Rent-regulated tenants say major capital increases are being used as a tool against them
Upper West Side Stonehenge Village is an apartment complex spread out over three addresses on West 97th and 96th Street. The complex was in the news earlier this year for being one of a handful of places on the Upper West Side to bar rent-regulated tenants from accessing amenities like the fitness center. Stonehenge residents said such policies amount to segregation, and are used as an intimidation tactic to pressure rent regulated tenants out of their homes.
Recently those tenants met to decide whether they would fight a different kind of tactic they say is aimed at the same goal of deregulating their units: major capital increases. On paper, an MCI is a necessary infrastructure upgrade to a building, often costing hundreds of thousands of dollars, which is spread out in relatively nominal monthly fees to each tenant in the building over a number of years.
At Stonehenge, residents have seen three MCIs in the past three years, all of which the rent regulated tenants say were unnecessary. In 2012, the elevator system in 135 West 96th Street was upgraded, at a cost of $15 extra per month for each tenant living in the building. Last year, the building switched over to metered electricity – another MCI – meaning residents paid their own electric in a separate bill to the landlord, Stonehenge Management LLC, who does not disclose the rates at which they’re charged, according to the tenant association’s legal liaison Sol Magzamen. Of the 400 or so units at Stonehenge Village, about 60 percent are rent regulated, according to tenant association president Jean Green Dorsey.
This year, the boiler that provides heat to Stonehenge was replaced by a top of the line model at a cost of $10 a month per bedroom in a given unit.
All told, Stonehenge residents are paying anywhere from about $30 to $70 extra per month, depending on the building they live in and the number of bedrooms in their apartment. Nominal, maybe, but a hit for some longtime residents nonetheless.
“There are people in the building who are living on social security and have fixed incomes, and they’re on the edge,” said Magzamen. “If they’re in a three bedroom apartment that’s $30 a month, and there are people living here who have been here since 1968.”
According to Magzamen, the city is offering tax incentives to building owners who convert their heating systems to a type that doesn’t use Con Edison’s steam pipes, which run under New York City streets and cause potholes. Building owners also get a tax break if they convert their boilers to run on cleaner-burning fuel. “The city was urging landlords to make a change,” said Magzamen.
The boiler replacement MCI at Stonehenge could be questionably categorized, however, as there is case precedent showing such upgrades are regarded by the state Dept. of Housing and Community Renewal – the agency that presides over MCIs – as replacements and not capital improvements, according to Magzamen.
Regardless, enough residents were feeling the pinch that a decision had to be made on whether to take the issue to court.
“It’s a little scary when your income is fixed and these things come bouncing in,” said Dorsey at the tenants association meeting.
According to Councilman Mark Levine, the facts are often on the side of tenants when landlords come looking to implement an MCI. Indeed, there are stringent rules governing when an MCI can be imposed on tenants – from when they’re allowed to replace plumbing fixtures to the useful life of vinyl siding. Landlords can replace those things whenever they want, but can only pass the cost onto tenants through an MCI if they’re replacing a piece of infrastructure that’s been worn out over a number of years set by the state.
“But that doesn’t mean landlords aren’t using MCIs as a way to intimidate tenants,” said Levine, who said that his office is hearing reports from tenants in the district who feel MCIs are being used as a tool in the arsenal of deregulation. “There’s no doubt that landlords in some cases are overly aggressive in making capital improvements because they can pass the costs on to tenants who might not feel they even need whatever the improvements are. Why would a landlord do that? It can be tactic to price existing tenants out of the building. ”
In New York, once a rent regulated apartment is brought over the $2,500/month threshold, and is vacated, its regulated status is automatically revoked and the unit goes market rate. If the apartment is brought over the $2,500 threshold and the regulated tenant remains in the unit, a landlord can de-regulate the apartment by proving the tenants make over $200,000 a year.
Levine said he sees overly aggressive capital projects all the time, “which are only justified because the landlord wants to pass on the costs to tenants.”
“Unfortunately, this is going to be an escalating struggle,” said Levine. “The Upper West Side in general, and my district specifically, is caught in a vice of rising real estate values in a neighborhood with a huge number of rent stabilized units.”
Levine said his district is “ground zero for the struggle where landlords are trying to find ways to push people out, and MCIs are one tool they’re employing.”
Back at the Stonehenge tenants meeting, the question of whether to fight the boiler MCI in court wasn’t a difficult one, even though it’s going to cost rent regulated tenants about $9,500 in legal fees, according to Dorsey’s estimate.
“We can give our money to the tenants association [to fight the boiler MCI], or we can give it to Stonehenge,” said one rent regulated tenant who favored the fighting chance a court battle offers. “Either way, we’re going to pay.”
When the time came to vote, every hand went up.
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