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Wednesday, October 21, 2015

Crain's Analysis Confirms that the Pressure Will Be On to Raise Rents

http://www.crainsnewyork.com/article/20151020/BLOGS01/151029987/worrisome-parallels-in-two-deals-for-stuy-town

Couple this with the Fortune's estimate of each unit being worth nearly a million dollars, and perhaps you can see where we are eventually heading.

22 comments:

Anonymous said...

Yes but they thought they were there and then Brookfield got caught up in something they wanted no part of so they stepped either aside for the time being, or stepped back.

For all intents and purposes they could have moved forward with the condo plan today.

What happened in the past 18 months that diverted their Tishman / Brookfield plan and had them bring in this Blackstone interim step?

Anonymous said...

From the earlier commenters Barrons link

http://www.barrons.com/articles/SB122066888768606315


To STR's Crains Article link in this post.

This is why the incumbents are putting New Yorkers and PCVST'ers through hell. To bailout Wall Street and REBNY from their 2007 real estate deals.

Again kicking out the middle class from their homes to rescue Wall Street and REBNY.

Its a New York City and State bailout of Wall Street and REBNY.

Anonymous said...

Absolutely correct. Plus architects and the DOB illegally chopped apartments to increase the number of higher priced two-bedrooms to increase the value of the property while the DHCR TPU intentionally left out an accurate new room count for the property when they calculated the MCI charges; thus overcharging us all while further increasing the rent roll albeit illegally.

The DOB said if we wanted to buy our apartments, we had to allow the new construction in the apartments and in the Open Spaces.

The fraud is far and wide across all agencies and elected offices.

Anonymous said...

I can only assume that given deBlasio seems a little out of it and Alicia Glen is of and for real estate investment/development, in the end this will prove either a bad deal for tenants or essentially at 'non-deal', the devil of course always being in the details.

First, over 1/2 the complex is already at preferential rates. Which means that as is, roughly 5000 units are now at legal rents. And checking the voting roles (which anyone can do), if the majority in these units is around 70 yrs of age, then for about 20 yrs, there isn't going to be a lot of turnaround anyhow, so thank you very much for nothing.
For the rest of the units, their legal rents will continue to get jacked up to the max.
So let's take a look at 3 perspectives then.

1. The long term governmental perspective: has middle class housing here been preserved for 20 yrs? Well, if the median age of legal-rent-residents is about 70, the answer is this deal has bought nothing more than what we would have with no deal at all. So deBlasio, Garodnick and the TA can lay claim to having done nothing. And of course, the new owners will probably continue renting to students which really helps the churn and jacks up the legal rents. So anyone paying the preferential rate is still in jeopardy because at renewal time, the landlord can still jack you up to the legal rent (beyond your means to pay) and then you're out on the street. Again, thank you very much for nothing.

2. The short term view: How is my life affected? Well, this question just goes back to MCIs. Expect to see more MCIs and more battles over tenants having to pay for landlord strategies to raise rents.

3. Overall: the complex is essentially in the same situation it was in under Tishman-Speyer except the new owners have been wised up to renting to students and working the MCIs. So having paid top dollar for the place, what happens if there is another real estate crash...and don't think it can't happen. Deja vu all over again?

Stuy Town Reporter said...

Your analysis is spot on, Anon 11:37am.

Stuy Town Reporter said...

A comment at Neighborhood Square:

https://neighborhoodsquare.com/n/item/4ffl?utm_campaign=Stuy+Town&utm_medium=integration_partner&utm_source=dnainfo&utm_content=nhurowitz%40dnainfo.com&prompt=top

>>be ready for the definition of "middle income" to be drastically changed skyward.... there would be zero incentive for anyone to buy this property unless they were going to aggressively going to maximize the rents . and anyone who thinks they are safe because they are in a rent stabilized apt, think again, there will be an army of lawyers figuring out anyway to trip up a tenant to force them out.<<

Anonymous said...

The more I read, the more confused I am.
If you are a long term tenant with stable rent, is it correct that your situation does not change?

STR - thank you for all the updates - do you have a twitter account?

Stuy Town Reporter said...

I believe I started a Twitter account some time ago, but I never use it.

As to your question: I am in the same position, and I do not believe anything changes for us. Not sure what happens after that 20-year expiration date, however. Big question for us, however: What happens if we want to pass on our apartments in a succession arrangement?

Anonymous said...

Exactly right. History shows the TA lawyers helped in all of the arrangements of present.

