The New York Supreme Court ruled in favor of tenants at 90 West Street who sued their landlord after their rents were substantially raised, even though their apartments were stabilized through 421(g). In August 2016, Public Advocate James, along with 37 elected officials, filed an amicus brief in support of the tenants who were forced to pay unfair rent increases by their landlord on their rent stabilized apartments. The judge ruled that the tenants will maintain their rent stabilized status and a referee will be appointed to determine damages.
This is the second lawsuit involving 421(g) that tenants have won this month to protect all units of affordable housing that received the 421(g) tax abatement. On July 3, the New York Supreme Court ruled in favor of tenants at 50 Murray Street who also sued their landlord when rents were substantially raised despite being stabilized through 421(g).
“Once again, the courts have spoken up and made clear that landlords cannot manipulate laws to take advantage of tenants,” said Public Advocate Letitia James. “421(g) was implemented to create much needed affordable housing, not strip it from the very New Yorkers who depend on it. We will always stand by our tenants, and will continue to use every tool at our disposal to support them in the face of unscrupulous landlords.”
421(g) is a portion of the New York State Real Property Tax Law that was enacted in 1995, aimed at revitalizing lower Manhattan. At a time when nearly a quarter of the area’s building space was vacant, it imposed a series of tax abatements, energy rebates, and financial incentives to convert commercial buildings to residential use that were explicitly subject to rent stabilization laws. Today, thousands of units are rent stabilized as a result of 421(g), all in lower Manhattan.
The landlord at 90 West Street claimed that the benefit did not require that the units be rent stabilized. However, the ruling asserts that both the statute’s plain language and the complete legislative history indicate that buildings receiving 421(g) benefits must be subject to rent stabilization.
“The latest decision from the Hon. Supreme Court Justice Reed reaffirms that the 421-g statute is clear and unambiguous in requiring rent stabilization protection for all tenants in buildings receiving generous benefits under the program,” said Serge Joseph, partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP, plaintiffs’ attorneys. “Furthermore, the decision debunks the argument that the Giuliani/Bruno private correspondence constitutes official legislative history. It also rejects Giuliani/Bruno’s brazen attempt to manipulate the meaning of the law to further enrich real estate developers from the public coffers.”
“I commend Public Advocate Letitia James on the efforts to bring justice to the tenants at 90 West Street who were previously denied their rightful rent stabilization benefits,” said Rep. Adriano Espaillat. “Preserving affordable housing for New York residents is a priority and a necessity for keeping low- and middle-income residents in their homes. The law is the law, landlords must not illegally deregulate apartments, especially after taking advantage of publicly-funded tax breaks. This ruling is a victory for all tenants.”
“I was very encouraged to hear that the trial court ruled in favor of the tenants of 90 West Street,” said State Senator Tony Avella. “These types of tax abatement programs were implemented so that we can maintain affordable housing in the City of New York. We need to make sure that this goal is actually met and that we are not merely giving away millions of dollars to developers for promises they have no intention of keeping. This ruling is not only a win for the tenants at this one development but also for affordable housing units throughout New York City.”
“Vindication for the tenants at 90 West Street holds meaning for all tenants impacted by the present housing crisis,” said State Senator Jesse Hamilton. “This victory means that landlords must uphold their end of the 421(g) bargain. Every rent stabilized apartment plays a role in keeping our communities whole. I appreciate the leadership of Public Advocate Letitia James in spearheading the amicus brief in support of tenants many colleagues at both State and City levels joined. It is in keeping with advocacy across government and in the courts to ensure that all tenants receive fair treatment and landlords are appropriately held to their promises.”
“Every unit of affordable housing in New York City represents the chance for a family to continue to make their life here,” said State Senator Liz Krueger. “So when unscrupulous landlords try to pull the rug out from under their tenants by denying them their rent stabilization rights, the government must step in to defend them. I’m very pleased at the State Supreme Court’s decision in favor of the tenants at 90 West Street, and I thank Public Advocate James for her leadership on this issue.”
