Last summer, the New York State Division of Housing and Community Renewal informed Parkside Equities of a request to investigate its six-story apartment building in Flatbush, where tenants had complained about water leaks, lack of heat, rats and mice, and holes in their apartment floors. The 22 tenants at 1 St. Pauls Court were seeking to have the state agency force Parkside to reduce rent at the 65-unit building if the problems weren’t rectified.
None of that is unusual in the New York housing world. What happened next was: In December, Shamah Properties, Parkside’s parent company, filed a request in Brooklyn State Supreme Court for an injunction to bar the state agency from investigating the building. The motion alleged that the complaints, which had been filed via the DHCR website, hadn’t actually been authorized by the tenants. A judge is scheduled to hear the case on April 19.
The landlord’s suit is “something we’ve never seen before,” says Edward Josephson, of Brooklyn Legal Services, one of the lawyers representing the tenants. The courts can stop DHCR from “doing something beyond its powers,” he says — but he believes inspecting buildings clearly doesn’t fit that description, since that’s literally one of DHCR’s jobs. Furthermore, if DHCR is allowed to inspect the building and then finds no problems, the agency won’t then order a rent reduction. “There’s really no basis in law for any of this,” Josephson says.
Josephson says all the claims were authorized by tenants in writing, and that the landlord is blowing up a “typographical error” — the tenant of Apartment 3H’s complaint was accidentally listed as coming from Apartment 3A — “into this huge case alleging systematic fraud.”
Blaine Z. Schwadel, attorney for Shamah/Parkside, says the injunction was necessary because his client believes that the Flatbush Tenant Coalition — an advocate organization for tenants in Flatbush, East Flatbush, and Crown Heights — filed complaints on behalf of some residents who hadn’t authorized them. But Schwadel declines to specify further, suggesting only that the whole system seems flawed.
“Right now, anybody in the city can file a complaint on any apartment by pushing a button,” he says.
(DHCR said it could not comment on pending litigation, but added that it was proud of its online system, calling it an important tool that enhances access to protections for tenants with legitimate complaints.)
The landlords say they have been model citizens, and point to the fact they are “building community” in their properties by holding parties, concerts, and art classes for children in the buildings. Tenants say they would rather have repairs and a working elevator.
“He gives parties in the buildings, but the same problems still exist,” says Jennifer Coley, who lives in the building with her mother, Valerie. The lawsuit against DHCR, she adds, is trying to “take away our rights to do anything.”
Shamah Properties — along with its management company, Shamco — acquired 1 St. Pauls Court in 2012 as part of a six-building portfolio it bought for $42.1 million.
The company, founded in 1980, has expanded its holdings significantly over the past several years. In 2015, Shamah bought eight buildings in Washington Heights for $44 million, twice what previous owner Jared Kushner had sold them for two years prior. Last September, it bought 560-562 West 174th Street for $11.6 million, a more than 80 percent increase over what the previous owner paid in 2014. The Real Deal described Shamah Properties as “looking for rent-stabilized buildings with potential upside that can be opened up through renovations.” Shamah and its subsidiaries now own about twenty buildings in Brooklyn, mostly in Flatbush; several in upper Manhattan; and three large buildings in East Orange, New Jersey, according to company CEO Alan Shamah.
Flatbush Tenant Coalition organizer Aga Trojniak calls buying buildings at those prices “classic predatory-equity red flags” — the business model where real estate investors buy properties at inflated prices, with plans to turn a profit by driving out rent-stabilized tenants and replacing them with market-rate renters. (Shamco Management’s website offers “aggressive marketing of vacancies” and “overseeing eviction proceedings” among its services.)
In an interview with the Voice at his office in New Jersey, Shamah denies that he wants to push tenants out. “To put myself under the financial stress of having to be aggressive — not interested,” he says. “I don’t have to do it.” The large premium he paid for the Washington Heights buildings, he says, weren’t excessive, because the neighborhood “wasn’t on the radar” in 2013.
