Friday, March 28, 2008
Last night we had a meeting that brought together tenants from 17 buildings that were recently purchased by a some very evil people. (I do not want to mention their name so that my blog doesn't show up in a google search.) It turns out that the group that bought us, and 16 other unfortunate rental buildings in the East Village, are notorious for bad landlord behavior. In addition to making thousands of working-class New Yorkers miserable in their homes, they also have the honor of ripping off people they conned into buying their million dollar condos! (I tried to find a good link for this but their building facebook site is private).
We heard from representatives of neighborhood tenant organizations, a tenant coalition, community board representative, tenant association leaders, a woman who has been fighting her predator landlord and is the last one left in her building, and others. They painted a very scary picture of what our future holds.
What has been happened with at least 55,000 units is that private equity investors have been investing in "packages" of rental apartments where they project a 25%-30% return in 3 years or less. Wow, that sounds like a great investment considering I am getting 3% at my high-interest online savings bank.
So how do they do this? It's a long a complicated answer that has to do with securitizing debt, writing prospectuses, commercial mortgage-backed securities, collateralized mortgage obligations and other financial phrases that mean absolutely nothing to me.
What does mean something to me, is how they increase the value of the properties in order to pay out huge sums to their investors. They have 2 choices: flip the buildings quickly (that happened to us last year), or get higher rents by harassing tenants until they move, cheaply renovate the apartment and bring it out of rent stabilization so they can charge (and this is true) $2800 for a 400 square foot, 3 room, walk-up apartment.
Next you might ask, especially if you have never lived in New York, how might they harass you? If you pay your rent on time, have a legal lease and don't do anything wrong, what could they possibly do?
Here is a list of what we think we can expect over the course of the next year:
- The landlord "losing" our rent check
- Taking us to court over not paying the rent, even though we have paid (ie frivolous court cases)
- Improperly charging late fees and other fees and taking you to court when you don't pay
- Scattershot no heat or hot water (today it's no hot water; last week we had no heat)
- Filthy common areas for months on end
- Little to no cleaning services, garbage remaining til overflowing, rodents not dealt with etc.
- Broken front door locks and buzzers
- Don't make essential repairs
- Don't return phone calls
- There is speculation (this sounds sooo paranoid but I truly think it happens if they can't get tenants out by other means) that they have been known to do damage to the foundation to get the building condemned
If you would like to know more, here is a website that has documented their experience