For years, the Mirabal Sisters Cultural and Community Center has led workshops to teach local tenants to organize and take landlords to court for harassment. But at a convention last week, the usual presentations on tenants’ rights and navigating city agencies took on new urgency.
As the financial crisis moves north from Wall Street to West Harlem and Washington Heights, Garrett Wright of the Urban Justice Center reminded attendees of the tactics landlords used to replace lower-income tenants with “white, yuppie residents” during the housing market’s peak in the last few years, such as neglecting repairs and attempting to evict rent-stabilized tenants.
Activists told tenants to brace themselves for more of the frivolous lawsuits and harassment experienced during the housing boom. Landlords are beginning to default on loans they took out to purchase their buildings, and today, unlike in recent years, “they really need the money,” organizer Rolando Rodriguez said.
Politicians say parts of Congress’ banking rescue plan should protect tenants from the potential abuses of the corporations that own their buildings. The firms say they are not in the business of pressuring tenants out of rent-stabilized units, even as the financial crisis creates new strains.
But locals are still preparing for the worst, spurred by a recent report from the Association for Neighborhood and Housing Development. Starting in 2006, companies backed by Wall Street investors began using similar risk-packaging tactics to those used by sub-prime mortgage lenders to purchase 90,000 rent-stabilized units across the city, about 10 percent of the apartments in the city’s rent stabilization program, according to the report.
Many of these apartments are in Washington Heights and West Harlem.
In order to pay back Wall Street investors, landlords had to make between 15 and 20 percent profits on rent-stabilized buildings that typically net between 5 and 10 percent profits each year, the report stated.
Securities and Exchange Commission filings obtained by ANHD show that Vantage Properties, the owner of the Savoy Park complex at 139th Street and Malcolm X Boulevard, stated that it anticipated income increases of nearly 150 percent, from $7.4 million to $19 million.
To increase profits, the report stated, many of these new property-holding firms looked to cycle long-term tenants out more quickly, since rents for stabilized units can be substantially increased once they are vacated and renovated. State law holds that when rents hit $2,000 per month, apartments can be taken out of the rent-stabilized program or deregulated.
“To have a 30 percent rate of turnover, something remarkable has to happen,” Benjamin Dulchin, ANHD’s director of neighborhood and citywide organizing, said. “What’s been happening is systematic harassment ... it’s a landlord buying a building and suing half the building for nonsense.”
Neil Rubler, the head of Vantage, said in an interview with the New York Observer, “It’s never a part of our business plan to deregulate apartments.” He said Vantage relies on the natural turnover of apartments and renovations to make profits.
But Vantage is now listed on the “watchlist” of Trepp, a financial service data company, along with several other companies that will not be able to pay off creditors within several months.
A spokesperson for Vantage declined to comment.
At the Mirabal Sisters convention, Dulchin announced to tenants that they should view landlords’ defaulting as “a victory” for tenant advocates, but he also warned that if banks do not renegotiate the terms of their landlords’ loans, buildings may be sold to what he called “some other tier of bad actor landlords who will still have an over-financed building on their hands.”
“They’ll still need to harass people,” he said.
Belgis Aristy, a low-income renter of an apartment in Manhattanville for 32 years, knows firsthand what this means. She said her landlord, Vantage, claimed that her home wasn’t her primary residence and took her to court. She was able to ward off the claim, but since then, requests for repairs in her apartment have not been granted.
But increased harassment may not be the product of landlords’ debt, no matter who owns the properties. Congress member Charles Rangel (D-Harlem) said in a statement that the $700 billion rescue plan for Wall Street banks included a provision that will ensure that banks and bankruptcy courts do not use the credit crisis as an excuse to raise rents to pay off their debt.
“This should give a sigh of relief for those who live in apartment complexes like the Riverton and Savoy Park, where there is a very real possibility of the landlord defaulting on overpriced mortgages,” Rangel said in the statement.
For some, though, the bailout won’t be enough. State Senator Bill Perkins (D-Harlem) said congress members “didn’t look at the real world that a lot of them represent. There was no inclusion of the needs of people that were victimized.”
news@columbiaspectator.com
