An explosive new study released by the housing watchdog group, the Housing Rights Initiative (HRI) reveals that many landlords across the city allegedly lied about rent-regulated apartments in their buildings, and still got approvals from the city’s Department of Buildings.
The New York Times first reported on this study, as part of a profile on the founder of HRI, Aaron Carr. HRI’s study looked at construction permits filed between January 2016 and June 2018, and then compared this with publicly available data at the city’s Department of Finance. In over 10,000 permits, landlords failed to mention that they had rent-regulated apartments in their buildings, and the DOB still went ahead and approved these permits.
HRI had the support of City Council member Ritchie Torres in his role as the chair of the City Council’s Oversight and Investigations Committee. Torres has now introduced legislation in the City Council that seeks to rectify this problem. The bill calls for the DOB and the finance department to work together to identify false statements by landlords that might be unlawful. If a landlord is found to have falsified information about any particular building, the bill asks that the DOB then examine the landlord’s entire portfolio of properties for false statements.
The bill also asks that the DOB audit 25 percent of the buildings placed on a compliance watch list to check if any false statements have been made, and if that is the case, the DOB should send written notice to the City Council, the Department of Investigation, the State’s Division of Housing & Community Renewal, the State tenant protection unit and also refer the matter to the District Attorney of the county where the property is located and state Attorney General.
HRI and Torres released their report on the steps of the Kushner Company Headquarters at 666 Fifth Avenue today. In March this year, HRI published another investigation that showed that the Kushner Companies had failed to mention rent-regulated apartments in building permits spanning a three-year period, and concerning 34 of its properties.
A spokesperson for the city’s Department of Buildings told the Times that the 10,000 permits HRI was referring to only accounted for three percent of the permits issued by the agency over the two-year period, and that the city has been working rigorously with the city-state Tenant Harassment Prevention Task Force to bring unscrupulous landlords to task. In addition, the city is also hiring 70 new building inspectors to up its enforcement levels.
In further comments to Curbed, the DOB spokesperson explained that said that the agency thoroughly reviews and audits permit applications to protect tenants, regardless of whether the landlord checks the rent-regulation box on the forms. The spokesperson also said that in some previous cases flagged by HRI, the landlords had submitted tenant protection plans separate from the permit applications.
The DOB spokesperson also pointed to the agency’s efforts so far: between fiscal year 2016 and 2018, the DOB has issued 800 violations for false filings; and since 2017, the agency and the Tenant Harassment Prevention Task Force have conducted 1,600 tenant-safety inspections and issued more than 1,100 violations.
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HRI’s study primarily concerns landlords who are receiving the J-51 tax abatement; this program gives tax breaks to landlords who make improvements to their buildings in regards to new boilers, or roofs, or elevators, as long as they maintain the rent-regulated apartments in their buildings. To this effect, HRI has also connected tenants with law firms, and in one instance last year, four class action lawsuits were filed against three NYC landlords who allegedly abused the J-51 program.