Warning: Gentrification in Progress

A Case Study in Displacement on Elizabeth Street

While Gillian Jabin says she's happy with the move she made to a downtown apartment on Elizabeth Street, she finds one thing troubling. After living there for nearly a year, she still gets letters meant for the tenant who lived in the apartment before she moved in last September.

"I know she was a woman and she was on welfare," says Jabin, a soft-spoken 23-year-old ballet dancer and model who shares the $2300 two-bedroom with a roommate. "I know because I get all her food stamps. It feels kind of funny. I never even saw a food stamp before."

Usually, getting an old tenant's mail is no more than an annoyance. But to Jabin, it is a telling detail, and an uneasy reminder of what she calls the turmoil that long-term tenants at 166 Elizabeth Street have endured and are still undergoing so that the landlord can make room for higher-paying renters like herself.

The effort to vacate rent-regulated apartments is being replicated throughout this downtown neighborhood, and across the city. In Washington Heights and Fort Greene, Long Island City and Bed-Stuy, tenants are organizing to fight displacement. Squeezed by a hyper economy that is brutal even in its shrunken state, working-class renters are being replaced by the latest generation of affluent, twentysomething newcomers. Thousands of rent-regulated units are being converted to market-rate apartments, lost forever as affordable housing. No one keeps track of how many units are deregulated, or where displaced people go, so the dimensions of the problem are not measured. But the effects are plainly visible at 166 Elizabeth.

For decades, the 22-unit, six-story walk-up has been home to poor and working-class tenants, mostly Chinese and Latino. But in March 2000, seizing on the frenetic real estate market that has turned Chinatown and Little Italy into Nolita, an amazingly young landlord bought the property. For more than a year, 24-year-old novice landlord Benjamin Shaoul has been turning the century-old building from a hard-used, low-rent tenement into a hip, high-end rental. Even spaces like Jabin's, which she describes as "no bigger than a dime," cost more in one year than the median annual household income of most city renters.

The resulting contrasts are astounding. On the top floor of Shaoul's building, for instance, the rent-controlled apartment of Petra Otero, whose family has lived there for three decades, costs $138.12 a month. Twenty-five feet down the hall is Joseph "Jay" King's penthouse, one of two that Shaoul created by tearing through the ceilings of vacant top-floor apartments and constructing living areas on the building's roof. King's rent? About $3000 a month.

While a unit like King's or Jabin's is graced with polished granite tiles and new appliances, a typical unit occupied by Chinese immigrants features an old stove and refrigerator sitting on a slanting floor where bare wood peeks through mismatched linoleum. Bunk beds are crowded into small bedrooms. Rent is about $800 a month.

Remarkable as the differences are, Shaoul's tenants have two things in common: They are, by and large, new to New York City. And they are all victims of the housing shortage, though it affects the new and old in profoundly different ways. Some tenants who pay thousands a month are still in walk-up apartments too small even for bathtubs. And long-term renters, forced to cram into apartments for lack of affordable options, risk eviction for doing so.

Indeed, Shaoul has sued nine of the building's 11 Chinese tenants, alleging in seven cases that they are running rooming houses in their apartments and profiteering off the enterprise—charges that they all deny. Two others are being sued for non-payment of rent and say they won't pay until Shaoul makes improvements. Both sides are in court, and Shaoul faces a July 6 court date to show Judge Margaret Parisi McGowan that he has made repairs.

Besides suing to evict tenants, Shaoul has also rid the building of some low-rent occupants by paying them to leave. That was the case with Maria Perez, who had been paying $400 a month to live in the apartment where Jabin now pays nearly six times as much. Sources say Shaoul paid Perez $7500—an amount he'll recoup from Jabin's rent in less than four months. Neighbors are not sure where Perez and her family have gone. Some say she's in Santo Domingo, others say the Bronx.

In paying tenants to leave apartments and pursuing so many court actions, Shaoul is simply taking advantage of the ordinary resources landlords use to clear out a building. But tenants say he has also used extraordinary means. Otero says that Shaoul has harassed her by strolling into her apartment when her door is ajar, turning down the TV, and demanding they discuss a buy-out. She has repeatedly refused his offers. Otero believes that the landlord reported her to state child-abuse officials, who told her they were investigating a claim that her two children were in danger because of drug use in the household. Otero's brother, who lives with her, does have a five-year-old drug conviction, but she says he is tested for drugs every week in a rehab program, and is consistently drug-free. Sources say a final determination in the case is imminent.

