BY LINCOLN ANDERSON | Creating affordable housing is the overriding concern right now, both at City Hall and in the Village, from the West Side to the East Side. But recovering rent-regulated housing is also a critical part of the equation, Erik Coler, president of the Village Independent Democrats, stressed.
Coler this week filled The Villager in on an initiative that he and V.I.D. are involved in that has already reportedly been yielding results. Basically, Coler has been working with a friend, Aaron Carr, of the nonprofit Housing Rights Initiative, to identify buildings in the Village area where landlords have allegedly illegally removed units from rent regulation.
So far, they have focused on 28 Bedford St., which has 29 apartments in question, as well as 61 Carmine St., where 13 tenants are taking action — a total of 42 units between the two buildings.
The first step is to target buildings by checking which ones’ rents are out of scale with prevailing area rents.
“We look at H.C.R. [New York State Homes & Community Renewal], look at rates, see if they’re abnormally high,” Coler said. Then comes outreach. “We knock on doors that are high probabilities,” he explained.
With rent data in hand, the next step is to show it to lawyers, who, in turn, will represent the tenants. Newman & Ferrara is representing the Bedford tenants and an individual attorney is separately repping the Carmine Streeters. Newman & Ferrara filed a class-action lawsuit on behalf of the tenants last month — meaning several tenants in the building are serving as plaintiffs for all the others. (Three other units in the building are apparently actually legally decontrolled.) In the case of the Carmine St. litigation, tenants in 13 units out of a total of 38 units in the building are all suing.
The first goal, as Coler continued, is to get H.C.R. to put the apartments back under rent regulation. Beyond that, a lawsuit can result in treble — as in triple — damages for tenants who have been illegally overcharged. Coler said his understanding is that some or all of the tenants in the two buildings may have already received notice that their units are being “re-stabilized.” The Villager could not immediately confirm that by press time, however.
A key component of the lawsuits is use of the J-51 tax abatement to fund repairs (which is legal) but then fraudulent misuse of that as a basis to illegally push rents up past the deregulation cap.
Last month, The Real Deal reported that the lawsuit against Rudd Reality Management and Creative Industries Corporation, the ownership entity at 28 Bedford, is based on fraudulent use of J-51. To receive a J-51 abatement — which provides landlords extra income to fix up run-down residential and commercial properties — the buildings’ residential units must remain in the rent-stabilization program. According to The Real Deal, only three of the buildings’ 32 apartments are reported as rent-stabilized in property tax records. Records attached to the lawsuit show that the plaintiffs’ apartments were not registered as rent-stabilized with H.C.R.
In May, The Real Deal reported the filing of the lawsuit against the owner of 59-61 Carmine St., Carmine Properties. Again, the plaintiffs in that case charge that the landlord has benefited from J-51 tax breaks, yet has failed to keep their rent increases moderate, in line with rent regulation.
In addition, V.I.D. and H.R.I. have identified two more Village buildings where apartments allegedly have been illegally deregulated. They are planning a “Day of Action” on Sun., July 29, outside one of them — which happens to have a very prominent, long-running commercial venue on its ground floor. Coler wants to keep the two addresses under wraps for now, though.
And there may well be more buildings after those.
“I’ve already identified 350 apartments in the neighborhood that I believe have been illegally destabilized,” Coler said.
That’s almost approaching the number of affordable apartments planned in the massive development project at the St. John’s Building, at W. Houston and West Sts. across from Pier 40, which will have 476 affordable units among its total of around 1,586 units.
“We’re re-creating the St. John’s Building [project] out of thin air,” Coler said.
