Tenants living in Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, have won the battle to keep their rents from potentially sharp increases after a judge this week ruled against landlords Wall Street private equity firm Blackstone.
The company is the largest commercial real estate owner in the world and has recently expanded into rental housing. Blackstone purchased the apartment complex for approximately $5.4 billion in 2015, which was lauded by local politicians for the promise that almost half of the 11,200 units could be afforded by middle-class families.
The litigation centered on whether the other units in the complex, which had about 6,000 people, would also have rental stability. Rents in such units can only increase at a certain rate each year, and tenants have the right to renew their contracts.
The new decision was the latest in the turbulent history of the complex, which consists of 110 flat red-brick buildings built on 80 acres as middle-class homes in the 1940s and have since become emblematic of many of New York City’s tallest buildings. profile housing disputes.
The role of investors and private equity firms in the housing sector, both in New York City and nationwide, comes under greater scrutiny by housing activists and politicians amid rising rents and declining affordability.
In the lawsuit, it was determined that the apartments in question would lose their rental stability in July 2020. But citing new tenant-friendly laws enacted by the state in 2019, a group of tenants and the Stuyvesant Town-Peter Cooper Village Tenants Association filed a lawsuit in it. March 2020 argues that their home should instead keep the rent flat.
Blackstone argued that the provisions of a 2013 settlement stemming from a previous lawsuit should allow it to repeal the flats rule from July 2020. He argued that state law did not replace this agreement. But Judge Robert R. Reed of the New York State Supreme Court in Manhattan sided with the tenants in a January 4 decision.
“Thousands of our neighbors may plan to stay in their rent-protected homes,” said Susan Steinberg, president of the tenants’ association, on Friday. He framed the conflict as a “David and Goliath” story.
“They’re such a big company,” he said of Blackstone. “Every time I saw the news, it was like another group was buying the house.”
According to Blackstone, the average rent in the apartments affected by the decision is about $4,200 per month and the average household income is about $247,000, which Ms. Steinberg did not dispute.
A Blackstone spokesperson did not say whether the firm plans to appeal, but said it has “invested more than $300 million in property” and has “significantly improved service levels” and limited 5,000 homes unaffected by the decision to lower levels. income tenant.
Our commitment to the residents of the neighborhood has not changed.”
Stuyvesant Town-Peter Cooper Village was built for veterans just after WWII and for decades was seen as a stronghold for the middle class. In 2006, it was purchased by Tishman Speyer Properties, owner of Rockefeller Center, and its partner BlackRock for $5.4 billion.
The new owners have moved in to evict hundreds of residents, renovate vacant apartments and raise rents. Tenants accused them of illegally removing the apartments from the lease, leading to the 2013 settlement.
When Blackstone bought the complex in partnership with Ivanhoé Cambridge, it agreed to protect the 5,000 units at rents middle-class families could afford. In response, Mayor Bill de Blasio’s administration exempted $77 million from mortgage registration taxes and provided Blackstone with a $144 million low-interest loan.
About 27,500 people live in the complex today.