You are here: Home/Uncategorized/ The BroadsheetDAILY ~ July 20 ~ ‘I Can’t Rule Out Sleeping in the Streets If I’m Forced Out of Here’ Group of Elderly Battery Park City Residents Face Loss of Their Homes as Affordability Protections Sunset
The BroadsheetDAILY ~ July 20 ~ ‘I Can’t Rule Out Sleeping in the Streets If I’m Forced Out of Here’ Group of Elderly Battery Park City Residents Face Loss of Their Homes as Affordability Protections Sunset
‘I Can’t Rule Out Sleeping in the Streets If I’m Forced Out of Here’
Group of Elderly Battery Park City Residents Face Loss of Their Homes as Affordability Protections Sunset
The residential building at 225 Rector, where 17 elderly residents are facing the threat of eviction.
More than dozen elderly residents of Battery Park City are facing displacement — and in some cases, the possibility of being made homeless — as longstanding affordability protections lapse on their apartments, triggering rent hikes of thousands of dollars per month.
These tenants (a racially diverse group, two of whom are disabled, and several more of whom suffer from September 11-related illnesses) reside at 225 Rector Place, in a cluster of 15 apartments, which are all that remain of more than 60 units once set aside as low- and middle-income dwellings, when the building (originally known as Parc Place) opened as a 305-unit rental tower in 1986. The original developer, the Related Companies, accepted substantial government subsidies in exchange for participation in the so-called “80/20” program, which called for one-fifth of the apartments in a building to be reserved for people of limited means, while four-fifths were allowed to be rented at unrestricted, market rates.
Those provisions were originally slated to sunset in 2005. But in 2002, Related (in the midst of the real estate and economic downturn that followed the terrorist attacks of September 11, 2001) agreed to extend affordability protections for these tenants through 2019, in exchange for additional public subsidies. (Related had reason to be thankful for the tenants of its affordable units, who not only provided the rationale for government financial support to the landlord, but were also the only tenants who consented to return to the building once the community reopened.)
But the 80/20 renters suffered a series of setbacks, starting in 2005, when Related sold the property to another developer, Yair Levy, who announced plans for a gut-renovation and conversion of the erstwhile rental building into condominiums. Within two years, Mr. Levy was able to force out all of the market-rate tenants by simply declining to renew their leases. But the rent-protected tenants insisted that the 2002 extension of the 80/20 agreement meant they were legally entitled to remain until 2019.
A combination of uncertainty, abysmal living conditions as the building was turned into a construction site, and Mr. Levy’s use of lawyers to harass these residents (by falsely claiming that the 80/20 extension to 2019 had been nullified) resulted in more than half of the group eventually leaving. During this same period, the economic recession of 2007 hit the New York real estate market, and Mr. Levy effectively abandoned the building, leaving both affordable rental tenants and the handful of condo buyers to whom he had sold apartments without lights in the hallways, or heat or hot water in their homes. An investigation by the State Attorney General’s office determined that Mr. Levy had fraudulently drained the condo’s reserve fund of more than $7 million (which he used to pay personal expenses), while also defaulting on his $160-million mortgage and failing to remit payments in lieu of taxes (PILOT fees) to the Battery Park City Authority (BPCA). During this chaos, a collaborative effort by then-State Attorney General (now Governor) Andrew Cuomo, then-Manhattan Borough President (now City Comptroller) Scott Stringer, and the Authority compelled Mr. Levy to acknowledge, belatedly, that the remaining affordable tenants (by this time, reduced to fewer than 20 households) were entitled to remain in their homes through 2019.
After mortgage lenders seized the building from Mr. Levy in foreclosure, it was repurchased in 2011 by Related (for tens of millions of dollars less than they had sold it in 2005), and the sale of condominium units moved forward. The remaining affordable units were purchased as a block by a real estate investment partnership, Ven One Rector, in December, 2013.
