By Chris Lombardi
The woman, a longtime tenant at One Bank Street, stood to ask her question at St. John’s Church. An actor, her professional training was evident in her careful tone.
“If the landlord is shirking his obligations under the tax code, does this not fall to city lawyers to prosecute? If my handbag is stolen, is it not the D.A.’s job to catch the thief?”
State Senator Tom Duane sighed.
“If the thief claimed he had just found it, the D.A. might not take your case!” he said. “These people have a lot of power!”
The Bank St. tenants had come to the church for the much-anticipated Nov. 12 meeting, at which they asked Duane and other members of the Illegal Hotels Working Group for help, because their building is being used for “corporate housing.” Duane, their state senator and a member of the Illegal Hotels Working Group, was there to urge them to get organized and join the battle against “creepy landlords.” By the time it was over, the tenants were somewhat in shock: The elected officials present told them that just because their landlord was breaking the law, it didn’t mean that the government would make it go away, and that because of the unclearness of the law — which never quite defines the term “hotel” — they now faced both a legal and a political fight.
While more than 700 tenants call One Bank St. home, others around the world know it only as “Bank Street Suites,” whose amenities include “kitchenettes,” early check-in/checkout and “maid service.” The “suites” are listed with Signature Properties, one of numerous corporate-housing companies that have emerged in recent years; Signature’s other properties include 443 W. 34th St. and the notorious 160 Bleecker St. Most of these companies assert that their rentals are for a minimum 30-day stay, using a legal loophole based on some very old Housing Court precedent. While city and state officials work to close the loophole, companies continue to bloom, claiming that their clients are “residents” like any other.
The Bank St. tenants first approached Duane, City Council Speaker Christine Quinn and Housing Conservation Coordinators in October, after some market-rate tenants — who are far less protected from eviction than those in rent-stabilized apartments — learned that their leases would not be renewed. Some said that their building was slated to become “corporate housing.” By doing so, the tenants added One Bank to the growing list of buildings where tenants had noticed signs of transient rentals. Duane’s and Quinn’s aides told the market-rate tenants that they would look into what was going on at One Bank St., and let them know if there was a way for them to stay put in the meantime. On Monday night, these officials, along with Shari Hyman, director of the Mayor’s Office of Special Enforcement, gave the tenants plenty to chew on.
A few days before the meeting, Duane aide Colin Casey and Jose Conde of Quinn’s office, turned up what they thought was good news: something that could protect the Bank St. tenants from eviction, at least for a while.
They learned that Marolda Properties had accepted tax breaks to repair the building under the J-51 program, administered by the Department of Housing Preservation and Development, which mandates that “All rental units become subject to rent stabilization or rent control for the duration of the [J-51] benefits.” And One Bank St. owner Lucky Bhalla and his managing agent Marolda Properties had repeatedly taken advantage of that tax break, Casey told the Nov. 12 gathering.
“The landlord has three years left of tax abatement on the building,” said Casey. “Which means that right now, as far as we know, you have the right to renew your lease. So we sent a letter to the landlord, reminding him.”
The letter, signed by Duane, Quinn, Assemblymember Deborah Glick, Representative Jerrold Nadler and Manhattan Borough President Scott Stringer, stated that “According to 11-243 of the Administrative Code, all apartments in any rental building” are protected, and that therefore, “We are extremely concerned that tenants have been given incorrect information regarding their right to renewal of lease.”
However, Casey admitted, it was not likely to be so simple: “It’s very possible that the landlord will fight back, and say we’re interpreting it all wrong.”
As the tenants were mulling over the possible victory, moderator John Raskin, of Housing Conservation Coordinators, gave a quick overview of the citywide picture on illegal hotels, from single-room-occupancy residences being blatantly rented to tourists to the newer epidemic of “corporate housing.” He told them that because of the confusion in current city and state laws, “you guys are in that group where the laws are muddy, and they can claim they’re renting for 30 days and get away with it.”
Hyman, from the Office of Special Enforcement, added: “There isn’t even a precise definition of what constitutes a hotel!”
Duane told the tenants it would likely be in their interest to retain their own counsel, and fight the owners in court. But numerous tenants demanded to know why they should have to pay out of their own pockets to force the landlord to follow the law.