“I am proud to join my colleagues in seeking justice for tenants throughout New York City,” said State Senator Kevin Parker. “This ruling sends a clear message to landlords throughout New York City that not only do they have to honor the benefits through 421(g), that elected officials such as myself and others will continue to stand by our constituents and advocate on their behalf.”
“We must ensure we put all the mechanisms available in place to protect rent stabilized tenants in the City,” said State Senator Jose Peralta. “At a time when affordable housing is scarce, we must work hard to prevent landlords from taking advantage of tax benefits and not giving anything back in return to help tenants. I will fight tirelessly to protect tenants and make sure affordable housing is just that, affordable. It is great to know the New York Supreme Court agreed with the tenants of this specific building.”
“I commend the efforts of the office of Public Advocate Letitia James for providing the tenants of 90 West Street with critical support as they sued their reckless landlord,” said State Senator Gustavo Rivera. “The New York State Supreme Court ruling represents a crucial victory that will go a long way in holding landlords who are taking advantage of generous tax break programs, such as 421(g), accountable for trying to destabilize the rent regulated units, and in doing so, continue jeopardizing our City's affordable housing stock.”
“Yet again, a court has ruled that Lower Manhattan's tenants can't have their rightful affordability stripped,” said State Senator Daniel Squadron. “421(g) was a promise made to the community, and that promise must be kept. Thank you to Public Advocate James, the tenants of 90 West Street, and my colleagues.”
“In exchange for a landlord receiving a 421(g) tax break, the tenants are protected by Rent Stabilization for the life of that tax break,” said Assembly Member Richard N. Gottfried. “Along with advocates for tenants and affordable housing all across New York City, I am gratified that Public Advocate Letitia James pressed this case to a successful conclusion. The New York State Supreme Court’s ruling should serve as a warning to unscrupulous building owners: disregard the laws protecting Rent Stabilization, and you will be caught and punished.”
“I am thrilled that the New York Supreme Court has ruled in favor of the tenants at 90 West Street, and taken a bold step towards a more affordable New York for all,” said Assemblymember Walter T. Mosley. “As the cost of living continues to rise, it is important that we stay vigilant and protect affordable housing. I thank Public Advocate Letitia James and everyone who assisted in this case.”
“This victory demonstrates our City’s unyielding commitment towards keeping crooked landlords accountable and protecting vulnerable tenants,” said Council Member Margaret S. Chin. “After joining an amicus brief with my elected colleagues to challenge the wrongful deregulation of rent-stabilized units at 90 West Street, I thank the New York State Supreme Court for making the right decision to rule against the landlord, and award the tenants the back-rent they deserve. Programs like 421(g) are instrumental in keeping our housing truly affordable, and I thank Public Advocate James for leading the fight to preserve them.”
“I celebrate the New York State Supreme Court's ruling in favor of these tenants,” said Council Member Daniel Dromm. “It sends a loud and clear message that exploitation of the law and hardworking tenants will not be tolerated in New York. I will continue to work alongside Public Advocate James to protect and expand housing rights for all those who call our city home.”
“New York City's housing crisis is harming our City one family at a time,” said Council Member Ben Kallos. “This case was clear from the beginning: greedy landlords trying to double dip and cheat the system by cashing in on luxury deregulation exclusions while at the same time getting tax breaks for rent controlled units. The law is clear and it must be followed. Thank you to Tish James for being the advocate and attorney for millions of rent regulated New Yorkers who now more than ever need vigorous, committed defenders.”
“This is a well-deserved victory for the tenants at 90 West Street,” said Council Member Jumaane D. Williams, Chair Committee on Housing and Buildings. “I also commend Public Advocate James on her attention and work on this issue. This tax abatement 421(g), which costs the City billions of dollars, has been touted as an affordable housing program. Therefore, the developers who benefit because of this incentive have an obligation to hold up their end of the bargain, which is providing stabilized rents to all tenants. It’s the City’s responsibility to ensure there are safeguards in place and investigations conducted to guarantee they hold up their side of the deal. Again, I commend the Public Advocate for taking action on this issue and making sure recipients of this massive tax break are in compliance.”