The tax abatement allows landlords to renovate buildings and receive a tax break and in exchange, the apartments become rent-regulated. Tishman Speyer got into trouble when it deregulated thousands of rent-stabilized apartments when there was a vacancy and the rent surpassed $2,000 per month. The court ruled that J-51 tax abatement continued to extend rent regulations onto those 3,000 apartments. These once again rent regulated tenants will have protections against large rent increases, more housing rights (right to lease renewals among others) and have their rent reset as per the Rent Guidelines Board’s (RGB) percentage increases. Last year the RGB raised rents by 4.5 percent for a one year lease and 8.5 percent for two year leases in over one million rent stabilized apartments. Rent regulated apartments are the largest source of affordable housing in
Tishman Speyer bought (in retrospect, overpaid) the mega-complex in 2006 for $5.4 billion and is reportedly not able to push rents high enough to meet its bloated debt payments.
From the New York Times:
Alexander H. Schmidt, a partner at Wolf Haldenstein Adler Freeman & Herz who represented the tenants, added: “It’s a very important victory not only for our clients but for tenants citywide. These building owners understood, or should have, that they were taking a risk. They were relying on an interpretation of the law that contradicted the plain meaning and words in the statute.”
A statement by Manhattan City Council member Dan Garodnick, who represents Stuy-Town and Peter Cooper tenants:
“The court’s decision today was as clear as it was correct — Tishman Speyer cannot take $24.5 million in tax breaks while they push rent stabilized tenants out the door.
“This is a landmark victory for thousands of tenants at
“It is also a victory for the City, as it means keeping thousands of units of affordable housing, which will remain regulated through 2017 — or as long as Tishman Speyer is receiving J-51 tax breaks.”