Blackstone loses fight over rent controls at Manhattan complex

NEW YORK – Tenants living in Stuyvesant Town-Peter Cooper Village, the largest apartment complex in Manhattan, New York, won a battle to keep their rents insulated from potentially sharp increases, after a judge ruled last week against their landlord, the Wall Street private equity firm Blackstone.

The company is the largest owner of commercial real estate in the world and has lately been expanding into rental housing. Blackstone bought the apartment complex in 2015 for about US$5.4 billion (S$7.2 billion) in a deal that was praised by local politicians because of promises that nearly half the 11,200 units would remain affordable to middle-class families.

The legal dispute centred on whether other units at the complex, roughly 6,000 of them, should also remain rent-stabilised. Rents in such units can go up only by set amounts every year, and renters have a right to renew their leases.

The new ruling was the latest development in the turbulent history of the complex, a group of 110 plain red brick buildings built across 32.4ha in the 1940s as middle-class homes that has since become an emblem of many of New York City’s most high-profile housing disputes.

The apartments at issue in the case had been set to lose rent stabilisation in July 2020. But citing new tenant-friendly laws passed by the state in 2019, a group of tenants and the Stuyvesant Town-Peter Cooper Village Tenant Association filed a lawsuit in March 2020, arguing that their homes should remain rent-stabilised.

Blackstone argued that the provisions of a 2013 settlement stemming from a prior case should allow it to deregulate the apartments from July 2020. It argued the state laws did not supersede that settlement. But in a ruling dated Jan 4, Justice Robert Reed of New York State Supreme Court in Manhattan sided with the tenants.

Ms Susan Steinberg, president of the tenants’ association, said last Friday that “thousands of our neighbours can plan on staying in their homes, protected by rent regulation”.

A Blackstone spokesman did not say whether the company planned to appeal, but said it had “invested more than US$300 million into the property” and “materially improved service levels”, as well as kept 5,000 homes not affected by the ruling restricted to lower-income tenants.

“Our commitment to residents is unchanged,” the spokesman said. She noted that Blackstone had not issued any rent increases “above those legally allowed under rent stabilisation”. NYTIMES