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Lawmakers Join Lower Manhattan Tenants' Legal Battle For Rent Stabilization

 Maverick Scott won his fight for rent stabilization at 37 Wall St., setting the precedent for thousands of apartments to become rent regulated in Lower Manhattan.
Maverick Scott won his fight for rent stabilization at 37 Wall St., setting the precedent for thousands of apartments to become rent regulated in Lower Manhattan.
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FINANCIAL DISTRICT — Tenants fighting to secure the rent stabilization that they contend they've long deserved now have the support of 37 city and state lawmakers in their continued legal battle.

Public Advocate Letitia James filed an amicus brief — signed by a host of local officials including state Sen. Daniel Squadron and City Councilwoman Margaret Chin — in a state civil suit against the owners of 90 West, supporting tenants who say the building should have been rent stabilized because of a tax incentive program called 421g the developers continue to receive.

“We will not sit idly by as unscrupulous landlords cheat the system to make millions while tenants struggle with skyrocketing rents,” James said in a statement. “In order to curb the impacts of our unprecedented housing crisis, it is essential that we preserve our existing affordable housing. New York is a city that always stands by our tenants, and we will continue to use every tool at our disposal to support them.” 

The legal fight at 90 West, as at several other Financial District buildings, including 85 John, revolves around 421g.

The program, launched in 1995, gave tax breaks to developers who agreed to convert their Financial District commercial properties into residential buildings. Owners were given an 80 percent tax break on their property taxes for 12 to 14 years after conversion and, in exchange, they were supposed to become rent stabilized.

More than 5,000 apartments in the Financial District could have rent stabilization status under 421g, which means that the amount that their rent can increase is by the Rent Guidelines Board, not developers.

But because of something of a loophole, many of the building owners that get the 421g tax break contend that if an apartment was rented at more than $2,000 — a rate benchmark nearly all of the units surpassed — they didn’t need to offer stabilization, and they haven’t.

A 2010 legal case paved the way for thousands of Financial District apartments to become rent stabilized, but many tenants were unaware they were living in a 421g building, and building owners weren't jumping to comply.

MAP: Find Out if Your Downtown Apartment Should Be Rent Regulated

Last year, new court battles emerged as rent hikes at 85 John and 90 West led tenants to question their landlords.

The lawmakers' support, first reported by The Real Deal, is the latest in the fight between the tenants and developers over the rent limit status.

Sherwin Belkin, an attorney for Kibel Companies, the owner of 90 West, told The Real Deal that the amicus brief was simply a political move that had no relevance to the case.

"[T]he Public Advocate should not be permitted to appear as amicus" Belkin told The Real Deal, adding that the brief “essentially repeats the same legal errors already made by the tenant-plaintiffs in misstating the law, the applicable regulations and the clear legislative history, all of which demonstrate that the owner was lawfully permitted to deregulate apartments, notwithstanding a 421g tax abatement.”