Crown Heights Landlord Is Taking Tenants to Court in Attempt to Drastically Raise Their Rent

Residents of two Crown Heights apartment buildings say they’re being unfairly sued by their new landlords in an attempt to increase rent costs and, in two cases, force tenants to withdraw building complaints filed with the state.

Renaissance Realty bought 285 Schenectady Avenue and 1646 Union Street in Crown Heights in early 2014 and is currently suing twelve tenants for failing to sign new leases requiring them to pay drastically higher rent. Meanwhile, tenants are responding that their apartments are barely worth living in — let alone worth, in some cases, more than twice their current monthly rent. Seven of the tenants facing legal action have filed grievances with the New York State Department of Housing and Community Renewal, demanding rent reductions because of issues like leaking ceilings and rodent problems.

“I was paying $962 a month and the new landlord takes over and he wants me to pay $2,020 a month for the one bedroom,” says Betsy Brown, a 28-year resident of 285 Schenectady. “I don’t think that’s right, so I don’t sign the lease and he takes me to court. I think they want to kick us out. Where am I going to go?”

At the heart of the issue is a complex debate over “preferential rents,” or rates for rent-stabilized apartments that are cheaper than they legally have to be, and old affordable-housing promises made by prior landlords.

The New York City Rent Guidelines Board dictates maximum rent increases each year. But landlords are allowed to register their apartments’ value at the “legal registered rent” and charge their tenants a lesser amount than that maximum if they so choose (a common practice in the outer boroughs). Some even sign “preferential lease riders” that confirm the tenant will pay a lesser amount for a number of years — or for the duration of the tenancy.

That means landlords create financial incentives for tenants to fill their apartments in less desirable neighborhoods. And tenants like Brown hold on to that one-bedroom apartment for $962 a month.

But when neighborhoods like Crown Heights become trendy, landlords realize that they’re able to make more money on their units, and can raise the rent to the legal maximum on the next lease. The demand has left longtime residents, many of whom signed their leases decades ago, scrambling. The tenants at 285 Schenectady and 1646 Union have organized several protests against Renaissance Realty in recent months, and have demanded more stringent rent controls from the state to prevent skyrocketing increases.

But now their landlord has taken them to Brooklyn Housing Court. And Esteban Giron, an activist with the Crown Heights Tenant Union, doesn’t have high hopes for the tenants’ prospects.

“Many of them signed preferential lease riders over 30 years ago,” says Giron, in an email to the Voice. “Most of them don’t have records from 30 years ago, so they’re essentially shit out of luck.”

In this increasingly popular Brooklyn neighborhood, if longtime residents can’t pay, it won’t be hard for the management company to find tenants willing to cough up the money for higher rents. “If [the tenants] don’t have a lease rider that specifies that the preferential rent is for the whole length of their tenancy, the landlord has the right to charge whatever he/she says is the legal rent” when the lease is up for renewal, Giron says. “It’s quite possible that the landlord will win.”

While the legal battle continues, Giron and his fellow activists still have hope. He points to situations where politicians can intervene and work with landlords to make affordable housing a profitable option for all involved.

An example: Alma Realty, owner of the Brooklyn Jewish Hospital complex, was legally able to start charging market-rate rents on many of its units this autumn. But city politicians talked to the company, and fought for cheaper rates in exchange for a city tax exemption.

“Through negotiations with our elected officials, they are about to cut a deal to make the building permanently affordable,” says Giron. “So there is hope for our Renaissance Realty tenants even if things don’t go well for them in court.”

In the meantime, the tenants will continue complaining — and the real estate company will keep trying to get more cash.