Tenants Association files lawsuit against Blackstone

Tenants Association President Susan Steinberg with local elected officials last Thursday (Photo by Maria Rocha-Buschel)

By Maria Rocha-Buschel

The Stuyvesant Town-Peter Cooper Village Tenants Association filed a lawsuit against property owner Blackstone last week in response to an attempt to deregulate more than 6,000 apartments.

Blackstone is attempting to deregulate units that are currently under the J-51 tax exemption, which expires at the end of June, and increase rents on those apartments for leases renewed or starting in July or later. The private equity firm is arguing that the regulatory agreement Blackstone signed with the city in 2015 supersedes the rent laws the state legislature passed last June, but tenant advocates and local elected officials argued at a press conference in Stuy Town last Thursday that the rent laws abolished deregulation all apartments, regardless of previous agreements.

“The new law is clear and unambiguous,” Tenants Association President Susan Steinberg said. “Blackstone Group is of the opinion that these pro-tenant reforms do not apply to them. We disagree. They cannot disregard state rent law and raise rents and deregulate units as if the law had never been changed.”

State elected officials at the press conference said that they were very specific when writing the rent laws that passed and that Blackstone was not interpreting the law as it was intended.

“After dozens of hours of hearings and floor debate, the legislature overwhelmingly approved carefully-considered legislation last June to protect the long-term affordability of rent-stabilized housing and prevent the deregulation of units and a resultant worsening of the State’s homeless crisis,” Assemblymember Harvey Epstein said. “Despite being the wealthiest landlord in the world, Blackstone must also follow the law.”

Local elected officials argued at the press conference that deregulating the units would be a violation of the Housing Stability and Tenant Protection Act (HSTPA), which established that any apartment that was rent-regulated when the law passed on June 14, 2019, would remain subject to rent regulation. Since these units were protected by rent regulation when the law passed, they argued, deregulating the units would be illegal.

The lawsuit from the TA aims to protect the more than 6,200 rent-stabilized units that were illegally deregulated while the owners were receiving J-51 tax benefits. The J-51 program is a property tax exemption and abatement given to owners for renovating a residential building.

The units Blackstone is attempting to deregulate include those occupied by original members of the Roberts v. Tishman Speyer class settlement, as well as the units occupied by tenants who moved in after the settlement. The landmark case established that thousands of apartments in STPCV were subject to rent regulation after previous owners illegally deregulated apartments in the 1990s and early 2000s while they were receiving J-51 tax benefits.

The court ruled in 2009 that these apartments needed to be re-regulated and as a result of the case, 4,300 units were put back into rent stabilization after the ruling and almost 2,000 more have been re-regulated since then.

The regulatory agreement that was signed in 2015 ensured that 5,000 units in Stuyvesant Town and Peter Cooper Village are permanently affordable, but the remainder of the units, which included Roberts tenants, were on a countdown to deregulation once the J-51 program expired. Rent increases on these units would be capped to 5% per year for five years starting in 2020, which is significantly higher than rent increases that have been approved by the Rent Guidelines Board in the last few years.

Councilmember Keith Powers said that his family has been in STPCV for multiple generations and he was grateful for the agreement with the city and the rent laws that passed last year, but he was concerned about the uncertainty about affordability because of the lawsuit.

“For generations, my family has called this place their home. I am here because this neighborhood was built to be an affordable neighborhood for middle-class families to be able to call their own community,” he said. “Many families like mine are able to have the stability of living here because of the rent protection laws for a very, very long time, and many other families have come here seeking the same opportunity, to put their kids into Little League and to call this fantastic community that I’ve called my home, their own.”

The Tenants Association, along with Steinberg and four residents, are named as the plaintiffs in the suit filed against Blackstone, the City of New York, the City Housing Development Corporation and the State of New York Homes and Community Renewal.

Although the city is named as one of the defendants in the lawsuit, the Real Deal reported the day after the press conference that the de Blasio administration has sided with the tenants in the case.

“Rent reforms ushered in a new era for New York City tenants, providing greater security for families and strengthening neighborhoods,” a spokesperson for the mayor’s office said in a statement to the Real Deal. “The terms of the earlier litigation make clear that these homes are subject to the stricter rent laws and tenant protections and they must remain under those protections.”

In an email to residents on Thursday, StuyTown Property Services General Manager Rick Hayduk said that Blackstone has committed to not increasing rents beyond the Rent Guidelines Board threshold until the case has been settled.

11 thoughts on “Tenants Association files lawsuit against Blackstone

  1. Are the 4 resident tenants besides Steinberg non-members of the TA, or do the 5 together perhaps constitute entire paying membership of the TA? Isn’t faker Steinberg worried now about losing her supposed “seat at the table” with Bloodsucker Blackstone. Powers is another hypocrite–most residents are truly sorry by now that he is “here.”