Two floors below, DeFang Wang, a 37-year-old construction worker who has lived in the building since 1995, said through an interpreter that last summer the landlord called police when Wang's wife left their children with an older cousin while she bought take-out food—a necessity, since the building's gas had been off for more than a month. Several Chinese tenants say Shaoul has come to their apartments demanding to see identification. As they produced their wallets, they say, Shaoul snatched them and searched for IDs. And one former commercial tenant, Benjamin Liepelt, alleged in court papers that Shaoul threatened that unless Liepelt vacated his space, he would "hire 'rogue cops' to rid the building of its illegal tenants." Although Liepelt appears to have been a legal tenant, he has moved out.

Shaoul declined to answer a lengthy list of questions the Voice faxed him at his request. In response, Shaoul wrote, "Unfortunately, on advice of counsel, I am unable to respond . . . due to pending litigation."

New tenant King says Shaoul is a "great landlord" who's improving the neighborhood. "He's fair, very ambitious, very accessible to us," King says. Jabin calls Shaoul "nice" and is pleased that he is not hiking her rent on her upcoming lease. Old tenants, however, don't share that feeling.

"The landlord is looking to kick people out of poor neighborhoods, and it's easy for them to find reasons," says Wang. "The rents are high and wages low, so a lot of people are facing a crisis." Li Jian Yang, whom Shaoul is trying to evict, suspects Shaoul is not suing the tenants for economic gain: "The landlord wants us out because he's racist and wants to earn more money," says Yang. "It's not fair. We've been here a long time, and this is our home."

In fact, tenants say that at a court date, Shaoul made an explicitly racist comment to an Asian housing organizer that led to a neighborhood-wide campaign against the young landlord. "I don't have anything against Chinese people," Shaoul allegedly told Rosie Wong from the University Settlement, which has assisted many of the tenants. "I just don't want so many of them in my building."

Shortly thereafter, posters with Shaoul's picture and the quote were taped to walls, lampposts, and doors around the Lower East Side. Several community groups, including the Good Old Lower East Side, the Cooper Square Committee, and Community Board 3, wrote letters to local politicians asking them to help the tenants at risk for displacement.

Jay King appears to be the kind of tenant Shaoul does want in his building. The Southern-born 31-year-old, who describes himself as a "money manager for myself," moved to his Elizabeth Street penthouse five months ago after a decade in Europe, followed by a brief stint on Mulberry near Houston. "This neighborhood is much better, much more quiet, much more real," says King, "at least as I interpret reality."

King's comfort in the building is obvious. "I like this very much," says King, clearly pleased as he sits in his chicly styled space, a computer set off by the tenement's now exposed brick walls. Delicate linen curtains hang from pewter fixtures. A spiral staircase leads to a rooftop bedroom. "This was exactly what I was looking for. It's very functional and has beauty." King calls the rent "a good deal."

Why? Because, aesthetics aside, this slice of downtown is the place to be. "I like that this neighborhood is in flux and that you can see that it's changing," says King, who shares the apartment with his girlfriend. "You've got cool Nolita kids and Soho combined with Little Italy and Chinatown all right here. This is a crossroads."

King has made friends within the building. Three of the four apartments on his floor are occupied by what he calls "new-income transplants." His next-door neighbor, who has the other penthouse, is "very, very successful in the Internet business, very interesting, very affluent. We're certainly friendly among ourselves. But we certainly don't socialize among the lower floors," where long-term tenants live. "The mix in the building doesn't bother me. I mean, the Orientals we have here are very clean. They certainly don't party hard at night."

Perhaps that's because many of them work at night in restaurants, or long hours in construction or sweatshops. Most of the Asian tenants of 166 Elizabeth are Fuzhounese men in their forties, and they are among the city's newest and poorest immigrants. When they moved into 166 Elizabeth, the landlord was Tsang Realty, whose owner "never cared who lived here or how many people, so long as he could collect the rent," says Wang.

That casual relationship ended when Shaoul bought the building in March 2000. In June of that year, seven Asian tenants got notices charging them with running rooming houses for up to eight boarders and charging them more rent than they themselves paid. Stop or be evicted, Shaoul warned. Tenants consulted with the Committee Against Asian American Violence, and organized to fight the evictions. In September, Shaoul filed suits against the seven tenants.

There's no denying that the apartments of the Asian tenants are crowded: In one, a single toothbrush rack holds six brushes, and six facecloths line the wall, each hung on a nail. Beds are stacked two- and three-high. Seating space in the kitchen is supplemented with stools and milk crates.

