Chinatown Tenants: Landlord’s Mass Eviction Attempt Based on Lies

The staircase to the second floor at 85 Bowery lists noticeably to the right. It’s a key point of contention in the dispute between the building’s Chinese-immigrant tenants and the landlord who’s been trying to drive them out for the past four years.

Joseph Betesh, the owner of the Dr. Jay’s clothing store chain, acquired the two five-story buildings at 83 and 85 Bowery, half a block north of the Manhattan Bridge, along with nine other Bowery buildings for $62 million in 2013. According to court documents filed by tenants, Betesh then refused to renew their leases. In March 2016, after trying to evict one resident on the grounds that the building was not rent-stabilized and so tenants had no guaranteed right to a lease renewal, he filed a complaint in State Supreme Court to evict them all.

Tenants charge that the landlord is concocting a string of excuses to empty the two buildings so they can be renovated for luxury housing or torn down for new construction. “We realized he wanted to evict everybody,” tenant leader Shu Qing Wang, who’s lived in 83 Bowery for five years, told the Voice through an interpreter at a rally in front of the buildings on July 19. The roughly 150 people there chanted, “Fan bi qian, bao jia yuan” — Mandarin for “No displacement, save our homes.”

The two redbrick buildings were constructed in 1910. Owned by the same family between the 1930s and 2013, they were lodging houses renting out cheap cubicles until 1980–81, when they were converted to apartments, with twelve units in 83 and sixteen in 85. The current tenants are mostly restaurant and garment-factory workers, says tenant association representative Jinming Cao. Some have lived there for twenty to thirty years, and they generally pay $1,000 to $1,200 a month in rent.

Betesh tried to evict Wang first, in early 2015, Cao says. The other tenants in the buildings chipped in to hire a lawyer and architect. “People knew it’s not about one apartment,” Cao adds.

Later in 2015, both the city’s Department of Housing Preservation and Development and the tenants filed “HP actions,” Housing Court cases intended to force Betesh to make such repairs as fixing the stairs and getting rid of rats. In February 2016, the court ordered the landlord to complete the repairs by the end of that April. He never made those deadlines, says lawyer Seth Miller, who began representing the tenants in the fall of 2016.

Because the old leases had not been renewed, Betesh tried to claim that the buildings’ residents were “month-to-month” tenants — and in January 2016 he sent the residents of 27 apartments notices that those tenancies would be terminated in 30 days. That March, he filed a lawsuit in State Supreme Court demanding that all of them be evicted on the grounds that the building had to be vacated in order to make critical repairs, that it was not rent stabilized, and that they had no right to stay because he’d terminated their rights as month-to-month tenants. He requested that the Housing Court case against Wang be included, that the tenants’ HP actions be stayed, and that the court issue a preliminary injunction prohibiting the tenants from using the building until the case was resolved.

For the landlord, Miller says, claiming that evictions were required by a structural emergency “looked to be a faster path than going tenant by tenant and having to deal with the rent-stabilization issue first.”

In a May 2016 court settlement that Public Advocate Letitia James helped broker, Betesh offered to give the tenants 99-year leases if they’d agree to be temporarily relocated during repairs. They rejected that deal, arguing that the repairs could be done while the building was still occupied, and fearing that rent increases, which the proposed settlement didn’t stipulate, would be far more than they could afford.

“After renovation, all the rent will go up. They didn’t want to tell us how much,” says Cao. “Once we moved out, we knew we could never come back.”

“Their plan is to spend $2.5 million to make the building gentrified,” says Miller. “The last thing they want is to have these tenants stay.” As major-capital improvements in smaller buildings are prorated over eight years, a $2.5 million renovation could yield permanent rent increases of more than $900 a month.

Milestone Equities, Betesh’s real estate company, did not respond to phone calls from the Voice.

The landlord’s lawsuit makes two main claims. First, it argues that the buildings should not be rent stabilized because they were lodging houses, not apartments, when the state rent-stabilization law was enacted in 1974 — and were converted to apartments just before single-room-occupancy rentals were put under rent stabilization in June 1981. It also claims that the conversion was a substantial enough renovation to qualify the structure as a new building.

The tenants responded that the buildings should be rent stabilized, because they were built before 1974 and have more than five apartments, and a 1982 appeals-court decision held that the rent-stabilization law covered lodging houses retroactively. They also deny that the 1980–81 renovations were substantial enough to deregulate the building: Their architect presented evidence that the conversion did not meet the state Division of Housing and Community Renewal’s standard of replacing 75 percent of building-wide systems such as plumbing, heating, and gas supply.

A DHCR spokesperson said the agency cannot comment on pending litigation or administrative proceedings.

Milestone’s other major claim is that the buildings have too many structural defects to be repaired while the tenants are there. HPD cites the sagging stairway and halls among the eleven open Class C (“immediately hazardous”) violations at 85 Bowery. An engineer hired by the landlord claimed in January 2016 that 85 Bowery had to be vacated because of badly cracked joists on the stairwell and for asbestos abatement, and that 83 “is probably in as bad shape.”

