Pressured to Move, Low-Income Tenants Resist Buyouts
Ian Marsh
Marcia McLean is a hard-working health-care professional who lives with her extended family in the same Crown Heights apartment that she's occupied for nearly 30 years. Her landlord had been trying to convince her to accept a cash buyout and relocate to another apartment the landlord would find for her in a less desirable neighborhood.
She refused the offer last year, but agreed to move out temporarily while her apartment was renovated. When she tried to move back in last October, the landlord had changed the lock, saying the repairs were yet to be done, she says.
McLean's story is extreme example of what has been a common practice among New York City landlords for decades. The practice of buying out tenants is a method for getting renters out of regulated apartments that rent for below-market rates in gentrifying neighborhoods. In McLean's building, newly renovated apartments rent for nearly $4,000 a month. She currently pays under $1,000.
In city that is rapidly gentrifying and where nearly 50 percent of rental housing units are rent-regulated, building owners have a powerful incentive to deregulate rent-stabilized apartments. Under rent-stabilization laws, if a tenant continuously occupies an apartment, an owner can only increase rents by a small percentage each year. But if an apartment is vacated or if the owner makes major improvements on it, the owner can raise the rent drastically. Once an apartment rents for over $2,500, it is no longer rent-stabilized and can be rented at market rate.
During the city's real-estate boom last decade, some firms invested in New York City rental housing solely with the intention of replacing rent-stabilized tenants. This proved more difficult than the firms anticipated, however, and many of these building went into foreclosure when modest rent rolls failed to provide enough income to pay off hefty mortgages.
http://m.bkbureau.org/brooklynbureau/db_325456/contentdetail.htm?contentguid=9X0C3YWF
