Quantcast

The DNAinfo archives brought to you by WNYC.
Read the press release here.

Crackdown on Landlords Uncovers 2,400 Units Soon to Become Rent Regulated

By Amy Zimmer | August 26, 2015 5:40pm
 Greenpoint had among the highest number of buildings that were found to have shirked laws requiring they register rent-regulated units in exchange for 421-a tax breaks.
Greenpoint had among the highest number of buildings that were found to have shirked laws requiring they register rent-regulated units in exchange for 421-a tax breaks.
View Full Caption
MPNA/Evelyn Matechak

MANHATTAN — Nearly 200 building owners across the city who took hefty tax breaks under the state's 421-a program without fulfilling the law's rent-regulation requirements received notices from the state putting them on alert this week.

The tenants in roughly 2,400 units — in buildings that were originally planned as condos but went rental because of the 2008 market crash — are entitled to rent-regulated leases that are subject to rules regarding, for instance, annual leases that have limits on how much rents can be raised each year.

Greenpoint, Williamsburg and Astoria are among the areas with the highest concentration of these buildings, according to maps released by the Attorney General's office. (See here and here.)

The crackdown is part of the continuing efforts of the state's Tenant Protection Unit working with the AG, whose ongoing investigation uncovered 194 building owners who received 421-a tax benefits but failed to register their apartments as rent-regulated.

The building owners had filed for 421-a tax breaks indicating they would become condos, thereby exempting them from having to register units as rent-regulated. But when they changed course because of the recession and opened their buildings as rentals instead, they got market rates for the units, skirting the law that requires developers of rental buildings using the tax breaks to register apartments as rent-regulated.

"We will not tolerate landlords who break the law and deny their tenants rent-regulated leases, plain and simple," Gov. Andrew Cuomo said in a statement.

If these landlords don't comply, the TPU could freeze the buildings' current rents as well as pursue overcharge actions against the owners for collecting improper rents, and seek damages, officials said.

"The law says: if you have not sold units under a condominium offering plan, you are a rental building and must register those units as rent regulated,"  James Rubin, Commissioner of New York State Homes & Community Renewal, said in a statement. "If there are owners out there who believe they are able to defy the law without consequences, know this: We will continue to enforce the law to its fullest extent."

Changes to the 421-a law, which was established during the fiscal crisis of 1971 as a way to spur residential development, will take effect in January.

The revamped program would eliminate tax benefits for luxury condos. It would not, however, eliminate the abatement for condos altogether, as Mayor Bill de Blasio originally called for.

Condos built in the outer boroughs with no more than 35 units could still get the break provided their average sales price is roughly $700,000 and new residents remain in their units for at least five years.