Duane sighed, explaining that New York City’s tax code and the state rent laws are civil, not criminal, matters.
“This isn’t about arresting anyone. And landlords — the law has been biased in their favor for so long,” he noted. Then he took off his suit jacket, and went into teacher-activist mode. “Your landlord is a creep! Now let me tell you why people like him have so much power,” he said.
Duane explained that the 1997 weakening of rent regulation had created a class of tenants, unprotected by rent stabilization, “afraid to challenge landlords, for fear of losing their leases.” He urged them to fight Marolda, the managing agent, as a group, in a well-organized tenants association. “You can win, I promise, but only if you all get together. With my help — I am here to fight crummy, hideous landlords; it is why I am in office — but I can’t do it without you.”
H.C.C.’s Raskin then urged that the tenants become involved in the citywide struggle to change the laws, fighting to close the loopholes that allow illegal hotels to thrive, pointing out that “even if you win the J-51 battle, that only gets you three years.”
Their chief enemy, Raskin said, was the much-abused “30-day” rule under which companies like Signature operate. A rule that was half-created by the Corporate Housing Providers Associaion, it says that 30 days’ residence in a unit constitutes permanent residence in New York City whether or not one signs a lease. The rule, based on old precedents from the Department of Buildings, was never meant to apply to such commercial ventures like transient hotels.
“They’ve built an entire industry on this loophole, and they’ll keep doing it until it’s closed,” said Raskin.
And legislation long pending in the City Council and in Albany to crack down on the practice, said Raskin, has been slow to emerge. Why so slow?
“Because the C.H.P.A. is fighting back,” Raskin said. “They’ve hired a big-name lobbyist to fight for them. She’s meeting with legislators, and bringing industry folks with her, pleading their case. If you really care about changing the laws, you have to pressure them, too, over and over.”
Hyman, from the Mayor’s Office, emphasized that she needed tenants to work with her office before she could take action on any such abuses.
“I have two building inspectors, two health inspectors, four police officers and two fire inspectors,” she said. “But you have to call my attention to what’s going on.”
Tenants immediately began to brainstorm about current causes for action: that Marolda had never given most of them any of the interest statements on their security deposits as required by law; that the landlord had never told some of them their apartments were rent stabilized; that the elevators and apartments were full of mold and rotting electrical work. Hyman and Duane promised to bring D.O.B. inspectors for a “walk-through” of the building, to document structural complaints like mold, faulty elevators and bad wiring.
“But you have to organize this,” stressed Duane, “so we get it all in one day!”
As the meeting wound down, tenants agreed to revive their association, while Duane gave his aides a long to-do list: arranging the D.O.B. “walk-through,” contacting State Attorney General Andrew Cuomo’s Office about the tenants’ security deposits, and sending the Bank St. tenants a new list of attorneys, should they choose to litigate as a group.
The next day, however, tenants said they were disheartened by the meeting, and outraged that they were being asked to “take on a second job” and become activists.
“After briefly speaking with a number of neighbors,” one tenant wrote in an e-mail, “it has become clear that there is a distinct sense of outrage that our city officials were unwilling to make a commitment to us last night…to prosecute our building owner/manager for violating their obligations under J-51 regulations.” Many, she added, felt “our electeds who claim to represent the ‘little guy’ are unwilling/unable to offer anything more than advice, ‘support’ and cheerleading without city/state enforcement or prosecutorial ‘teeth.’”
Where those prosecutorial “teeth” might come from is not as obvious as it might seem, Casey said.
“The rent laws are state laws, but J-51 is a city tax-code amendment, and it’s administered by H.P.D. It’s a law school question,” said Casey, who is now making phone calls to all the relevant agencies.
Both Casey and H.C.C.’s Raskin admitted the day after the meeting to being mildly surprised that the Bank St. tenants had assumed that their elected officials could overcome the legislative, jurisdictional and political hurdles thrown up by the illegal hotel owners without sustained activism on the tenants’ part.
“They’re not used to this,” said Raskin sympathetically. “But if we don’t get the laws changed, I guarantee none of those tenants will have leases within two years.”
That thought caused him to harken back to a comment heard during the Nov. 12 meeting: “Talk, talk, talk,” mourned one of the Bank St. rent-stabilized tenants, when the meeting bogged down in details. “We need action!” she exclaimed.
