Vulture Equity Circles East Harlem

Issue 237

Embattled tenants pressured to take buy-outs.

Georgia Kromrei Jul 3, 2018

In a rent-controlled apartment on the first floor of 231 E. 117th St., Andre Calderon is sweltering. The temperature in his home has averaged 85°F since mid-May.

“I have to keep the door open,” he says. “What a way to live. I can’t turn the A/C on with the heat because it will get the walls wet.”

When Calderon first called 311 to complain he was told the city does not take complaints for too much heat until June 1. A few weeks and several additional phone calls later, his radiator is still hot to the touch.

Since the investment firm Emerald Equity bought 231 E. 117th St. and 48 other East Harlem buildings in December 2016 — the “Dawnay Day portfolio” — its tenants have experienced badly deteriorating living conditions, coupled with offers to pay them to leave. According to city Department of Housing Preservation and Development (HPD) records, there has been a dramatic increase in the number of complaints about lead paint, mold, pests and lack of cooking gas and heat. At a joint meeting of the tenants’ associations from 105 E. 117th and 231 E. 117th in March, resident after resident spoke about their children getting rashes from lead dust, periods without cooking gas, infestations of cockroaches and rats and a desperate need for repairs.

“Do they think that because we are Spanish we are stupid?” Aracelia Gines asked. “That we do not know our rights?”

EXPLORE THE DATA: Tenant complaints have skyrocketed since Emerald Equity bought up 49 properties in East Harlem.

Meanwhile, ArchRock, the building’s management company, has been aggressively offering tenants cash buyouts, hastily renovating vacated apartments and renting them out for as much as three times what the old residents were paying.

This pattern is all too typical of how loopholes in the city and state rent-regulation laws give landlords an incentive to drive out rent-controlled and rent-stabilized tenants and move wealthier, market-rate renters in. The state’s 1997 weakening of the laws let landlords charge an automatic 20 percent rent increase whenever a tenant moves out and enabled them to deregulate vacant apartments once their rent got high enough. The state’s minimal enforcement of its laws against illegal overcharges has enabled owners to deregulate thousands of apartments illegally.

The state’s rent-stabilization laws, which protect an estimated two million tenants in New York and its suburbs, will expire in June 2019. Tenant advocates are urging the state legislature to repeal vacancy decontrol and the automatic vacancy bonus and tighten limits on how much landlords can raise rents for renovations. The Assembly has passed such measures several times, but in the state Senate, they have been blocked by an alliance of Republicans and renegade Democrats, with the tacit support of Gov. Andrew Cuomo.

The Brookfield Properties hedge fund, which loaned Emerald Equity $300 million to buy the Dawnay Day portfolio, has so far contributed $150,000 to Cuomo’s 2018 re-election campaign, through three separate limited-liability corporations.

The Brookfield Properties hedge fund, which loaned Emerald Equity $300 million to buy the Dawnay Day portfolio, has so far contributed $150,000 to Cuomo’s 2018 re-election campaign.

Crystal Vizcaíno, a community organizer with the Urban Housing Assistance Board (UHAB), says 105 E. 117th St. has the worst living conditions she has seen in her career. When she visited Lucy Delemaco, a homebound, 93-year-old, Cuban-born tenant who has lived in her rent-controlled apartment since 1946, she found “conditions that were so bad, her home attendant could no longer care for her.”

“The windows were open in the winter because the smell of mold was so strong,” said Vizcaíno. “The only source of heat in the apartment was the stove. There were five holes in her ceiling, and her apartment had not been renovated since the 1970s. Emerald Equity knew how she was living.”

Delemaco and 12 other members of the building’s tenant association signed a petition calling for Emerald Equity to make repairs. Vizcaíno delivered it to the company on January 10. Emerald did not respond. Two weeks later, HPD placed 105 E. 117th into the Alternative Enforcement Program, a citywide list of 250 buildings the agency categorizes as “severely distressed.”

UHAB was hired by Manhattan Legal Services to organize tenants in Emerald Equity buildings in East Harlem. They were able to finance it because the City Council approved increased funding to help tenants in disputes with their landlords last November, a concession granted for supporting the upzoning of East Harlem.

Tenants also got a boost from The Indypendent. Our February feature article on tenant organizing at 231 E. 117th was distributed in other Emerald Equity-owned buildings, translated into Spanish and made available online. UHAB is now organizing in six Emerald buildings.

Management has sought to evade protests. In February, ArchRock told tenants at 231 E. 117th that its office in the neighborhood had moved and that if they had any complaints, they would have to send them to a post office box in Brooklyn. The tenants later discovered that ArchRock had relocated the office to a space a block further east on East 117th St., where the street-level windows are covered with thick black paint and employees come in and out through an unmarked cellar door.

“Of course they don’t want us to know where the office is,” says 231 E. 117th resident Maria Miranda. “They don’t want to see me in there complaining anymore.”

Miranda, 63, suffers from asthma, and breathing in dust from her unrepaired bathroom has sent her to the emergency room twice this year. Yet she has played a leading role in the tenant organizing drive.

Stopping at every flight to catch her breath, she slowly climbed the stairs of 322 E. 117th St. in March. On the top floor, nearly all of the apartments were empty and in the process of being renovated. The sole remaining tenant said he was leaving at the end of the month. He hadn’t had gas for months and was tired of cooking on a hotplate.

Tenants in multiple ArchRock-Emerald Equity buildings in East Harlem described similar efforts to get them out. The strategy appears to be two-pronged: render living conditions unbearable and then offer tenants buyouts or relocation to Emerald Equity properties in the Bronx or Yonkers.

From 2014 to 2016, before Emerald Equity acquired the Dawnay Day buildings, HPD filed 36 lawsuits demanding that their owners make repairs or correct violations. The department has since filed 74 such suits, more than twice as many, against Emerald.

In April, reporters confronted an ArchRock employee outside its East Harlem office, asking him about the status of the 17 HPD lawsuits still pending. “Which lawsuit?” the man, dressed in business casual attire with a Bluetooth headset affixed to his ear, responded, telling the reporters they could expect a call from “the guy you met on the street” before disappearing into the cellar.

Repeatedly asking a tenant to leave their home after they have declined a buyout, or trying to buy tenants out without a formal written offer, are both illegal. But it is a tactic that often works, is highly profitable when it does and poses a problem for tenant organizers who can’t keep pace with the buyout mill.

“The same person has knocked on my door six times since Christmas, offering me money or the Bronx,” said Edgar Gonzaga, 32, who has lived at 322 East 117th all his life. He pointed at gaping holes in his floor and ceiling where a gas pipe was installed after the gas line broke, leaving he and his family unable to cook. “They’re trying to make us miserable,” he said. “They know if they renovated this apartment, they could get $3,000 a month. I pay $1,068.”

María Martínez accepted $22,000 to leave the one-bedroom apartment in East Harlem that has been her home for 18 years. She said the last straw was when ArchRock told her that the rent would increase from $1,392 to $1,500. If Emerald Equity can rent it to a new tenant for $3,000, it would recoup the $22,000 it spent buying her out in about 14 months.

Martínez says she would have rather have stayed in her apartment, “with my friends nearby,” but she moved to Pennsylvania with her husband and daughter in May.

“They’re emptying the buildings faster than we can organize them,” says Crystal Vizcaíno.

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Photo:  TORTURED TENANT: Florencia Aguilar, one of many long-suffering residents 231 E. 117 St. Credit: David Grossman.