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June 17, 2015- By Steven E. Greer
DNAinfo has a story today about the 421g law making FiDi luxury “condos” rent-stabilized despite seeming to be market-rate luxury apartments. They cite a 2010 case (W Associates v. Maverick Scott). A housing court judge ruled that a Wall Street luxury building was actually stabilized because it took 421g tax breaks. The judge cited as precedent the ruling of Roberts v Tishman Speyer, which dealt with a similar tax law called J-51.
The lawyer for the landmark 421g case of W Associates v Scott was Serge Joseph. This is a NYT story on it back in 2010.
The law firm that won the J-51 case of Roberts v Speyers writes about how it is a mystery that the 2010 W Associates v Scott case above did not trigger a landslide of lawsuits from renters.
The DNAinfo story mentions that even if the building is no longer participating in the 421g law, that the tenants are still living in rent-stabilized apartments. If they moved in during the period that the law was in effect, then the stabilization still holds.
However, the DNAinfo story just discusses the smaller 421g law. The 421-a law is much bigger, applies to the entire city, and is the most pressing piece of legislation in the state right now. Mayor de Blasio and Governor Cuomo are butting heads, and the 421-a law might expire.
The 421-a law also gives tax breaks to landlords if they provide affordable housing units, and makes the property rent-stabilized, like the 421g and J-51 laws. In Battery Park City, the unusual nature of the property means that building owners can avoid filing their 421-a status with the city’s Department of Finance, since the land is owned by the BPCA and property “owners” actually just rent from the BPCA.
The PILOT fees are not “taxes” paid to the city, but are rather payments to the BPCA, so the recording process with the city’s finance department leaves loopholes whereby buildings in BPC are not properly registered regarding 421-a, 421g, J-51, etc. Even basic records of taxes paid by BPC buildings are not found in the city records.
BatteryPark.TV obtained via FOIL the leases of all of the buildings in BPC. They are contracts between the BPCA and the building owner, and all of them have 421-a provisions in them. However, many of the “luxury condo” buildings in BPC are not telling tenants that they are taking the 421-a tax breaks, and are, therefore, also rent-stabilized.
Rent-stabilization not only keeps rent increase in control, but the law also prevents landlords from evicting tenants by not renewing the lease for no good reason. Last year, thousands of BPC residents were forcefully evicted as their apartments were converted into “condo”. If they only knew their rights, many of them could have kept their apartments and avoided relocating their children to lesser schools.
The following was found in the CB1 Affordable Housing Task Force report “Affordable Housing in Lower Manhattan” June 2011. Pg 8.
“For Community Board 1, the loss of affordable apartments has been visible in the past decade. As mentioned in the History of Affordable Housing section, IPN opted out of the Mitchell-Lama program in 2004. …………… As of 2009, new tenants moving into Gateway Plaza in Battery Park City are no longer covered by rent stabilization – a change that marks the beginning of the eventual destabilization of all Gateway’s 1,700-plus units.”
The report deals with, in some detail, the cases of IPN tenants and Southbridge tenants opting out of (or planning to opt out) of Mitchell Lama. But the report’s only mention dealing with GP is wholly contained in the quoted section above. Why the lack of detail concerning Gateway Plaza viz a viz rent stabilization? Seems to be an obvious omission.
smells like Shelly and cronies on CB1