There are no legal resources for PCV ST tenants.

Stuy Town Reporter said...

From what I'm seeing, the ones who are going to potentially get screwed are our market rate neighbors.

Anonymous said...


"From what I'm seeing, the ones who are going to potentially get screwed are our market rate neighbors."

I'm afraid this is 100% correct. Blackstone paid $5.3 billion for the place. They're going to get it back from someone. (i.e. Market Rate tenants - of which I am one.) In addition to other ways to cut corners: less services, property upkeep, etc. It's destabilizing for the community. Sad turn of events.

Anonymous said...

Currently I am a Market Rate resident, and Im just wondering, in my lease we signed on to only have rents increase with cost of living 2-5%. Being the property sold what does this mean for me. I am a young professional who lives with his girlfriend who is also a young professional. Really I just want to make sure that we wont be priced out. Currently we are on the higher end of the middle class spectrum.

Stuy Town Reporter said...

I don't know about what protections you have, if any, at this point. If you are at the "higher end of the middle class spectrum," you should be prepared for anything, but again, you may have some legal protections. You should definitely address this at the forthcoming Baruch College meeting this Saturday or directly to the TA or Garodnick. If the latter course, do tell us what one or the other said.

Anonymous said...

I am a long timer paying the legal rent. According to what I've read, my situation, the situation of those like me will not change. Those paying the preferential rents are at risk and anyone new coming in at the preferential rent will probably be at even greater risk.
This is status quo so far as I can see.

Given that our options and voices are limited, what I really object to with respect to the current announcement is deBlasio, Garodnick and/or the TA bragging they've done something great for us. I'd have some respect for these people if they had the honesty to admit that they tried and wound up being able to do squat for us.

Just don't know where they get the brass to get up there in front of us and make bogus claims about their impact. And now, if I understand correctly, Garodnick and the TA will host a meeting introducing our new landlords to us. Thanks so much.

I'm expecting another tightly controlled meeting where no statements and no questions will be taken from the tenants. Apparently Garodnick and the TA feel their role is to be herding sheep.

Would be great if somehow the pols were compelled to explain to us how the new deal is any different from the status quo or how things would be different if there were no deal.

Anonymous said...

3:41 PM, you are right on point with your post. The TA has long treated its dues-paying members like sheep and when you attend one of their meetings are greeted with grim, prune faces and immediately asked if you are a member, if not, why not and would like to be a member and donate some money. At least that's what I saw when I attended some of their meetings. Garodnick is a classic shyster, flimflam man. A snake oil salesman in a nice suit. He's as far up the asses of the REBNY and Cuomo as he possibly could be. I despise him and his ilk.

Anonymous said...

Here's how I see it for current rent-stabilized tenants (i.e., the original ones, not the Roberts ones). No deal reached by the city and Blackstone can alter our rights under the Rent Stabilization Law. Assuming that that law continually gets renewed, nothing will change for us. We can stay for 20, 30 40 years -- whatever -- under the rent-stabilization scheme (along with guaranteed renewal leases and modest increases set each year by the Rent Guidelines Board). The only caveat is this: After the J-51 benefits expire in 2020, we are subject to high-rent (luxury) deregulation IF the rent rises above $2,700, and the household income is more than $200,000 for the two previous years (or whatever rent/income threshholds may exist in the future). Otherwise, we're good.

Anonymous said...

Also, rights to succession for our family members will continue for us rent-stabilized tenants.

Anonymous said...

MRate : In a nutshell - if you have two numbers on your lease - lower and higher you are royally fucked. Those who have one number on their leases will get the annual % increase when city votes.

Atomic Man said...

Best line of all:

"The clearest sign of difficulty was when Tishman relaxed the longstanding no-pet policy in a desperate attempt to improve Stuy Town's marketability."

Maybe the new owners will be smart enough to stop granting dog permits, and in 15-20 years we'll be dog-free again!

Anonymous said...

Charge the owners of dogs per dog. Our building has students who have 4 dogs. a one fucking bedroom, 3 students and 4 fucking yappers.

Anonymous said...

5 04 pm. This. Two numbers are bad. Very very bad.

Anonymous said...

Its not that hard to hose the paths but the landlord refuses to pay for groundskeepers. It doesn't cost that much. Or maybe the landlord wants us to complain about dirty paths to distract us from important things like our paying for the water valves for the change in occupancy that according to DOB is not happening but according to DHCR we have to pay for.