NYC Forces Affordable Co-op to House Squatter Who Looted It

5 September 2025

On the surface, 789 MacDonough Street is a glowing example of tenants becoming owners of their neglected building.

The 41-unit, Bedford-Stuyvesant apartment house, built in 1930, began falling apart in the 1970s as the landlord essentially abandoned what was once a “beautiful, gorgeous building,” as longtime resident Lisa Lanier described it.

The building was aging, its regulated rents were about $200 a month, and Bed-Stuy had become something of a war zone. “Do-or-die Bed-Stuy,” locals called it.

“It was like living at the OK Corral. At any given moment, shots would ring out from the corners, and people would scream and scatter,” Lanier recalled in an article about Habitat for Humanity’s recent repainting of the building.

The city foreclosed on the six-story building in 1982 for unpaid taxes and sold it to the tenants in 1989 for $10,250 — exactly $250 per unit, about the same as their monthly rent.

“Had it not been for this program, I would not have been able to purchase my own home,” one of the original buyers, Emma Oliver, told Habitat magazine in a 2008 story about HDFC low-income co-ops. “And this is a home, a place where most everyone knows everyone else. Most of my neighbors have lived here 30, 40 years. The HDFC gave us a chance to live in an affordable place that’s comfortable.”

But co-op ownership, which is often touted as a solution for neglected rentals, has not been easy for the shareholders of 789 MacDonough.

“Those were a rocky first couple of years, from ’89 to ’91, as we navigated the learning curve to successfully manage a 41-unit building,” another resident, Corinne Douglas, said in the article. “It was a struggle to keep this building operating and in the black, and now, 30 years later, we still own it.”

Its financial struggles continue, however, in part because of Oliver, the board president from 1998 to 2016. Her reign ended when she was caught embezzling and convicted of grand larceny. In 2018, she was ordered to pay restitution of $122,680, but never did. The next year, she stopped paying maintenance fees for her unit, 1C, and has run up tens of thousands of dollars in arrears.

When the co-op board asks other shareholders to catch up on their maintenance, they inevitably mention that Oliver hasn’t paid, said John Thomas, who became board president last year.

“The woman just continued to not only be here, but not pay a single cent after the theft, and just go about her business like it was nothing,” said Thomas. “We wound up being almost in default. It drained most of the accounts.”

Biting the hand that fed her

Oliver, now 91 years old, extolled the virtues of her affordable building in Habitat’s 2008 story.

“We have income limits we have to abide by,” said Oliver, who was described as a retired nurse on disability. “We also set a limit on what shareholders can sell for” — $3,000 per room to an inside buyer, $6,000 to outsiders.

Prices are higher now, but still cheap: Unit 4G, a one-bedroom, was listed last year for $185,000, with maintenance of $580 per month.

As president, Oliver controlled the board’s finances with no oversight, Thomas said, and her looting reached six figures before it was discovered. In the Habitat story, real estate lawyer Larry McGaughey had warned that the city has no enforcement mechanism for HDFCs. “Each individual co-op is on its own,” he said.

But the city did have leverage to keep 789 MacDonough affordable for future buyers. The board in 2003 signed a 30-year regulatory agreement with the city that limits shareholders’ profit potential in exchange for suspension of its pre-2001 tax arrears. Among the restrictions: buyers cannot earn more than 120 percent of the area median income.

The co-op, which needed the deal to get a loan for repairs and operating expenses, also consented to financial transparency measures, such as getting city approval for every withdrawal from its reserve fund. But the embezzlement scandal happened despite the agreement, which, ironically, was signed by Emma Oliver. Now the board is fighting the city as it tries to get her out.

Citing Oliver’s unpaid maintenance, the board foreclosed on her shares and went to housing court to evict her. The case dragged on until September 2024, when it was awarded possession of Unit 1C and a judgment of $46,169 plus interest.

That same day, a city marshal applied for a warrant of eviction. Nearly five months passed before it was granted.

The process had taken years, but the co-op was about to put the embarrassing, painful episode behind it. Then, at the 11th hour, an unlikely party intervened: the city of New York.

Rather than helping 789 MacDonough Street through its crisis, as it did in the 1980s, the city went all-out to keep Oliver in the apartment she no longer owns.

The board is now suing the city and Oliver, alleging that shareholders of 789 MacDonough “are being forced to house their abuser, Ms. Oliver, at their own costs.”

“[We] are not a homeless shelter,” the board argued in its complaint. “The government cannot force a private cooperative — itself composed of elderly, low-income shareholders — to solve a housing problem by forfeiting its own property rights.”

For much of this year, the Adams administration has done exactly that.

An elusive eviction

The Department of Social Services, which has been trying to find housing for Oliver, persuaded a judge this spring to appoint a guardian and issue a temporary restraining order prohibiting her eviction. A housing court judge twice postponed her removal, but on May 15 declined to do so again. The marshal scheduled her eviction for the next day.

What happened next, according to the lawsuit, was extraordinary: The Department of Investigation ordered the marshal to stand down. Without court approval, the agency granted a stay of eviction to Adult Protective Services, a DSS program that landlord attorneys say is increasingly being used to stall evictions.

Oliver’s ouster was rescheduled for May 21, then for May 29 and again for June 3 as the Department of Investigation kept extending the eviction — a power typically reserved for judges. DSS, meanwhile, went back to court, seeking another restraining order, which Supreme Court Justice Maria Aragona granted. Outraged, the co-op board named the judge in its lawsuit.

The city’s Law Department and DSS did not respond to requests for comment. Text messages and a call to a number listed for Oliver were not returned.

The city has argued that Oliver should not have to post a bond in the case because she cannot afford it, despite her withholding maintenance fees and receiving a monthly pension and Social Security payments totaling $3,989, according to the lawsuit.

As for the $122,000 that Oliver pilfered, Thomas, the board president, believes she distributed much of it to relatives. Interest on her restitution to the building’s insurance provider — which covered $100,000 of the co-op’s loss — and to the co-op is accruing at 9 percent and has swelled her arrears to nearly $200,000.

The board did receive 12 months’ worth of Oliver’s arrears from the state’s pandemic-era Emergency Rental Assistance Program before ERAP ran out of money and shut down. But the remaining arrears, restitution and interest owed to the board add up to about $90,000.

“This is an unfair situation to us, and it’s costing us a lot of money,” Thomas said. “We can’t sell the apartment, we can’t do anything.”