The staircase at 85 Bowery is a major problem, Miller said at the July 19 rally, but the tenants’ architect estimated it could be fixed for about $110,000. Christine Hobson, a senior structural engineer at Rand Engineering hired by the tenants, wrote in a court affidavit in April 2016 that the bad staircase joists could be replaced while the tenants remained in their apartments if protective barriers were installed in the hallways. Regarding 83 Bowery, she added, “a building should not be vacated based on the supposition that it is ‘probably in as bad shape’ as another building,” and “a quick inspection of one apartment and building stairs is a slim reed upon which to recommend” that.

In a September 2016 court stipulation, Betesh agreed to let tenants stay temporarily in exchange for them agreeing to stay the HP action and extend the deadline for repairs. Later that month, however, he filed another motion demanding their immediate eviction, claiming that surveillance cameras he’d installed showed that most of the apartments were overcrowded, and alleging that tenants were illegally renting out rooms.

“The landlord wants people to think that they aren’t real tenants, that they aren’t the same people as are on the leases…. They lied,” Miller said at last week’s rally. “We’re going to show the courts and the city the truth. This is stabilized housing and can be repaired.”

In May, State Supreme Court Justice Kathryn Freed referred the disrepair and rent-stabilization questions to the DHCR. A court conference on the case is scheduled for November 30.

The battle on the Bowery is just part of a larger war currently playing out in a Chinatown being pressed on all sides by gentrification. The owner of 231 Henry Street, several blocks southeast, is also trying to evict remaining longtime tenants by claiming that the twelve-apartment building is not rent stabilized, says Bao Gai Huang, a 62-year-old garment worker who’s lived there since the mid-Nineties. The landlord stopped accepting his rent in 2016, telling him, “You’re not my tenant anymore,” he says. The case is now in court, with the owner ordered to accept rent and let the tenants stay temporarily — but already, vacated apartments are renting for $3,000 a month.

Betesh’s attempted mass eviction of his tenants “really shows how severe the issue of displacement is in our community,” Renquan Yang of the Chinese Staff and Workers Association said at last week’s rally.

While harassment intended to drive out rent-stabilized tenants has become a common business model over the last decade or so, mass evictions are relatively rare, because they need a plausible legal pretext. However, they are more common in Chinatown, because of the housing stock’s age and sometimes dubious legal status. In 2011, the new owner of a five-story building at 11 Allen Street moved to evict all the building’s tenants because the previous landlord had never bothered to obtain a certificate of occupancy. He succeeded, and apartments there now rent for up to $4,400.

The Chinese Staff and Workers Association contends that much of this displacement would not be happening if the city had included Chinatown in its 2008 rezoning of the East Village that set height, density, and affordability standards. A plan proposed in 2012 by the Chinatown Working Group would have put restrictions on new construction in Chinatown, including a requirement that 40 to 55 percent of apartments built be affordable to people making less than $40,000 a year. The Department of City Planning rejected the plan in 2015; a spokesperson called it “too vast an undertaking.”

Failing to extend the zoning restrictions much south of Delancey Street channeled development into Chinatown and the southern Lower East Side, says Zishun Ning of CSWA. Displacement has become “very rampant” in the past two or three years, he adds. “Because of the profits, they want to drive out rent-stabilized tenants.”

Just up the block from 83-85 Bowery is the teal-blue glass Wyndham Garden Hotel. Across the street is a new eight-story glass building. A scaffold platform over the sidewalk signifies the renovation of the seven-story building next door. Around the corner on Hester Street is a partially excavated vacant lot, the former site of a building that thirty people had to leave after it was irreparably damaged during the hotel’s construction in 2009.

Six blocks north, in another of the eleven buildings from the 2013 deal, Milestone Equities is offering a 3,500-square-foot loft for $13,500 a month. And if 83 Bowery is in serious danger of collapsing, that has not stopped Milestone from offering its commercial space through the RKF retail real estate broker, touting the more than 6,700 square feet available on the first floor, second floor, and basement.

The tilting staircase at 85 Bowery leads up to narrow hallways, the doors festooned with red-and-gold good-luck decorations. In a second-floor apartment with neat dark-red linoleum on the floor, four children with ages ranging from toddler to preteen play on the couch. Speaking in Mandarin through an interpreter, Shui Feng Zheng, who’s lived in the building for nineteen years, points out the tacked-up wood rectangles used to patch holes in the ceiling, and the new — actually working — gas stove installed after the tenants filed their lawsuit demanding repairs.

“I want to tell the landlord not to evict us because there are a lot of older folks here and a lot of young kids, including babies,” says Zheng, 46, a mother of three from China’s Fujian province. “Where would we go? The kids go to school here. This is our home.”