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Tenants Rip Program Tying Rent Hikes to Landlord Investments

Tenants Rip Program Tying Rent Hikes to Landlord Investments
By Jillian Jonas | December 19, 2014
from City Limits

Bronx resident Soledad Franco has lived in her apartment since 1972, moving in when she was ten. A 2011 fire precipitated by an unlicensed electrician caused her to lose all of her belongings and become temporarily homeless. There have been at least four fires in the building since 2007—despite that, the owner won approval from state regulators on four occasions for extra increases to her rent.

Loraine Dellamore's building was allowed to deteriorate so badly and for so long that an organizer with the Flatbush Tenants Coalition (FTC) said the conditions were the worst she had ever seen, and included "sewage dripping on people's heads." As one of the tenant leaders, Dellamore spent two years fighting just to get basic repairs—and then contested the owner's bid for a rent increase, which she says was based on dubious costs.

Ed Maloney's Manhattan building converted to a condominium* in 2000. Soon after, the owner embarked on construction in some of the common areas. Much of it was done incorrectly or shoddily, which was well-documented by the tenant association, of which Maloney is president. Still, when the process was complete, Maloney's rent went up $171.68 per month.

They are three New Yorkers with a lot in common: All are long-term tenants living in rent-stabilized apartments. All underwent the process known as Major Capital Improvements (MCIs), where landlords can institute building-wide construction and raise rents in perpetuity—that is, pass the costs on to tenants, even after the work has actually been paid off. And all three believe they were abused by this system.

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NYC Tenants File $10M Lawsuit Against Overcharging Landlords

NEW YORK—Even the politicians of the city are not immune from constant harassment, eviction attempts, and overcharges from landlords—if they live in rent-regulated apartments. “I’ve lived here all my life,” said Assemblyman Keith Wright outside his apartment building at The Riverton complex. “Since my mother carried me over the bridge as a baby.”

The Riverton in Harlem complex was built in 1949, with over 1,200 units, and Assemblyman Wright’s mother was the first to move into her building at the time. The residential development largely served the African American population as other projects like Stuyvesant Town-Peter Cooper Village restricted their tenancy based on race.

Today, it is one big melting pot and everyone, market-rate tenants included, are standing together against harassment from the landlords, Compass Rock Real Estate LLC, which is owned by CW Financial.

On Thursday, tenants and Wright filed a lawsuit against Compass Rock for $10 million for years of overcharging tenants through a variety of methods. “They are trying to nickel and dime us to death,” said Darren Pearson, second vice chair of the Riverton Tenants’ Association. Wright, who chairs the Housing Committee, discovered he was being billed multiple times for capital improvements the landlord may not have even made.

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