CROWN HEIGHTS — Rent-regulated tenants at a large Crown Heights apartment complex have been left scratching their heads after receiving notices that they had to pay market rates and being told that they never should have received the discount in the first place.
Alma Realty, the management company responsible for the six-building Brooklyn Jewish Hospital apartment complex on Classon Avenue between St. Marks Avenue and Prospect Place, has been sending out market-rate rent renewals to some tenants who formerly had rent-regulated leases, some of them effective immediately, tenants complained.
The increases range from 4.5-7 percent — a modest amount for a single year, but “far above the rent-regulated rents that are allowed” by the Rent Guidelines Board, according to tenants who spoke at an emergency meeting last week at the Center for Nursing and Rehabilitation on Classon Avenue between Prospect and Park places.
“What Alma does doesn’t make any sense,” said a tenant who gave her name only as Celeste, who has lived in the complex since 2010. She said she entered the complex after signing a market-rate lease, but in the next three years, received exclusively rent-regulated leases from the management company without any explanation as to why.
“They’re just doing whatever. It’s very shady,” she said.
There are a number of ways that apartments can lose their rent regulation including vacancy and high rents, and experts say landlords often try to illegally remove apartments from the rent-regulated rolls to increase their income.
Tenants said Alma’s reps blamed the rent increases on the city's rejection of a tax abatement application, but gave them few details about the process or the timing.
Alma’s representatives confirmed to DNAinfo on Friday that “the majority” of tenants at the Brooklyn Jewish Hospital complex were offered rent-regulated leases when the building opened in 2005.
They said the company that owns the complex, 555 Prospect Associates, LLC, applied for a J-51 tax abatement from the city's Department of Housing Preservation and Development some time between 2010 and 2013. After the city rejected the application, the company began issuing market-rate leases because there was no longer an incentive to offer rent-regulated rent, reps explained.
“It was ownership’s intention to get those tax benefits,” said Nick Conway, the managing agent at the complex for Alma.
According to state records, 555 Prospect Associates LLC is registered under Alma's corporate name and address.
A spokesman for HPD confirmed the complex applied for a tax abatement but was rejected by the city because they missed the application deadline. Reps did not have the date of the application or the date of the rejection.
It was not clear if the apartments were officially rent-regulated or if the owner offered discounted rates independently. There are hundreds of units in the complex, but it was not clear how many people were affected by the change.
The state agency that oversees rent-regulated buildings, the Division of Housing and Community Renewal, did not respond to repeated inquiries from DNAinfo about the Brooklyn Jewish Hospital complex.
The confusion angered many in the complex, along with tenants rights groups and elected officials who attended Thursday's meeting.
Assemblyman Walter Mosley, whose staff is helping tenants with the issue, said he suspects Alma used the rent-regulation of the building as a “marketing ploy” when they first opened the building. Now that the market in Crown Heights has improved dramatically, they’re changing the rules, he said.
“This is very unique. The city has never seen this before,” he said of Alma’s actions at the complex.