Crown Heights, the neighborhood east of the Brooklyn Museum and the tranquil fields of Prospect Park, has the fastest rising rents of any community in Brooklyn. Trendy restaurants and boutiques, with names like the “Owl and Thistle General Store,” have accompanied the more affluent newcomers who are driving up rents. But for the neighborhood’s longtime residents, who are mostly African-American or Caribbean, the changes have attracted real estate and private equity companies that see an opportunity to make an enormous profit by driving tenants out of rent-stabilized apartments.
Some of those longtime residents are turning to the Crown Heights Tenant Union (CHTU), which started last fall as a group of about a dozen residents and community organizers and has since established a presence in dozens of buildings throughout the neighborhood, including 10 buildings where strong tenant associations have taken root.
When CHTU held a meeting in mid-July, almost 100 people, including representatives for a local state assemblyman and the city comptroller, crowded into a sterile, linoleum-floored room at a local nursing center. Those who couldn’t find a seat in one of the chairs arranged in a circle around the room leaned against the walls near the doorway.
As people introduced themselves, they called out their addresses: 740 Franklin Avenue, 410 Eastern Parkway, 15 Crown Street, 1115 President Street and so on around the room. While the addresses represented buildings spread throughout the neighborhood, the tenants all had similar concerns. They want to end the aggressive buy-outs, harassment and lack of services that they say are the result of landlords trying to evict rent-regulated tenants in order to bring in more affluent, higher-paying renters.
“I lived here for 53 years,” said Molly Hernandez, 73. “My children were born here, my grandchildren were born here and one of my great-grandchildren were all born at 1059 Union between Franklin and Bedford. So for me personally, they’re going to have to put me in handcuffs to get me out of the building.”
Predatory Equity
In June 2013, the private-equity real estate company BCB Property Management purchased Hernandez’s building for $8.2 million — far more than the $1,053,000 value the New York City Department of Finance (DOF) placed on the property. The DOF also estimated that the building’s net operating income, which is the money the landlord retains after operating costs, was only $180,714 per year. This is because most of the apartments in 1059 Union Street are rent-stabilized, meaning that BCB can raise the rent by only a limited percentage every year unless the unit is vacated.
Soon after BCB bought the building, tenants said the company started offering residents tens of thousands of dollars to move out of their apartments. For those who refused the buyouts, life in their homes became difficult. BCB started gutting the empty units, ripping out the walls and appliances and converting the one- and two-bedroom family units into three-bedroom, two-bathroom apartments that would go to young professionals and college students for three times the previous rent.
The Department of Buildings recorded 19 complaints by tenants since BCB bought the property, most of which are related to the renovations taking place in vacant apartments. Some of the complaints describe loud noises like jackhammering and pounding on the walls, signs of construction work taking place late in the evening. In one instance, plumbing work done during renovations caused a pipe to break and leak water into the apartment below.
Last fall, Hernandez and some of her fellow tenants at 1059 Union Street reached out to organizers at the Crown Heights Assembly, a tenant advocacy group started by veterans of Occupy Wall Street. Residents at 1059 Union subsequently formed a tenant association, which launched a 311 campaign that involved frequently calling the city’s non-emergency services number (311) and filing complaints for any violations they observed in the building. Eventually, the New York City Department of Housing Preservation and Development (HPD) took notice and sent agents to the building.
“I was calling 311 about anything that happened in the apartment,” said 29-year-old Nefertiti Macaulay, who turned down a $60,000 offer to leave the rent-regulated apartment that her family lived in for almost 50 years. “If lights didn’t work, the heat didn’t work, the floors were messed up, noise complaints. We would go to people’s apartments and say, ‘Here, call 311. Here’s my cell phone number. I’ll call for you.’”
The 311 campaign had some effect. This year, HPD admitted two of BCB’s properties, including 1059 Union Street, into its Alternative Enforcement Program, an exclusive list of the 200 “most distressed” residential properties in the city. However, CHTU members said that the extra scrutiny by HPD did little to curb the harassment from their landlord.
“HPD doesn’t seem to have the resources to enforce property law,” said Brianna Harris, a CHTU member who lives down the street from 1059 Union Street. “They’ll come to your building, they’ll inspect, they’ll put a stop-work order and then they don’t actually have the manpower to make sure that order is being enforced.”
Joining Forces
When the tenants at 1059 Union Street started making noise about the troubles with their landlord, residents in neighboring buildings took notice and created their own tenant associations, eventually joining forces and forming the Crown Heights Tenant Union.
“Going beyond the individual building and doing community organizing is an important breakthrough,” said Tom Angotti, author of New York for Sale: Community Planning Confronts Global Real Estate and professor of urban affairs at Hunter College. “That’s been a problem in tenant organizing, that buildings don’t talk to each other. You can’t deal with gentrification on a one-building basis.”
Harris first learned about the CHTU in February, when the group held its first rally outside 1059 Union Street in last winter’s frigid weather.
“My boyfriend was walking by when they were having a protest in front of the next building,” Harris said. “They are on our block. He found out they were bought by the same company and they were yelling about exactly what was happening to us.”
Harris’ building at 1115 Union Street was bought by BCB last September, around the same time that the company bought several properties on that block. In fact, the Urban Homesteading Assistance Board (UHAB), an organization that supports low-income co-ops in New York, has identified 14 BCB-owned properties in the neighborhood, all of which were purchased in the last two years.
However, BCB, which refused to comment for this article, is not the only company gobbling up rent-stabilized properties in Crown Heights. The tenant union has identified nine other real-estate companies that it says are aggressively pushing out the neighborhood’s longtime, rent-stabilized residents in order to move those units out of rent-regulation rolls.