  2. Steinberg and her photo ops, never a missed opportunity with this one.

    On another note, how much more obvious can it get that this woman is a wannabe politician that loves power, just like almost all politicians?? Like 3 term Dan and some of these people in Congress who seem to never go away, Susan continues to do nothing except show up for the camera. The TA needs a complete overhaul, time to pass the baton Susie.

  3. The Blackstone Group, a member of the Real Estate Board of New York (REBNY), is primarily owned and run by its money-grubbing co-founder, Chairman and CEO Stephen Schwarzman whose net worth is $18.5 billion. According to Blackstone’s 2019 Proxy Statement, Schwartzman’s pay from 2016-2018 was $242 million.

    As Stuy-Towners know, developer Tishman Speyer tried to illegally deregulate apartments in the complex in a scheme to steal millions of dollars from them and to turn the apartments into high-priced condominiums. Shortly thereafter, the head of Tishman Speyer became the chairman of REBNY. Blackstone executives, and leaders of REBNY, consider efforts to try to price gouge and evict thousands of families from their homes whether legal or not is good business.

    In “U. N. blasts Blackstone Group for worsening the U. S. housing crisis” (MoneyWatch 3/26/19), Irina Ivanova reported that UN Special Rapporteur on the right to adequate housing, Leilani Farha, in a pair of letters to the U.S. government and Blackstone, blasted the company stating, “Blackstone’s large size and concentration in a few metro areas has made it a dominant player in the rental market, where it is having devastating consequences for tenants…Blackstone’s and its subsidiaries’ business model is pushing low-income, and increasingly middle-income people from their homes…”

    Blackstone’s unethical tactics include “purchasing housing for low-income renters and deeming it ‘undervalued,’ renovating it, dramatically increasing the rent and forcing out residents if they can’t pay. Farha also cites the addition of processing fees, automatic late fees and ‘immediate’ eviction notices if tenants are late with payments.”

    “Contrary to international human rights obligations, investment in housing in the United States of America has disconnected housing from its core social purpose of providing people with a place to live in with security and dignity,” said Ms. Farha and “the financialisation of housing in its current form runs afoul of international human rights norms and cannot continue.” …Ray Rogers …CorporateCampaign.org…stopREBNYbullies.org

    • We don’t just have Blackstone to blame for this mess we are in, we have the very people in this photo – the Stuy Town TA and our local politicians. They all pushed this deal on us as the greatest thing since sliced bread, but Blackstone’s real estate business practices were already well established and published. Why did our “TA,” mayor, councilman, etc, push a deal on us knowing damn well what this company is capable of??

      Now they want to show up in hoards to fight this? They are the reason why we are here in the first place, so maybe they should start by apologizing to each and every one of us for pushing Blackstone on us when they should have known what they were getting us in to.

      • BLOOMBERG is the primary culprit! When ST was up for sale, the tenants group put together a viable plan,with the help of some politicians (curiously maligned by some BB posters), to buy ST — it needed some bind fund support from NYC

        Bloomberg — a long-time pal of Speyer — REFUSED to allow this, disingenuously whining something about it not being the City’s job to support such a project, “That’s the role of private landlords.”

        Another dagger-in-the-heart of middle class NYC by Bloomberg!

  4. I am here because this neighborhood was built to be an affordable neighborhood for middle-class families…

    Ummm, see that elephant in the middle of the room? He’s saying that, under the Robert’s agreement, the re-regulated rents were set so high (due to back-dated MCI and vacancy increases) that the landlord had to offer preferential rents (at market rate) in order to fill them.

    At $55k/yr for a 2BR, they are decidedly NOT affordable for the middle-class families this place was built for, stabilized or not. The fact that the TA spins this as some sort of victory for tenants is nothing short of gaslighting.

  5. To all those who are curious about the membership of the TA: there are at least 30 to 35 members of the Tenants Association. All the naysayers who are criticizing the Tenants Association should just keep in mind that this is the only organization that is working year after year on behalf of all the now non-existent tenants of the Roberts Class.

    • Can’t tell if this is a joke or real, but if 30 members out of 30,000 tenants is an accurate number, which I believe it is, we are talking about .1% of tenants are members of this sham organization. The TA only fights something when there are cameras involved and they have the blessing of politicians.

      People are not going to keep paying their rents, whether low or high, if management can’t provide simple basics like heat, but when it comes to that we hear nada from Susan. Probably because it will take hard work and actual fighting with management, which they don’t want to do. Oh, and there are no cameras. They never do anything unless they have cameras right behind them.

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