Matters remained largely stable until the approach of the first renewal dates for this group of leases, after the scheduled expiration of affordability protections, last November. The affordable tenants were notified that their rents would more than triple, jumping from as little as $1,200 (for a studio) to as much as $3,800 (for a studio), $4,400 (for a one-bedroom unit), and $7,800 for a two-bedroom apartment.
In contrast with Mr. Levy, Ven One Rector, managed by partner Sunil Kukreja, had honored the affordable housing agreement through its planned expiration. “We have operated these units at a loss since we bought them,” Mr. Kukreja says. “This year, our negative cash flow was roughly $150,000. That was part of our business plan. But with the expiration of the affordability contract, we are now entitled to a reasonable return on our investment.”
Since the affordability provisions expired in November, Ven One Rector has accommodated the residents of the apartments it owns by extending their occupancy three times — first until the end of April, then June, and now through July 31. “Nobody has been threatened with eviction,” Mr. Kukreja says. “Each tenant has been offered a new lease at market rates. A few expressed interest in staying on at the higher rent, but none of them have thus far signed a lease. But anybody who chooses not to pay the legally permitted rent will be asked to vacate their apartment.”
By the spring of this year, it was not possible for the majority of the tenants to find new homes, or make arrangements to move (even if they had someplace to go), as a result of the pandemic coronavirus.
The remaining 80/20 tenants have formed a tenant’s organization, the Rector Square Affordable Housing Group. One of the leaders, Ann Stenson, says, “the landlord now expects all of us to move out by August 1. But more than a half of our group are seniors, many of these have underlying health issues — some related to September 11 — and quite a few of these have lost their income, because of the economic slowdown. Most of these residents have been here since the building opened, 34 years ago.”
Mr. Kukreja responds that, “it is true that some of these tenants are elderly, but there are also some who are senior executives for large banks and universities. In one case, we found out that a tenant was trying to make money by illegally subletting her apartment on AirBNB. When we took her to court, I said I would show her compassion, because she was my grandmother’s age. But I also insisted that she had to follow the law.”
“Several of our group had moving plans before the pandemic hit,” Ms. Stenson continues, “but these are no longer viable. So a large number of these people have no other homes to go to, but can’t afford to pay triple their original rent. And not one of us can stay once these units go to market rate.”
One of these residents is Carolyn Wilson, who says, “I’m a public school teacher who was forced into retirement by cancer, and I’m suffering from four conditions that are certified to be related to September 11. I have lived here for 34 years. Where am I supposed to go now?”
Daniel Stein, who has lived at 225 Rector for decades, says, “I am 76 years old and living on a fixed income, with multiple serious illnesses — including cancers and a kidney transplant. I have never considered being homeless, but I have no other options and I can’t rule out that I will be sleeping in the streets if I’m forced out of here. This is traumatizing.”
Another resident, who asked to be identified only as “Debra,” says, “I’ve lived here 23 years, and raised two kids in this community. I’ve been looking for an apartment for the past 12 months, but there is really no affordable housing program that I’m eligible for. I’ve been reduced to part-time work as a result of downsizing, and I don’t know what I’m going to do. As we get closer to July 31, my anxiety is increasing. This worries me, and I’m scared. When I close the door and lay down at night, I lie awake with fear of homelessness.”
Mr. Kukreja replies that, “the frustration of these tenants is understandable. But their anger should be directed at the City and State, for the failures of the 421a program,” the housing subsidy scheme under which the 80/20 program falls, “and their failure to address the affordable housing crisis in general.” He adds that Ven One Rector, “has never received any public subsidy, from 421a or any other source.”
Debra adds, “the lockdown from the coronavirus reminds me of the days after September 11, when my kids couldn’t go outside. People like us built this community, and then we rebuilt it after September 11.”
A tenant who asked to be identified only as Luis, reflects that, “I’m angry that people who came here when nobody else would and stayed when everybody was leaving are now being told to get out, because this has become a neighborhood for rich people. This community is being whitewashed.”
Elda Luisi, an actress in her 70s, says, “I have applied more than 60 times to various affordable housing programs. It never occurred to me how elders are treated when they are seeking housing. This feels kinda desperate.”
