By Gerard Flynn
For decades after Metropolitan Life opened Stuyvesant Town and Peter Cooper Village in 1947, residents of the 110-building twin-housing projects on the East Side held some very tender affections for the insurance giant.
“Initially we called it ‘Mother Met,’” Alvin D. Doyle, president of the Cooper Village and Stuyvesant Town Tenants Association, remembers.
“They were thought of as being very benevolent and they were a great landlord at the time,” he said.
Doyle was among the many baby boomers born after World War II into the sprawling housing complex, which has 11,250 apartments and stretches for 80 acres from First Ave. to Avenue C, between 14th and 20th Sts.
Constructed for returning veterans, it was built at a time when the city was in the midst of a major housing crisis and became known as an affordable housing community blessed by a socially responsible landlord, offering spacious and secure apartments for its approximately 25,000 middle-income residents, including firefighters, teachers and police officers.
However, in recent years, efforts by Met Life to cash in on the city’s real estate boom has changed its goodwill image among occupants and left a lot of long-term tenants like Doyle worried about their future.
In 2001, the company announced that it would no longer offer rent-stabilized apartments, and since then it has converted more than 30 percent of existing units to market-rate rent under the luxury-decontrol provision. Under the provision, a 1993 insertion into the rent-stabilization law, landlords may charge 1/80th of the cost of any major capitalization improvement, or M.C.I. — such as replacing roofs or windows throughout the entire complex — to tenants in the form of increased rent.
However, the rewards to the landlord don’t stop there. The provision allows a landlord to remove the unit from rent protection if the additional cost from improvements push a unit’s rent over $2,000 and its combined occupants make over $175,000 for two consecutive years.
It’s this provision Doyle and others see as the reason why any investor would be interested in paying the $5 billion Met Life is reportedly asking, and they fear that any future buyer would continue this practice at least as aggressively as the current landlord and eventually evict everyone, marking the end of an important era in affordable housing in the city.
“We are all concerned; we are afraid that the place will become unaffordable and will just become another rich place for market-rate housing,” Doyle said.
On the Web site of the leasing office for Stuyvesant Town and Cooper Village, it’s clear that middle income is no longer the market Met Life is luring, as the online pitch offers “luxury rentals” featuring “bright, luxurious, oversized” suites.
Doyle said that since the mid-’90s, Met Life has done more than $100 million in major capital improvements, with more pending. Some of these, he said, have been unnecessary, including replacing expensive elevator cabs in Stuyvesant Town when existing ones were functioning fine.
“They are replacing elevators that will cost between $125,000 and $150,000 per cab, and there are at least 178 elevator cabs,” he said. It’s a move that will add over $20 million to rents collectively and on into the future forever, Doyle said.
“In Cooper Village they did renovations for a total of $34 million, which was added to the rents and will stay on the rent in perpetuity, even though they recouped the cost after four years, and it moves each apartment closer to the $2,000 mark,” he said.
In addition to decontrolling rent-stabilized apartments that are already occupied, landlords can also use luxury decontrol on units that have already been vacated.
“Every time there is a vacancy in a rent-regulated apartment the landlord gets an automatic 20 percent turnover bonus on the rent and he doesn’t have to do anything,” said Bennett Baumer, tenant organizer for the Metropolitan Council on Housing, a citywide tenants union.
But the landlord usually doesn’t stop there, Baumer said. If he plans to remove the unit from rent regulation, vacancy — and the law — offer a more appealing option than the 1/80th rule.
“In addition to the turnover bonus, the landlord can also do $100,000 in repairs to the apartment and under the law is allowed to add 1/40th of the cost to the rent, which, combined with the turnover bonus, will push the rent over the $2,000 mark,” he added.
Assemblymember Sylvia Friedman, while acknowledging tenant concerns, said that because the sale is still pending it shouldn’t be the scare story it has become.
“My sense is it is too early to have any sense,” she said. “There are several possibilities; some are excellent and others are a little scarier. It depends on who purchases the property; if it is the equivalent of Trump, then yes, there are reasons to be concerned.”
Friedman did add, however, that the issue of major capital improvements is a major one at the complex and is a growing concern among tenants citywide. And she condemned the Division of Housing and Community Renewal, the state agency that administers rent-regulation laws, for being “developer friendly.”
“Rewiring every building is a major capital improvement. But changing elevators is not, and this is done for the benefit of the landlord,” she said, adding that Met Life is doing such unnecessary improvements “in order to get rid of as many rent-regulated tenants as possible.”
The sale of Stuyvesant Town and Cooper Village is being managed by CB Richard Ellis’s top brokers, Darcy Stacom and William Shanahan, and has reportedly attracted interest from such high-powered developers as The Related Companies, Tishman Speyer, Vornado Realty, UBS Bank and the Blackstone Group.
John Calegna, a Met Life spokesperson, declined to go into details about the sale, except to say that “the market is receptive to this and once we get the price we are looking for, we will sell.”
Led by City Councilmember Dan Garodnick — who grew up in the development — local politicians the day following Labor Day called on Met Life to accept a purchase offer by a tenant-backed group of investors. But it’s unclear whether the landlord intends to consider such an offer.
One Stuyvesant Town resident, a lawyer’s assistant who doesn’t wish to be identified, sees Met Life’s reversal from its initial mission at the sprawling complex as “very disheartening.”
“I have always been happy to live there. It’s so idyllic, watching the birds hop around on the trees and smelling the grass when it’s cut,” she said. “It’s too bad that they are changing the flavor of the place; it used to be an interesting mix of teachers, firefighters and doctors. But because of the way rents keep going up, like the rest of the city, it’s turning into a community of extremes.”
