By Maria Rocha-Buschel
The Blackstone Group, owner of Stuyvesant Town-Peter Cooper Village along with Kips Bay Court and other properties in the city, will stop apartment renovations in Stuy Town as the firm considers the impact that the new rent regulations will have on their business.
Crain’s New York Business first noted the change earlier this month, citing a spokeswoman for Blackstone who said the company is “in the process of evaluating capital investments at Stuy Town.”
A source also noted that renovations on vacant apartments at the complex, which has more than 11,000 units, would halt, possibly in addition to larger construction projects on the property. It’s unclear if management is currently in the process of any major capital improvement (MCI) work. The source confirmed that legally-required repairs to fix leaks or hot water service will continue.
STPCV Tenants Association President Susan Steinberg said that she isn’t sure what precisely this change will mean for current tenants.
“I would imagine that [Blackstone is] evaluating their options,” she said. “It’s just not clear what impact the law will have.”
Steinberg added that she hoped it meant renovations would stop only on vacant apartments and not occupied units that need regular maintenance and repairs, which is required by law. She also speculated that if apartments won’t be renovated, current residents might be interested to know how the rents would be decided on those apartments because the cost might ultimately be cheaper than some tenants’ current rent.
Real Estate Weekly reported this week that the changes to the law mean that landlords can only pass $15,000 worth of renovations to a tenant over 15 years, which works out to an $89 rent increase. Under the previous laws, landlords were able to exploit loopholes by claiming they spent thousands of dollars on renovations to bump apartment rents over the threshold of rent stabilization to make units market-rate.
The new regulations also eliminated the 20% vacancy bonus, further curtailing the amount the landlords can increase the rent on stabilized units.
Steinberg said that one of the main concerns for the TA continues to be charges for MCIs for building-wide upgrades. Under the previous law, the landlords could recoup costs on these projects by increase rents building-wide by as much as 6% but under the new regulations, the increases are limited to 2% a year.
“The Division of Housing and Community Renewal has to come up with what is MCI-able, if I can use that term,” she said of the changes. “They’ll have to see if there are changes and determine the industry standard for the cost so that the landlord can’t just charge anything.”