Mr. Kukreja also confirms that one of this group of residents (who name is being withheld for reasons of privacy), “has found a place and given notice that she is leaving on August 5, and we have confirmed her extension for those few days at previous rate.”
City Council member Margaret Chin: “The upheaval that tenants at 225 Rector are going through reflects the overall callousness shown towards vulnerable communities facing housing instability in the middle of a pandemic.”
City Council member Margaret Chin, who has been working on behalf of the Rector Square Affordable Housing Group, says, “the upheaval that tenants at 225 Rector are going through reflects the overall callousness shown towards vulnerable communities facing housing instability in the middle of a pandemic. It’s also a reminder of the failings of the 421a program. Without taking a hard look at how to improve it, it will continue to function as a low-risk giveaway for landlords, while simply creating the illusion of long-term protections for tenants.”
She continues, “my office has been working around the clock to help tenants organize. After we reached out to BPCA for documentation to better understand the history of this building and were told there was no paperwork on file, we teamed up with advocates at Mobilization for Justice and Cooper Square Committee to identify next steps and alternative tools to fight to extend the lease at affordable rents.”
“This issue isn’t just about affordability,” Ms. Chin adds. “In the face of an unprecedented public health crisis, it’s a matter of life and death. Many of the tenants are seniors. Allowing these residents to remain in their homes means saving their lives.”
On June 15, Ms. Chin sent Mr. Kukreja a letter saying, in part, “I urge you to consider granting a lease extension to July 31st, 2021 and a rent increase as suggested by the Rent Guidelines Board,” which governs increases on rent-stabilized apartments. Mr. Kukreja responded that his company, “has a bulk-contract lease agreement, with a tenant for all apartments, which states we are to deliver the units [by] August 30, 2020 at the same market rates that were offered to the existing tenants.”
Ms. Stenson questions the market-rate rents that the landlord is seeking. “Elsewhere in this building,” she says, “one bedrooms are going for $3600 to $3800 for renovated apartments, in brand-new condition. This landlord is asking for $3,800 for a studio, $4,400 for a one-bedroom, and $7,800 for two-bedrooms. These are for un-renovated apartments, with fixtures from the 1980s.”
This insight is echoed by Gigi Li, Ms. Chin’s chief of staff, who observes that, “the landlord sent letters back in November asking for ‘market rates’ about that were way above market when sent, and are even more above market now.”
Mr. Kukreja counters that, “timing is everything in business. I now have a tenant willing to take all of these apartments at the rents that I offered to the existing tenants. I have tried to explain this to the elected officials and the housing advocates, but they have not responded to me. And the tenants, who were originally interested in discussing a compromise, don’t want to talk since they organized into a group.”
Brandon Kielbasa, director of organizing and policy at the Cooper Square Committee (a non-profit that advocates for the preservation and development of affordable, environmentally healthy housing), says, “the uprooting these tenants face is similar to what so many other tenants are facing right now. In other ways, the tenants of 225 Rector Place are unique in their need to have stable housing during this pandemic, in that the majority of them are seniors or have health problems. No tenant should be dealing with eviction or displacement during this crisis, especially not those at high risk for severe complications due to COVID-19.”
Ms. Chin’s office has partnered with the Cooper Square Committee and the Mobilization for Justice (a non-profit that provides legal services in to low-income clients in civil litigation) to seek a legal remedy that will allow the 80/20 tenants at 225 Rector to remain in their homes for at least an additional year, and perhaps longer.
Ms. Stenson notes that, “Margaret Chin and her staff, and the help we’re getting from Cooper Square and the Mobilization for Justice, give us hope. But the real problem here is the structure of 421a program, which makes no provision for people who will be made homeless. In the meantime, the one-year extension were are seeking will give everybody time to work on a long-term political solution.”
