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BatteryPark.TV previously reported, “Exclusive: Your building is likely rent stabilized and you had no idea” in which we uncovered the fact that an obscure law created in 1971 to spur new real apartment construction might also have placed the buildings under the regulation of “rent stabilization” laws. Those city and state laws, called the “421-a” laws, gave significant real estate tax breaks to the building owners.
Since the vast majority of apartments constructed since 1971 take advantage of the 421-a tax breaks, and are therefore rent stabilized buildings, the rent increases on tenants, even in “market rate” units, should have to obey the rent stabilization guidelines and limits on increases.
However, many buildings in Battery Park City taking advantage of the 421-a law never revealed to tenants in the leases that the rent stabilization laws are in effect. The landlords have proceeded to evict tenants at will and raise rents any amount that they deemed would be supported by the market conditions.
22 River Terrace, and now two other buildings in Battery Park City, are evicting tenants claiming that they are market rate renters and have no rights. However, if the buildings are in deed rent stabilized, then the evictions could be illegal.
BatteryPark.TV obtained the original leases made between the BPCA and 22 River Terrace, 41 River Terrace (AKA Tribeca Pointe), and 400 Chambers (AKA Tribeca Park). Those are the three recent buildings undergoing conversion from rental to condominium ownership, and evicting existing renters. All three accepted the tax breaks afforded under the 421-a laws.
BatteryPark.TV spoke with a leading real estate lawyer who has handled landmark cases relating to market rate evictions, Mr. Kevin McConnell of the law firm Himmelstein, McConnel, Gribben, Donoghue & Joseph. When asked whether the 421-a laws place the entire buildings under rent stabilization status, he replied, “Absolutely. And we have gotten calls from people in 22 River Terrace.” (We will have a lengthy interview with him soon).
Mr. McConnell was unaware, off the top of his head, of any major landmark cases in New York that used the 421-a law to challenge evictions or rent increases. Likewise, no mainstream article in the press about the 421-a programs has mentioned the rent stabilization provision of the law. This seems to be untested legal waters.