“We’re long-term holders,” he says. “In this business, you’ve got to wait, like with a fruit tree.” Typically, he explains, it takes seven to ten years for rents to go up enough “to see any kind of meaningful return.”
Shamah’s tenants at 1 St. Pauls Court describe their landlord as someone who wants a relationship with them but is hypersensitive to criticism about serious problems in the building. Cynthia Sawyer, who has lived in the building for seventeen years, says her bedroom and bathroom floor still need major repairs, and she has taken days off from her job to wait for workers who didn’t show up. Last summer, she says, elevators stopped working in the building shortly after DHCR approved a $6-per-room major capital improvement rent increase to Parkside for having renovated the elevators.
In 2013, the year after Shamah took over 1 St. Pauls Court, then–Public Advocate Bill de Blasio’s office ranked Parkside Equities the second-worst landlord in Brooklyn. The building had 191 violations outstanding with the New York City Department of Housing Preservation and Development, including 32 class C violations, the most severe. It’s now down to 14 open violations.
Shamah says the number of violations gives an exaggerated picture of a building’s problems. Many are left over from previous tenants, he claims, and HPD will only clear them if the current tenant gives an inspector access.
The open violations at 1 St. Pauls Court include a C violation issued last August for missing window guards in a fifth-floor apartment. This winter, HPD received seven complaints about lack of heat; tenants said the building went four days straight without heat in March 2017.
“He gives heat, but it’s inadequate,” says Jennifer Coley. “Last winter with the arctic freeze was the absolute worst.”
According to HPD records, several of nearby Shamah/Shamco buildings have similar problems, including a building on 543 East 21st Street that has 53 open violations.
Tenants at 1 St. Pauls Court say there are other serious problems at their building. Stephanie Paer, 29, a domestic-violence social worker, says when she moved in three years ago, Shamco never told her that the apartment had bedbugs. Her rent was increased based on $30,000 in claimed renovations, she adds, but the bathroom ceiling still leaks.
Shamah says he’s instituted a 24-hour hotline for tenants to call in repair requests in English or Spanish, so the office will know what they are and can track that they’ve been done. “If a repair request is called in, it goes directly to our computer system, and all our supers have tablets,” he says. “So it’ll immediately show up on their tablets.” If it’s an emergency after the super’s 9-to-5 hours, Shamah says the call is forwarded to the property manager and then the owners.
“Our boiler systems are fully computerized,” he adds. The system alerts him if something’s wrong, and keeps records of building temperature and hot water. And “there are multiple tenants who not only have my direct email address, they also have my cellphone number,” he continues.
Last June, says Sawyer, she and other tenants at 1 St. Pauls Court received a letter from Shamco stating that many of the issues raised by the Flatbush Tenant Coalition, which has been organizing residents in the company’s properties for several years, “appear to be inaccurate or nonexistent.” Others got letters accusing tenant leaders of “trying to turn the tenants against the landlord,” says Valerie Coley.
In January, tenants at Shamah’s 538 East 21st Street property received another letter from Shamco titled “A Social Contract for a Just Society.” “We wanted to ensure that you were aware that some tenant leaders along with the Flatbush Tenant Coalition, in our experience, have been vilifying and defaming us, and misguiding tenants about a number of housing issues,” it read. “If you are approached by a third-party tenant association, we advise caution based on in our view the careless and wonton [sic] interference the Flatbush Tenant Coalition has exhibited.”
“It’s a gaslighting technique,” Paer says. “It’s exactly what abusers do.”
The relationship between tenants and their landlord remains contentious. At a meeting with tenants last summer, Paer says, Shamah was screaming and banging on the table.
Shamah contends that he, like landlords in general, is being unfairly vilified.
“There’s a lot of anti-landlord rhetoric, which appears to be the generally accepted scapegoat in the city for social issues, one of which is affordably priced apartments,” says Shamah. “Good landlords are being swept up by this anti-landlord rhetoric. It’s just acceptable to rage.”