After suffering a near-death experience under the Giuliani administration, tenant ownership is once again a reality for buildings the city is unloading into private hands.

In a development affordable housing advocates have long been agitating for, last week the city Department of Housing Preservation and Development pledged at least one-quarter of the 2,000 apartments moving to private ownership this year in the agency’s Third Party Transfer program will be awarded to nonprofits planning low-income tenant cooperatives.

It’s a dramatic turnaround from the previous round of transfers two years ago, when the city faced heavy criticism, and a lawsuit, for awarding most of the 46 buildings to private landlords. “HPD seems genuine about involving tenants and giving them a stake in their homes,” said Carol Lamberg, executive director of Settlement Housing Fund, which along with the Urban Homesteading Assistance Board received eight buildings, with more than 350 apartments, in northern Manhattan. Several other nonprofits with tenant ownership proposals also received some of the 90 buildings awarded in Manhattan, the Bronx and Brooklyn. The selections await final approval from City Council.

The Council created Third Party Transfer in 1996 to take buildings burdened with high tax debts and repair bills off the auction block, and instead give them to private landlords or nonprofit organizations with neighborhood experience and clean records. With the transfer, the city forgives all debts, grants the new owners tax breaks and provides low-interest loans for rehabilitation.

Some housing advocates see this week’s move by HPD as a signal that the city plans to shift tenant ownership initiatives from the Tenant Interim Lease program to Third Party Transfer. TIL thrived when the city owned thousands of buildings repossessed from delinquent landlords, but the program has floundered as the city developed or sold off virtually all of its buildings that were suitable for conversion to TIL tenant coops.

The lawsuit didn’t hurt, either. The city was hauled into court by South Brooklyn Legal Services and the Legal Aid Society, which sued the city for prohibiting tenant associations from applying for Third Party Transfer buildings. Under current HPD policy, tenant groups must have sponsorship from a nonprofit organization to seek building ownership.

The announcement could bode well for those who think tenant ownership should be part of New York’s affordable housing future. In his preliminary budget proposal, Mayor Giuliani allotted $233 million to move more than 5,900 apartments to Third Party Transfer. But at least one major hurdle remains: The mayor has insisted that the City Council commit to major reforms at the Department of Buildings and elsewhere before much of this money is spent.