As a resident of lower Manhattan who just renewed my lease this morning, I can attest to the fact that rent-stabilization, despite hundreds of millions of tax breaks granted to the district, is blatantly disregarded by landlords. The reason turnover is so high is that no one knows that their building is taking tax abatements in exchange for rent regulation.
You may be familiar with the various lawsuits that have been brought to defend residents and the hostility that mentioning this topic will engender with your building’s management. Some go so far as to immediately take legal action against tenants who raise the subject.
The state has failed to enforce the law, instead of playing a game of finger pointing. The city says it’s not their job; the state lists offices that require individuals to chase down people who will tell you that you are on your own and will not protect you from the fallout of making your claim public. The buildings gladly accept the tax benefits and then deny that the laws apply to them.
My rent has increased by $5,700 per year in just the past four years. I have lived in a rent-stabilized building that took in over $10 million in state benefits while denying that the regulations applied. In eight years my first apartment in this building, I moved to a larger unit a few years ago, has increased by over $10,000 per year.
No one has done anything to help residents, and it doesn’t look like anyone will. The state is forcing private individuals to enforce the law with private lawsuits that will take years and hundreds of thousands of dollars to litigate. It’s a fool’s errand.
In the case of my building the total benefits so far are nearly $90 million in tax payer subsidies but not a single unit is adhering to the rent-stabilization regulation. Go to the leasing offices and ask.
“The 421-g Tax Incentive program was a real estate tax exemption and abatement for conversion of commercial buildings, or portions of buildings, into multiple dwellings in most of the areas of Manhattan south of Murray Street, City Hall, and the Brooklyn Bridge. Benefits of the program included a construction period exemption of one year, a 12-year exemption from the increase in real estate taxes resulting from the work, and 14-year abatement of about 80 percent of the real estate taxes paid on the property before conversion. All rental units become subject to Rent Stabilization for the duration of the benefits.”
I know that various publications including Pro-Publica have documented this situation, but no elected official is willing to help people who don’t live in NYCHA housing. I own my business, and I have to drum up another $10,000 in business to pay my rent while my building pockets a cool couple of tens of millions in tax abatements.
I wish there were a way to make them pay back all the tax benefits. It is ridiculous that the people of New York should have their pocket’s picked by this lot of miscreants.
To the editor:
Re: Flip This Affordable Unit (The BroadsheetDAILY, April 13, 2017)
After discussion with the author of the IBO survey noted in the BroadsheetDAILY, where Battery Park City and Lower Manhattan are found to have the highest stabilized rental turn-over rate, the reason appears to be the anti-tenant Pataki-Bruno preferential rent law of 2003.
This law allows owners of rent stabilized buildings, mainly 421a buildings, which are the main source of stabilization in our area, to offer tenants a preferential rent, lower than the stabilized rent. Then, upon lease renewal, it allows the building owner to raise the new rent to the previously allowable maximum registered rent plus the Rent Guidelines Board annual allowable increase (legal regulated rent).
For example, a tenant with a one year lease paying a preferential rate of $3,000/month for a 1-bedroom apartment with a legal stabilized rent of $4,000/month could, at the end of the year, face a rent increase of 33% ($1,000) in addition to the new year’s limited percent rent increase set by the Rent Guidelines Board. Such substantial increases clearly negate the benefit of the limited increases provided by the rent stabilization law.
As noted in your 2014 article: http://www.ebroadsheet.com/cb1-panel-endorses-strong-rent-protections/ Community Board 1 wrote a resolution to our elected officials concerning this, which unanimously passed the full Board “Mandating that preferential rent lease agreement use the lower preferential rent as the basis for future rent increase during the term of tenancy, rolling back the effect of the preferential rent law of 2003.” Unfortunately, our local representatives, which then included the Assembly Speaker, could not rescind this anti-tenant law.
If we wish to attract a community of long term residents, this 2003 anti-tenant Bruno-Pataki law rent, driving residents out of our community needs to be rescinded.
– Tom Goodkind