By Maria Rocha-Buschel
The owner of Stuyvesant Town and Peter Cooper Village, has confirmed it will not purposely keep rent-regulated apartments vacant following criticism from local elected officials after reports that the company was doing so, Gothamist reported last Friday.
The position was a shift from earlier last week when the owner, Blackstone, would not commit to leasing all the regulated units, a strategy often referred to as “warehousing.” Gothamist also noted that the promise came after Mayor Bill de Blasio said that city officials would need to have “some serious conversations” with the company about the agreement it signed to keep the units affordable.
“We are renovating and leasing all vacant units, and we will continue to fulfill our commitment to voluntarily preserve 5,000 affordable apartments,” Blackstone spokesperson Jennifer Friedman told Town & Village, although she added that the company will still have to make “difficult choices” and “scale back certain investments” in light of the recent legislation.
Blackstone is now actively renting out all vacant units, although the company has spent the last several weeks working through how to conduct renovations, especially in recently-vacated apartments that have been occupied for decades.
Gothamist noted last Wednesday that Blackstone is currently assessing the cost of renovating those units given the new rent laws, which significantly impacts rent increases on rent-regulated apartments through IAIs (individual apartment increases). Changes to the rent laws mean that landlords can only pass $15,000-worth of renovations to a tenant over 15 years, which works out to an $89/month rent increase. Under the previous rent laws, landlords could exploit loopholes by claiming they spent thousands of dollars on renovations to bump tents over the threshold to make units market-rate.
Town & Village reported at the end of July that Blackstone had stopped renovating vacant apartments while the company was “in the process of evaluating capital investments” in Stuyvesant Town and Peter Cooper Village and the Real Deal reported at the end of last month that Blackstone was keeping between 20 to 50 units vacant.
Mayor de Blasio said on his weekly appearance on Brian Lehrer’s WNYC show last Friday that the city is committed to honoring the affordability deal, despite the impacts of the rent laws.
“The law passed in Albany had a lot of elements to it and is having a variety of consequences, but at the same time, a deal is a deal,” he said. “We came to a deal to protect affordability at StuyTown.”
Although landlords are not mandated to continually lease rent-regulated units, the agreement Blackstone made with the city in 2015 stipulated that the company keep 5,000 apartments in Stuyvesant Town and Peter Cooper Village affordable for a 20-year period in exchange for $220 million in subsidies.
Stuyvesant Town-Peter Cooper Village Tenants Association President Susan Steinberg said that management informed her at the end of last week that Blackstone would be proceeding to renovate all vacant units so they could be leased, which was a departure from previous conversations she had with management in which she was told they would have to “regroup and restrategize” shortly after the rent laws passed.
“In terms of their commitment to affordability, [warehousing] is not in sync with their commitment to affordable housing,” she said. “But now that they’re renovating and it’s clear they want to start renting, it’s more in line with that thinking.”
Steinberg said that management wouldn’t specify why the change was made but she speculated that recent media coverage of the 2015 deal had an impact.
“It’s kind of coincidental that there were articles coming out about the agreement with the city and now they’ve decided to renovate those apartments,” she said.