One of those companies is Pinnacle Group, which bought more than 400 rent-stabilized apartment buildings in Upper Manhattan and the Bronx a decade ago. Pinnacle was later investigated by the New York attorney general’s office and forced to pay more than $1 million in restitution to overcharged tenants. It has also been sued by 22,000 of its tenants in a class-action lawsuit claiming the company had systematically harassed them and failed to comply with rent laws. That case remains tied up in court.
The Larger Housing Crisis
The issues raised by CHTU reflect a larger affordable housing crisis that is taking place across the five boroughs. The city is losing rent-regulated apartments faster than they are being added. From 1994 to 2012, the city lost 249,355 rent-stabilized units and added only 144,113, a net loss of 105,242 regulated housing units, according to a study by the Rent Guidelines Board (RGB), which determines the percentage that landlords can increase rents for rent-stabilized apartments.
While there are a variety of factors that contribute to losses in regulated housing, the RGB reported that rent increases brought on after rent-regulated tenants vacate their apartments accounted for the greatest reduction (63 percent) in regulated housing stock last year.
“It’s a pretty good bet that you can push out low-rent-paying tenants and get in higher-income tenants in Crown Heights,” said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development. “It’s not an ethical bet but it’s a pretty good bet. Landlords can either illegally or just-this-side-of-the-line of legal push out low-income paying tenants pretty regularly just by not making repairs or repeated aggressive buyouts or going after them for small things.”
Dulchin explained that when real-estate companies identify a neighborhood that is experiencing gentrification, they base their prices on how much revenue a building would bring in if it were occupied by higher-income tenants paying market-rate values instead of the residents who are already living in the building in rent-regulated units. They then pursue a strategy to drive out tenants living in rent-regulated apartments.
“I think the growth [of CHTU] speaks to the real crunch that people are feeling in the neighborhood around their rights being violated and their really strong desire to hang on to their homes,” said Cea Weaver, who works closely with the tenant union and is an assistant director at UHAB.
Overcoming Differences
Another feature distinctive of CHTU is its inclusiveness. Members come from almost every demographic in the neighborhood, encompassing both longtime residents and newcomers, which Angotti applauds.
“Historically, race has been a polarizing factor in the city,” Angotti said. “When people don’t talk to each other, there’s distrust. And landlords play that to their favor.”
Esteban Girón, who moved into an apartment at 951 Carroll Street last year, was upset to find out that he was paying $600 more than the previous tenants.
“I don’t think a lot of the new tenants realize that we’re just intermediaries,” he said at the July meeting. “We’re not expected to stay there forever. The landlords think that we’re in an economic bracket that’s able to get the rent from where it is right now to where it is deregulated.”
And while Girón’s building is owned by a smaller landlord than BCB and Pinnacle, public records show that the mortgage on his building comes from New York Community Bank, the 20th-largest bank holding company in the United States with $48.6 billion dollars in assets. On its website, the company boasts that it is “a leading producer of multi-family loans in New York City, with an emphasis on apartment buildings that feature below-market rents.”
UHAB has identified scores of buildings in Crown Heights that have multi-million-dollar mortgages from New York Community Bank.
“Banks are enabling landlords. We think it would be amazing if banks would just go and find out what the buildings’ incomes are before they lend money,” Weaver said. “Unfortunately, with incentives that favor banks who get as much money out the door as possible, it’s the kind of thing that doesn’t happen.”
Girón is currently battling his landlord in housing court. He claims that the renovations made to his apartment do not merit the 80 percent rent increase that occurred after the last tenant moved out. Girón has been withholding his rent since April to protest what he said is an illegal overcharge.
“If we’re able to beat our landlord with just our one little apartment, what that means for the [tenant union’s] ability to negotiate with landlords, that’s really the core of having something like the tenant union as opposed to a tenant organization that works just for your building,” Girón told The Indypendent. “Our hope is that by singling out our landlord, it will set a precedent for other people who want to question their rent history.”
CHTU’s work is starting to draw interest outside of Crown Heights. In Ridgewood, Queens, tenant organizer Raquel Pacheco and two others recently started the Ridgewood Tenants Union, which is looking to use the same grassroots, neighborhood-wide organizing model to build tenant power in a community recently hit by a wave of gentrification.
“One thing CHTU has done beautifully,” Pacheco said, “is bridge the gap between long-time residents and newer residents to work together toward a common goal, and that’s something we’d like to create in Ridgewood, too.”
Ambitious Plans
While organizing tenant associations, filing lawsuits and launching 311 campaigns are some of the Crown Heights Tenant Union’s accomplishments so far, organizers say that their ultimate goal is to force property owners in the neighborhood to sign a collective bargaining agreement that would put residents on an equal playing field with their landlords. Already, they have issued a list of demands that include a five-year rent freeze on all apartments, a right to timely repairs and a guarantee that any landlord-offered buyout must be worth at least five years’ rent at the apartment’s current market rate.
More than 400 Crown Heights residents have attended at least one tenant union meeting. This fall, the tenant union plans to hold its first tenant congress, where the group will collectively decide how to move forward now that the organization is growing larger and becoming more visible. One of the questions on the table is whether to organize a joint rent strike across the different buildings with tenant associations, which could force landlords to come to the table and negotiate.
“Unfortunately, the onus in New York City is on tenants to enforce rent-regulation laws themselves,” Weaver said. “The one thing that we hope comes from this is that landlords understand that they are not going to be able to manipulate the rent laws. If we can show the landlords through strong tenant organizing that it’s not possible for them to make their money back, hopefully we can influence their behavior.”
For more about the Crown Heights Tenant Union, see crownheightstenantunion.org.