren’t looking,” she said. “It was very hard, very hard. When she said she had this, I basically jumped on it. I didn’t hesitate.”

Soon after the families moved in, it became clear something was wrong.

In early 2020, Arena accused Mr. Balkany of trying to rent out the units in violation of the loan agreement, not properly registering the building with the city and not keeping proper insurance on the building, court records indicate. On June 5, 2020, as some families were still moving into the building, a limited liability company associated with Arena sued to block the leases.

“The tenants they have put in there without our consent are low-income tenants they’re putting in because” of perceived “guarantees from the city,” Casey Laffey, a lawyer representing the lender said in court in July 2020. “That ignores the very real risk of depriving this property of its value,” he said.

A judge in July agreed to temporarily block Mr. Balkany from renting apartments. Days later, Mr. Balkany declared bankruptcy.

In July 2021, after months of bankruptcy court proceedings, Arena bought the property at a public auction.

“Within a year, I started to hear about the building, that it got sold or something to that effect,” Mr. Seifforth said.

For a while, court records indicate the city and Arena were discussing whether there was a way to to keep the families there.

But in October 2021, a federal bankruptcy court rejected the existing leases at the property, saying it was in the best interests of Mr. Balkany’s creditors. This March, Arena sued more than 40 tenants still living in the building in state court, saying their leases were invalid and that they should be thrown out.

This fall, a judge agreed.

“We are not trying to be unreasonable,” Mr. Laffey said in court in September. “My client just wants this process to move. As you know, we have been dealing with this for two years as well.”

Tenants like Mr. Seifforth now wonder how the city could have even placed them in a troubled building to begin with.

Neha Sharma, a spokeswoman for the Department of Social Services, said the pre-existing problems at the building were not something that could have been “anticipated or prevented.”

In a July 2021 filing in federal bankruptcy court, a city lawyer said the social services department “reasonably relied” on Mr. Balkany’s assertions that he was allowed to legally rent out the properties and said that it was not “customary” for the department to “investigate property owners before leasing units.”

In response to further questions on what kind of vetting the department had conducted, it said that while it does check on landlords, having to conduct extensive financial analyses would be counterproductive to getting people housed.

In general, it said that its programs to house people — even as thousands of migrants arrived in New York City this year seeking help, which put more demands on several short-staffed city agencies — have been working. This year, the rate of people who had returned to shelters after being placed in subsidized homes, the Department explained, had declined.

This is not the case for many of the residents of 308 West 133rd Street, who have returned to shelters in the past month, including some who reportedly received payments from the new owners, said Don Curtis, founder and president of the Unified Black Caucus, a civil rights group that is helping organize the tenants.

“What happened to these people is through no fault of their own,” he said.

The few dozen or so that remain in the building now scramble daily to find new homes, as they wait to see when they may be forced to leave.

A spokesman for the new building owners said they have worked with tenants to find new housing by “offering financial assistance and working with case managers and qualified brokers.”

“This is certainly an unfortunate situation for all involved due to the previous owner’s actions,” the spokesman said.

He did not answer questions about how many tenants have found new homes, how many had received payments, whether the new owners will now try to sell the condos or when the marshals may proceed with the evictions.

Some tenants, like Georgette Hyman, 42, put up Christmas trees and decorations for the holiday season, even though they remained uncertain about how long they would be able to stay.

“My kids never went without, so I don’t want them to go without now,” she said.

Others, like Madeline Burdier, 43, who lives in the building with four children, have already begun packing up their belongings.

“The worst feeling in the world is not having a place for your kids to stay,” she said.

Mr. Seifforth said both he and his daughter know they have to leave soon. He said D’Kota asks him if they will have to return to the place with the cockroaches. He tells her no, though he does not know where they will end up.

“I just want to go somewhere that’s comfortable for her,” he said.