Earlier this week, the CITY published an investigation into a group of real estate speculators with a morally suspect business model: buying up fractional shares of deeds to family-owned homes and using the legal system to force a sale and turn a profit.
The men have targeted dozens of properties in neighborhoods like Bed-Stuy, Bushwick, and Brownsville; as one of them put it, Black-owned homes have more equity to exploit.
From the CITY:
Their ingenious business model is rooted in finding far-flung heirs, leveraging family animosities and pushing or sweet-talking longtime Brooklyn residents into deals that some now say they regret or feel they had no choice but to make.
While such real estate transactions have been scrutinized at times by courts and city officials, much of it is in fact legal through a little known but historically fraught legal tenet called "partition," which speculators have used to extract wealth from generations of Black and Latino families across the country.
The four men involved in the schemes defended their business activities to the outlet. "We help more people than the public would obviously realize," claimed one of the speculators, Earl Davis. In legal filings, Davis has noted that while the casual observer "may feel my type of transactions, is sinister, none are illegal." In a complaint filed in 2018, one woman accused Davis of engaging in a "predatory scheme" after he bought her ownership stake in a home in Bed-Stuy. (The case was eventually dismissed.)
If this is the rough-and-tumble world of New York City, it is presided over by Mayor Eric Adams, who during his 2021 campaign declared, "I am real estate." Adams has received hundreds of thousands of dollars in contributions from the industry—including thousands from Davis, one of the deed speculators the CITY wrote about.
In 2021, Davis donated a total of $2,000 to Adams—the maximum amount allowed. According to campaign finance records, Davis gave $1,500 to Adams in late April of 2021, and another $500 in September of that year, after Adams had won the primary and was cruising to victory. For his occupation, Davis listed the name of his firm, American Regional Capital.
We asked Adams's campaign if the mayor knows Davis personally, and if he condones the kind of real estate practices outlined in the story.
"As a New Yorker who lived in fear of foreclosure as a young man, Mayor Adams condemns predatory real estate practices and has his entire career, including fighting against such practices when he was a state senator and borough president," a spokesperson for Adams's campaign, Evan Thies, wrote to Hell Gate in an email. "Mayor Adams does not know the contributor personally and the campaign—which received contributions from more than 10,000 New Yorkers—will review the contribution."
Davis, the speculator, also gave $175 to the campaign of Bronx City Councilmember Marjorie Velázquez in January of 2021; his occupation for this donation is listed as "real estate investor."
"The Councilmember does not know Mr. Davis, she did not ask him for a contribution, and he is not on the campaign's email list," a spokesperson for Velázquez's campaign told Hell Gate. "The accusations laid out in The CITY article are unconscionable and the Councilmember absolutely condemns that unethical behavior."
Davis did not respond to Hell Gate's phone calls and messages.