Yang, a 45-year-old restaurant worker who came to New York from China in 1990 and has lived in the building for seven years, lives in just such an apartment, and Shaoul's lawsuit against him is typical of the landlord's charges against other Chinese tenants. Yang pays rent—he says it is $772 a month for two bedrooms—in his own name, even though he is not the leaseholder. The apartment is leased by Zhen Shuan Guo, and Shaoul has sued both men, alleging that Guo has moved out and was charging Yang and five other borders to live there. In addition, Shaoul's suit claims that having more than one roommate who is not an immediate family member violates the lease.

In court papers, Yang argues that for years Tsang Realty accepted his rent checks, which he says acknowledged him as a legal tenant, and that Shaoul is now obliged to do the same. Haeyoung Yoon, a staff attorney at MFY Legal Services who represents Yang and several other tenants, acknowledges that Guo has moved out, but insists that Shaoul's charges that Guo is profiting off the tenants "is absolutely not true." Instead, she says that Yang and other tenants meet the state's standard of a nontraditional family because they have interdependent financial and emotional commitments, giving them rights to succeed Guo in the apartment.

"They share the rent, the food, all the expenses," says Yoon. "It's very consistent among the tenants. The rents are about $750 to $800, and it comes to about $150 per person." Yoon says that Chinese tenants in other apartments have similar arrangements.

New York law more commonly grants succession rights to spouses, children, parents, stepchildren, stepparents, brothers, sisters, grandparents, grandchildren, parents-in-law, and children-in-law who have lived in the apartment for two years prior to the original tenant leaving. Yoon says her clients are relying on a Fuzhounese definition of family. "What's really unique is that they're all from the same province within Fuzhou and they see each other as brothers and sisters," says Yoon. "It's a nontraditional family. When you ask them, 'Why do you consider your cousin a sister?' they'll say, 'Well, because she's my sister.' It's about the closeness of family ties here and in Fuzhou; it's a very cultural thing." All the eviction cases are pending but one, which is being settled.

Just as Shaoul's rooming-house suits against the Asian tenants are almost identical, the tenants' responses end in a standard way: They recite the fact that Shaoul has brought such cases against seven of 11 Asian tenants, but has instead offered to pay Latino tenants to move. Further, they say, he has thus far rented only to white tenants, and claim he is violating city, state, and federal human rights laws.

Late last year, 12 Shaoul tenants, including Chinese and Latinos, brought three separate suits against him in housing court, alleging a range of housing-code violations including sagging floors, water leaks, falling plaster, and moldy walls. Their main complaint, however, was that the building had no cooking gas after a fire broke out in July.

By November, Shaoul restored the gas for all but one tenant (whose service was restored in December) and agreed to make repairs. Much of the work has been done, but tenants say some items remain. Two of the remaining Latino tenants have joined two of the Chinese tenants in withholding rent while awaiting repairs. Yoon is working with Shaoul to get him to offer the old tenants something he gave to the new ones, rent rebates for the months without gas.

The protracted litigation seems to have taken a financial toll on Shaoul, whose family runs an antiques business on Broadway. This spring, the Dime Savings Bank sued his firm for failing to pay the monthly $10,675 note on his $1,050,000 mortgage. On March 26, the case was discontinued, presumably because Shaoul paid. In November 2000, and again in March 2001, Shaoul's own landlord at 80 Madison Avenue sued him for back rent (about $1900 a month) but managers there say he is currently paid up.

Despite the rancor between the landlord and the long-term tenants, relationships between them and the newcomers are cordial, at least superficially. "The Chinese people are always very polite," says Alena Slamova, who shares the apartment with King. "Even though they live on the floors beneath us, they help me to carry my laundry up all the way to the top." King himself says that he feels no "residual hostility" from his neighbors. "They may feel forced out, but I don't see it. Everybody makes an effort to say hello.

"This is really about the law of supply and demand," King says. "I don't think living in Manhattan is for everyone. I'm sure there's loads of upcoming young stockbrokers and lawyers who travel an hour or more to get to Manhattan. What keeps lower-wage workers from that kind of commute?"

Gillian Jabin's feelings are more conflicted. A housing dilemma brought her to Shaoul's building: She lost a $400 illegal sublet on Ludlow Street, then had to pay a $4000 finder's fee for the Elizabeth Street apartment that she calls overpriced and says makes her feel claustrophobic. That has helped her to appreciate the plight some of her neighbors face. "I've been inside some of the Chinese people's apartments, and they're crowded, but running rooming houses? I don't know what he means," she says. "But I do feel bad that they're losing their homes, and that all of New York is becoming a city of 20- or 30-year-olds, full of dotcommers."

As for the food stamps that come for Maria Perez, she says, "I just don't know what to do with them. I put them on the ground floor and hope maybe some of her old neighbors know where she's gone."

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