Quasi-Rent Stabilization Ends at Gateway Plaza
Affordability Protections Replaced by Ten-Year Cap on Rent Increases
The Battery Park City Authority (BPCA) announced on Wednesday an agreement with the LeFrak Organization (operator of Gateway Plaza, the community’s largest residential complex) that will roll back affordability guarantees for the dwindling cohort of tenants who have been protected for decades by caps on rent increases.
According to a statement by the Gateway Plaza Tenants Association (GPTA), the deal will limit rent hikes to 2.5 percent per year (for one-year lease renewals) and 3.78 percent (for two-year renewals) through 2030 for the roughly 600 households that were previously covered by a program known as “quasi-rent stabilization” (QRS). That plan mandated that rents for Gateway residents who were protected could not be raised by more than the increase allowed for rent-stabilized apartments elsewhere in the five boroughs by the City’s Rent Guidelines Board (RGB).
This arrangement is likely to disappoint Gateway residents and affordable housing advocates for several reasons. Chief among them is that if the QRS agreement had been extended, covered residents of Gateway Plaza would likely be facing significantly smaller rent hikes.
Federal Loan Program Bails Out Local Small (and Not-So-Small) Businesses
(Editor’s Note: This is the first in an occasional series of stories detailing the impact of federal bailout funds on Lower Manhattan businesses.)
The federal Paycheck Protection Program (PPP) has disbursed more than $600 billion in roughly 4.9 million loans to business around the nation, in response to the economic slowdown triggered by the pandemic coronavirus. In Battery Park City’s three zip codes, 285 businesses and non-profit organizations received loans totaling more than $10 million, based on the possibility of saving more than 2,900 jobs, according to data recently released by the federal government’s Small Business Administration (SBA).
Astrophotographer Mihail Minkov’s Star Catcher placed first in the International Dark Sky Association’s “Connecting to the Dark” category of IDA’s first annual photography competition, “Capture the Dark”. Minkov accompanied the photograph with this statement: “I have a four-year-old daughter. She is fascinated by the planets, stars and the Milky Way. So I decided to make her part of the process and try to show her what it’s like to be out under the dark sky, and see the beauty of the night sky. I hope that one day she will remember that and this memory will make her care for the planet and the night sky.”
Finalists Announced in Design Competition to Improve Pedestrian Access to Brooklyn Bridge
On some weekends, as many as 15,000 pedestrians and 3,600 cyclists compete with each other and souvenir vendors for as little as 10 feet of width on the deck of the Brooklyn Bridge, creating an unpleasant and potentially unsafe bottleneck.
The City Council and the Van Alen Institute (a New York nonprofit architectural organization, dedicated to improving design in the public realm) have named the shortlist of contenders in a contest that aims incubate fresh ideas for better pedestrian access to the Brooklyn Bridge.
Local Traffic Monitoring Device is Part of City-Wide Expansion
A work crew installs a new traffic monitoring device at the corner of West and West Thames Streets.
Lower Manhattan residents may soon be slightly safer, if lighter in the pocket, thanks to a new traffic monitoring device that has been installed at the corner of West Street and West Thames Street. The camera and radar unit, mounted on a silver pole, combines red light monitoring with speed enforcement for vehicles proceeding south along Route 9A (West Street).
Open Space Advocate Wants City Hall Park Returned to Community
A local advocate for Lower Manhattan open spaces is sounding the alarm about City Hall Park, which has recently been closed and cordoned off by police, while the park’s paved plaza (near Chambers and Centre Streets) has been taken over by Occupy City Hall protestors.
Lower Manhattan resident Skip Blumberg, the founder and president of Friends of City Hall Park (FCHP), says, “our park is closed, commandeered by the NYPD inside the fences and by the occupying protestors on the Northeast Plaza. The park has suffered littering and destruction by irresponsible individuals within those groups, with trash thrown over the fence by both.”
Fine artist and long time Downtown resident Adele H. Rahte has spent the stay-at-home period designing and creating these fabric collages representing the people in our community as a special form of thank you to the essential workers of our community and city for keeping us safe.
On display during the month of July at the Tribeca Community Window Gallery located at 160 West Broadway.