The Jewish Hospital Apartment Complex goes market rate?!
photo: wikipediaDetails are still coming out, but here's a summary:
-The hospital complex was converted into apartments, which came on line (one building at a time) between 2006 and 2009.
-Since moving in, tenants have been given leases which conformed with rent stabilization rules.
-The management of the large complex (Alma) now states that they were under no obligation to offer leases that conformed to RS rules, and only did so because they would need to have such leases in place in the event that they were able to receive a J51 tax credit.
-J51 tax credits are not a "right"; the city has no obligation to award them to landlords who apply for them, and landlords are under no obligation to apply.
-Alma doesn't seem to have secured a J51, and now is issuing only market rate leases.
....tenants are concerned that large rent increases loom in their future.
Comments
-I believe the complex has over 1000 apartments in it. It is massive.
-Tenants are scrambling to see if Alma took any tax breaks that would require the apartments to be RS, and have always assumed that the leases were RS as a result of some mandate or tax credit.
-Sometimes, large landlords which are about to move large numbers of units (ie tenants) to market rate are offered tax breaks to not do so.
In those instances, the tenants are often poor and elderly, and politicians hold press conferences to announce how they helped secure the tax breaks and saved the vulnerable tenants from losing their homes.
In this instance, the tenants are not predominantly poor or elderly.
When the present lease expires, a market rate landlord has the discretion to offer a new lease to a given tenant, and set the price.
Note: My advice is not legal advice. People in the above situation should get legal advice re: Alma's obigations and lack thereof.
Are all buildings in the complex under the same rules? I thought they were all independent enterprises.
The LLCs could have a variety of investors. All of the buildings are managed by Alma.
I do not believe that Alma is developing the building under construction across from Compare.
Update 10/17/2014: I am correct. The building across the street is being developed by a different firm, Realty Within Reach.
It seems Alma (and/or the LLCs which comprise the complex) has either patiently waited for several years and now concluded the J51 will never happen,
OR
has decided that even if the J51 can happen, the benefits are not worth the RS rules that come with it.
All of which is to say: Housing goes to the highest bidder. When the highest bidder is government, government will get what it wants. But it won't until then.
If gov wants these units to be RS, then it has to pay up.
555 Propsect Place
545 Prospect Place
480 St Marks
I hope whatever they decide to do is best for them in light of their legal rights and market power.
It seems that Alma may have gone about this in a sloppy way: Alma reportedly gave tenants renewal leases to sign that were RS compliant, yet not yet signed by Alma. When the tenant brings the lease they signed in for Alma's signature, Alma is reportedly stating that they will not sign.
Instead, Alma is only offering leases which are not RS compliant, with approximately 5% increases.
...a lease is not valid until BOTH parties sign it.
If they are not on that registry, it seems Alma is within its rights to issue only market rate renewal leases. If they are one the registry, it is unclear how and why they were placed on it.
HCR should not be placing units on the registry before a tax credit is finalized.
Tenants feel they have been deliberately mislead into believing they were moving into RS units, and are exploring legal action on the basis of fraud. It is not certain whether they will win.
It is more certain they will need to sign a market rate lease to stay....
http://www.dnainfo.com/new-york/20141006/crown-heights/rent-regulated-tenants-get-red-tape-runaround-as-landlord-threatens-hikes
Despite this, Alma was granted a variance (which is discretionary on the city's part) for Astoria Cove today.
http://ny.curbed.com/tags/alma-realty
"Attention Neighbors: Please join us at a rally and press conference this Sunday, 10/19, at 11am in front of 545 Prospect Pl. to demand that Alma keep our homes affordable.
As many of you know, Alma is attempting to take our apartment out of rent stabilization, meaning high rent increases and even eviction!
Please join your neighbors, elected officials and housing groups to send Alma the message that we will not go down without a fight! If you have any questions, please email
bkjewishhospitalta@gmail.com"
Alma (along with all the other RS landlords) was only able to get a 1% increase.
...this is a different issue. Briefly, the Jewish Hospital tenants believe those rules and rates apply to them, and Alma disagrees.
Instead, they are trying to tie this action to the City Council's support of Alma re: the Astoria Cove project.
Apparently, the City Council could vote on the action this week.
If Astoria is granted, Alma is in the driver's seat: It can tell the local representatives that it is going to need better incentives than the J51 provides, or else it will continue to only offer market rate renewals.
BTW, it seems the hospital complex has 735 units, as opposed to my rough estimate of 1000 units above.
Also, it seems HCR places units on the RS registry when a developer starts the process of applying for a J51.
If a J51 is not granted, or a developer backs out of the process, the units seem to remain on the registry during and afterward.
http://nypost.com/2014/10/20/city-officials-and-real-estate-company-battle-over-rent-hike/
Note how none of articles (or the politicians) are stating the Alma is doing anything outside of their rights.
The Post article (immediately above) states Alma agreed to pursue a J51 when it purchased the hospital. Actually, the city promised Alma it would support them in securing a J51. A big difference.
As a result, the politicians are not lursuing legal action, and are instead trying to link these units to the Astoria Cove project.
If Alma values what the city has to offer, it will give the city what it wants.
BTW, the politicians might be being sloppy:
There was one person who opened up the possibility of legal action between Alma and the City Council.
Laurie Cumbo said that she would link her vote on Astoria Cove to Jewish Hospital. This would be sloppy since the Council should be voting on the issue at hand, and not penalizing any party for something that is unrelated to the vote at hand.
This would allow Alma to sue the City Council.
There are situations when a politician can't state their motivation, and when you are actually going to be a voter on the issue, may be one of them.
Note: I do not believe any of the other politicians that spoke on Sunday will be "voting" on the issue.
So, it may be as simple as the city waiving its own rules re J51 time frame to complete, or as complicated as sweetening the deal.
Also, if a developer must act as if they are RS while they have an open J51 application, they may have to give their tenants notice that they intend to not apply.
...Alma provided no such notice.
This may buy the tenants time even if Alma does not wish to pursue a J51.
https://www.change.org/p/mayor-bill-de-blasio-stand-against-destabilization-of-our-homes#share
To my knowledge, no one has found that Alma is under a legal obligation to keep them rent stabilized. Hence, the petition...
My sense is that the city and Alma are in the final stage of negotiations over Astoria Cove this week, and that if the city does not force Alma to take a J51 for the Jewish Hospital Buildings during these negotiations, this deal is done.
I.E . The complex continues to go market, and the city effectively states it is not going to take further efforts to stop it.
http://ny.curbed.com/archives/2014/11/10/developer_city_locked_in_standoff_over_astoria_cove_proposal.php
a. Those who planned to move elsewhere in the next few years.
b. Those who can afford the increase
c. Those who believe that the increased rent will result in increased amenities (quicker repairs, an in house gym, a doorman, etc).
How is Alma responding to them?
What percentage of buildings in the area are rent-stabilized?