A Hip Young Couple Clears Out Low-Rent Tenants for its Television and Playroom Needs
In 2006, Dan Bailey and Felicity Loughrey, with the financial backing of another couple, purchased an eight-unit residential building in Prospect Heights for $860,000.
Loughrey is the New York correspondent for Vogue Australia, and her clip file includes interviews with celebrities like Chloë Sevigny, Halle Berry, Jake Gyllenhaal, and Peter Sarsgaard. She's also written profiles for the upscale photography magazine Black + White. She's penned articles on finding your fashion personality, poked fun at a class called "How to Marry Rich," and weighed in on housework and feminism. Bailey, her husband, is an estimator for Structure Tone, a Manhattan-based construction company with offices around the world. A birth announcement in The New York Observer for their youngest son, now two years old, referred to Bailey and Loughrey as an "Australian-American" couple in their early thirties.
The other owners of the building, Deanne Cheuk and Andre Wiesmayr, are also a married couple in their thirties; they live in a co-op on the Lower East Side that they purchased for $490,000 last year. Cheuk, an Aussie like Loughrey, has worked as the art director for Tokion, an arty magazine created by two American expats in Japan. She's been commissioned to do portraits for Deborah Harry, illustrated notebooks for Target, and publishes a graphic 'zine whose profits go to charity. Wiesmayr, her husband, is a creative designer for a Tokyo-based company that produces ironic T-shirts making fun of airlines' seat-back safety instructions. Reportedly, Brad Pitt is a fan. Wiesmayr is also the creator of BumRocks.com, a music website with a selection of streamable songs by obscure music you wish you'd heard of first.
All four of these young building owners are people with enviable talent and taste, the sort of creative types you'd expect to find in Brooklyn. Bailey and Loughrey no doubt felt right at home when they moved into the building at 533 Bergen and joined the renters who'd been living there for years—and then began kicking them out.
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Just as soon as Bailey and Loughrey can remove a few more of those tenants, the couple can move into the rest of the 20-room remodelled home they have planned for the building.
In May, The New York Times reported on a troubling sideshow in the endlessly inflating local real-estate market (which, financial crisis notwithstanding, shows little sign of abating): A real-estate executive named Alistair Economakis had purchased a building on the Lower East Side and was evicting all of its tenants to create one enormous, 11,000-square-foot residence for his family of four.
Bailey and Loughrey aren't entirely following the Economakis playbook in their smaller building: They only want to kick out the people paying low rents.
After the couple purchased the building (it remains unclear what their financial agreement is with Cheuk and Wiesmayr), they planned a $134,000, 3,500-square-foot renovation and began forcing out longtime residents. The only thing now standing between them and the realization of their dream home is one pesky rent-stabilized resident who won't leave. (They aren't chasing out the tenants in three higher-rent units.)
New York's rent regulations allow property owners to evict rent-stabilized tenants if the owners plan to move in. The landlord must live in a newly vacated apartment for at least three years or risk being penalized. But only in the past few years, affordable-housing advocates say, have landlords begun using that provision to clear out entire buildings. Some worry that's it's just the latest strategem of greed, that landlords taking advantage of the provision secretly plan to stay only for the three-year minimum before moving out and selling the property at a profit (and with no rent-stabilized units to hold the price down). But that doesn't appear to be the case at 533 Bergen. "These people are just hipsters who want their dream home," says Dave Powell, a tenant organizer at Brooklyn's Fifth Avenue Committee.
"Hipster landlords" is exactly what the couple has been labeled by activists and tenants who deride Bailey and Loughrey for their remodeling plans.
None of the four owners would speak for this article, but Bailey and Loughrey's lawyer, Jeffrey L. Goldman, says the two plan to do much of the renovating themselves—"sweat equity," he calls it—and believe that they're bettering the neighborhood. "Good people who do what they are doing, they shouldn't be the butt of the anger," Goldman says. "They are doing what is the American way. They came here, they work hard, they bought a piece of Brooklyn and are fixing it up—and they are the target of protests?" Goldman adds that what Bailey and Loughrey are doing with the building is "clearly not unethical, because it's legal."
