In an ideal world, rent stabilized apartments would be reserved for those strictly in the lower and middle class – those who can’t afford an apartment that stands to skyrocket within a year or two of signing a lease. According to a new article in the New York Times, however, this isn’t the case – not at all. On the contrary, rich people who live in luxury rentals may benefit from rent stabilization. The building in question in the Times piece is that of 37 Wall Street, a property that boasts, “A marble-lined lobby. A private screening room. A cavernous residents’ lounge filled with glowing crystal chandeliers, 30-foot floor-to-ceiling curtains, creamy leather chairs and pool tables lined with dove-gray felt.” The apartments at 37 Wall Street, which not only houses luxury homes but also a Tiffany store, and sit among the country’s greatest financial buildings, were built with the help of a tax break. Hence, if a Housing Court ruling in December holds, all 372 apartments could become rent-stabilized, and so too could a bevy of other apartments in other luxury buildings built under the same tax break.
The article spotlights Ben Rosen, an 23 year old analyst currently splitting his $4,500 rent with two other roommates. That means Rosen is paying a mere $1,500 a month for a gorgeous luxury apartment with top of the line finishes and incredible amenities. He couldn’t find a studio for that price. The building in question, as well as 8,600 other units in the area, were built under the 421-g program, which was conceived in the mid ninetes to help revitalize downtown Manhattan. It gave developers up to 15 years of tax breaks to convert commercial buildings in the area into residential ones. Under it, the luxury condominium buildings of Wall Street that we know today were born.
Under stabilization, rents can be raised only by an incremental percentage each year. But those protections generally end after an apartment becomes vacant and the rent hits $2,000; or if the $2,000 mark is reached and a household’s income exceeds $175,000 over two years.
Reports The Times, “The decision has led to something of a battle royal between landlords, who are pushing for the case to be reargued — a judge will decide in the coming days — and tenant advocacy groups. It also raises the question of whether wealthy denizens of plush apartments should receive rent protections intended for the middle and working classes. Not only could affected tenants have eviction protections, but some of them could also see cuts in their rent.”
Rent stabilization in New York has always been something that evaded the rich – and why shouldn’t it be? Those who can afford to pay for their fancy apartments should be required to do so. This fight comes after the October 2009 landmark decision at Peter Cooper Village and Stuyvesant Town, in which the court ruled that Tishman Speyer had illegally deregulated thousands of apartments and charged market rate rents for the homes while receiving J-51 tax breaks on the property. Many are saying that the ruling at Stuy Town, which was in favor of the tenants and brought hundreds of rents back down to their rent stabilized rates, has laid the stomping ground for the case at 37 Wall. However, PCV and Stuy Town were built for middle class denizens; 37 Wall and its cohorts were always aimed at the young and the wealthy. Why should those who can afford to pay market rate get rent stabilization?
Photos: Courtesy of the NYTimes
Where do you stand on this debate? It’s a hot button topic to be sure, and while we understand the legality behind the rulings, we tend to agree with Harold Schultz, a senior fellow at the Citizens Housing and Planning Council when he says, “This is the ultimate case about rich people,” he said, “with problems that I’m not sure we should care about.”
