Diaz and other residents of the 11 buildings said that UHAB has said that it can no longer afford to pay the mortgages and taxes on these properties, and that the building residents must pay these costs themselves. Residents fear that the debt will drive up the price of an apartment when the buildings become co-ops. Residents said that UHAB initially estimated to keep the co-op share costs low, around $450 a month but that recent estimates spike above $1,700 -- a bargain in the Lower East Side, but too expensive for Diaz, who has been living in her apartment for 22 years.

Reicher estimated monthly rates as closer to $600, but explained that residents with multiple units would pay more.

One squat, Rainbow Coop at 274 E. 7th St., has taken UHAB to court over alleged mismanagement of funds, and several others are weighing the benefits of litigation. (Click to download a PDF of Rainbow Coop's complaint.)

Reicher called the suit "sort of silly," and said, "the building is ready to go to co-op conversion, and we can't do anything until we take care of this."

Serenity, a former squat on Ninth Street, requires major renovations – its roof is leaky and the building does not have a heater and lacks vents and pipes to spread heat throughout the building.

Serenity residents say that UHAB has asked them to relocate temporarily, but many fear that once they’ve been displaced, they’ll never be allowed to return. They point to the burnt-out Sixth Street squat for evidence – former Sixth Street residents are scattered across the city, and the only major work that’s been done in the building is O’Connor’s two-year-long one-woman crusade to haul out rubbish. (Click to see a video.)