Scott Miller, an attorney for two of the families who were forced out, sees it differently: "You're not cleaning up a drug-infested crack den. You're talking about working, middle-class people that came here and built a life for themselves. The Baileys—everybody, if they can afford to—should be able to live in a beautiful place. They obviously wanted more than they currently had—a bigger place—but at what expense? How can you justify the displacement of five families for one?"
One of those families is now all that remains in the way of Bailey and Loughery's goal. Evelyn Suarez lives in a first-floor apartment with her boyfriend, their 17-year-old son, and two nieces, ages eight and four. She moved in 28 years ago and raised four children in the apartment. Now, at the age of 51, she's on to the second round of kids: In addition to raising her two nieces, she is the daily babysitter for five grandchildren. "I'm comfortable here," Suarez says. "I don't want to move."
In 28 years, her rent has gone from only $97 a month to a still-astoundingly-low $402. The years of low rent have afforded her the ability to build a comfortable home on her income from babysitting and other off-the-books jobs. And it has also allowed her to stay home since she was diagnosed with colon cancer five years ago. She's in remission now, but remains unemployed. There isn't much privacy in Suarez's home—it's a railroad apartment with three bedrooms that open into one another—but it has a washer and dryer and two flat-screen televisions.
The new owners told Suarez that her lease wouldn't be renewed and then, when she refused to leave, began eviction proceedings and tried to raise her rent to $1,500 a month. According to plans filed with the Department of Buildings, her room is slated to become a storage room for Bailey and Loughrey's bicycles and strollers; the rooms occupied by her son and nieces would become a television and playroom for the couple's two young children.
"To me, they are breaking up a home," Suarez says. "It's just ridiculous. There are empty lots all over—why not go get a lot and build from scratch up? Why mess up a neighborly building where everyone was together and getting along? To me, they don't have a heart. They don't care about nobody. . . . Even if it was the other way around, I wouldn't have done it that way."
The first tenant to receive an eviction notice left without a fight, and Bailey and Loughrey moved into that vacated apartment in early 2007. Another tenant, Hector Gerena Jr., contested his eviction but eventually took a $12,000 buyout and moved in March. "The apartment meant a lot to me, because that's where my father had his dying days," he says. But his lawyer warned him that if he took the case to trial and lost, he would owe his landlords money for their legal fees. Two more families settled recently and agreed to move out in the coming months. Suarez is the last one standing.
With the help of Brent Meltzer, a lawyer at South Brooklyn Legal Services, Suarez has put up a fight for her $402-a-month apartment. They argued that Suarez was protected from eviction because she was disabled due to her bout with colon cancer. Rent regulations bar landlords from displacing disabled or elderly tenants unless they can provide an apartment of equivalent size and (impossibly, in this case) equivalent price in the same neighborhood. The stakes are high: If the court agrees that Suarez is protected as a disabled person, the landlords will either be forced to let her stay, or they will have to find her another three-bedroom apartment in Prospect Heights, where she will pay her current $402.50 rent and they will pay the difference.
The landlords' lawyers asked for an independent physical exam of Suarez, apparently to verify that part of her colon had been removed due to cancer. They also wanted years of medical records, employment records, Social Security documents, and contact information for all medical personnel who saw Suarez as a patient. (The landlord's lawyers eventually dropped the request for the independent exam.)
Meltzer countered with demands for documents to verify that the landlords were, in fact, planning to live in the house permanently and not just clearing out the building in order to sell it for a profit. He asked for five years of the landlords' bank statements and other financial documents, as well as information on the financial agreement between the four owners of the building, and medical evidence to back up Bailey and Loughrey's statement that the evictions were justified because "a doctor had suggested that their son needed more space."
