Blackstone loses rent dispute at Manhattan’s biggest apartment complex

Tenants living in Manhattan, New York’s largest apartment complex, Stuyvesant Town-Peter Cooper Village, won a battle to keep their rents insulated from potentially sharp increases, after a judge ruled last week against their landlord, the Wall Street private equity firm Blackstone.

The company is the largest owner of commercial real estate in the world and has lately been expanding into rental housing. Blackstone bought the apartment complex in 2015 for about US$5.4 billion in a deal that was praised by local politicians because of promises that nearly half the 11,200 units would remain affordable to middle-class families.

The legal dispute centred on whether other units at the complex, roughly 6,000, should also remain rent-stabilised. Rents in such units can only go up by set amounts every year, and renters have a right to renew their leases.

The new ruling was the latest development in the turbulent history of the complex, a group of 110 plain red brick buildings built across 80 acres (32 hectares) in the 1940s as middle-class homes that has since become an emblem of many of New York City’s most high-profile housing disputes.

The apartments at issue in the case had been set to lose rent stabilisation in July 2020. But citing new tenant-friendly laws passed by the state in 2019, a group of tenants and the Stuyvesant Town-Peter Cooper Village Tenant Association filed a lawsuit in March 2020, arguing that their homes should instead remain rent-stabilised.

Blackstone argued that the provisions of a 2013 settlement stemming from a prior case should allow it to deregulate the apartments beginning in July 2020. It argued the state laws did not supersede that settlement. But in a ruling dated Jan 4, Justice Robert Reed of New York State Supreme Court in Manhattan sided with the tenants.

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Susan Steinberg, president of the tenants association, said on Friday (Jan 6) that “thousands of our neighbours can plan on staying in their homes, protected by rent regulation”.

A Blackstone spokesperson did not say whether the firm planned to appeal but said it had “invested more than US$300 million into the property” and “materially improved service levels”, as well as kept 5,000 homes not impacted by the ruling restricted to lower-income tenants.

“Our commitment to residents is unchanged,” the spokesperson said. She noted that Blackstone had not issued any rent increases “above those legally allowed under rent stabilisation”. NYTIMES