The battle over 533 Bergen, meanwhile, has ignited interest from housing and neighborhood advocates. In August 2007, the Fifth Avenue Committee invited several elected officials to a block party outside the building. "This stuff usually happens in the dead of night, and we wanted to really broadcast it," explains Powell, the tenant organizer. "We wanted to say: 'Hey! This is happening in your neighborhood, and we don't find this socially acceptable.' "
State Senator Velmanette Montgomery and City Councilwoman Letitia James have denounced the landlords. James characterized them as part of an unwelcome trend of new homeowners who have little regard for Brooklyn's close-knit minority communities. "You can describe this generation as having an all-about-me attitude," she says now. "It seems excessive, and I don't understand why it's necessary that this family would want a palatial living arrangement in a neighborhood filled with rent-stabilized and rent-controlled tenants. It smacks of selfishness."
When a Brooklyn Rail reporter asked Suarez how she felt, she said: "Of course I'm angry. It's too much. Stuff like this is why people flip out and kill each other."
Online reports of the block party, however, resulted in considerable support for Bailey and Loughrey. Commenters at Brownstoner.com characterized Suarez and other rent-stabilized tenants as self-righteous beneficiaries of anachronistic rent laws. "I never had the luxury of rent stabilization when I rented. . . . Why do these folks get something that others don't?" wrote one. "To the renters: Buy your own damn house, and you have nothing to worry about next time," another commented. Others said the property owners were being unfairly vilified, and several more said they planned to vote against Councilwoman James for speaking out against the landlords. (The battle even expanded to Wikipedia, where an entry for Cheuk briefly featured a reference to the controversy before it was taken down.)
In May, Meltzer attempted to videotape a deposition of Bailey and Loughrey, but the two refused to answer questions on-camera; their attorney filed a motion to block the videotaped deposition, calling it "psychological warfare," and referred to Suarez's comment in the Brooklyn Rail as "public threats of bodily harm" and the Wikipedia material as vandalism meant to intimidate Cheuk. Goldman tells the Voice that his clients were afraid a videotaped deposition would end up on YouTube.
In response, Meltzer labeled Bailey and Loughrey's claim of feeling physically intimidated ridiculous and claimed that they must live in a "paranoid, delusional world."
A Housing Court judge sided with Bailey and Loughrey last month, telling Meltzer to put the video camera away. Goldman was happy with that decision, and says he hopes the Suarez case will be heard by the court before the end of the year.
Meanwhile, the tenants in the Economakis building on the Lower East Side have challenged the owner-occupancy provision, arguing that it was never meant to empower landlords to convert entire buildings into single-family mansions. But in June, an Appeals Court decision came down in favor of the landlord, declaring that restrictions on the number of units an owner can "recover" is an issue for the state legislature to address, not the courts.
Assemblymen Richard Gottfried and Vito Lopez have both sponsored bills that would restrict or abolish the ability of owners to take over rent-stabilized units for their personal use. Gottfried, who supports the complete abolition of the owner-occupancy provision, notes: "People who have the financial resources to own apartment buildings will almost always have many more housing options available to them than long-term rent-regulated tenants." Those bills have little chance of becoming law, however, unless November brings a Democratic majority to the Republican-controlled state senate.
In the meantime, Miller believes the Economakis ruling could encourage more property owners to clear out affordable units in Brooklyn's trendy neighborhoods. "All the owner has to do is live there for three years, and then he or she has complied with their requirement. Then you have a mansion in Brooklyn Heights to sell, which is a lot more valuable than a rent-stabilized building," Miller says. "I can look out my window and see all these brownstones and small apartment buildings that could be converted. What landlord now wouldn't want to try to make a profit? It's terrible, because you are talking about the heart and soul of the working class of New York."
Meanwhile, Suarez and her family continue to share their uneasy co-existence with Bailey and Loughrey, who live just upstairs.
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