1,200 tenants meet to fight for their homes

Twelve hundred tenants from Stuyvesant Town and Peter Cooper Village (ST-PCV) met March 13 to prepare a housing battle that can impact on tenants of all incomes throughout New York City.

The latest indication of the worsening housing crisis in the city is that foreclosures on multifamily housing have surpassed those on individual homes. Some 100,000 apartments, 10 percent of the housing market in New York City, are in buildings whose owners are delinquent on their payments or who have already been foreclosed. Complex real estate deals made at the top of the housing bubble are crashing down, threatening to make renters in New York City the next wave of victims of capitalist profit grabbing.

Among the most recent casualties are the tenants at three middle-income rent-stabilized complexes — Riverton Houses in Harlem, and ST-PCV on the East Side between 14th and 23rd Streets. Each of these complexes was purchased within the last five years for enormously high prices based on speculation of even higher prices and profits to come.

The success of these complicated deals required the already overvalued real estate market to continue to expand. It also required replacing tenants paying stable, lower rents with tenants paying at the then-market rate which was two and three times higher.

The Metropolitan Life Insurance Co. originally financed all three complexes in the immediate post-World War II period of extreme housing shortages. In the intervening years these large project-type complexes with over 12,500 apartments provided stable housing options attractive to working families wanting to live in Manhattan.

Profit-seeking real estate interests targeted even these 60-year-old apartment buildings. These interests were determined to replace affordable housing with units out of the reach of all but the highest paid rising young executives and professionals — who themselves might have to double up and share housing to pay the exorbitant monthly rent.

But tenants are not passive victims in this shell game. On a day of high wind and driving rain, over 1,200 wet people came out to a meeting of the ST-PCV Tenants Association to learn about plans and possibilities for fighting back. Tenant advocates, lawyers, politicians, and financial advisors explained to the solemn and attentive audience the things tenants could do to hold on to their homes.

Key to victory: tenant unity

While New York City’s rent laws favoring tenants have been whittled down in the decades since they were established, there are still points of leverage that can be used to protect tenant rights. The key to success, speakers emphasized repeatedly at the meeting, would be tenant unity.

Last year a stunning tenant victory in the courts resulted in a significant rollback of rents and the reassertion of rent stabilization throughout many of New York City’s middle income complexes. This victory involved a legal suit some ST-PCV market-rate tenants initiated. The courts eliminated the division between the market-rate and the rent-stabilized tenants at ST-PCV by putting all the apartments back under the rent-stabilization regulations.

Another aspect of the tenants’ plan to keep their homes is to use the recently bailed out Fannie Mae and Freddie Mac corporations. These are government-sponsored entities established starting in the 1930s Great Depression to promote home ownership. These corporations have been privately owned since 1968 and 1970, respectively.

In the big real estate deals of recent years Fannie and Freddie had strayed far from their original mission of promoting home ownership and affordable housing. In the ST-PCV deal, for example, they had invested at least hundreds of millions of dollars in a deal which would only be profitable if affordable housing were eliminated.

As Fannie and Freddie faced huge investment losses in the souring real estate market, they received billions in taxpayer bailout funds and are now approximately 80 percent owned by the government. Now they at least pay lip service to preserving affordable housing.

While the final stages of foreclosure and finding new owners are yet to play out for ST-PCV, the best outcome for tenants will depend on maintaining unity and creatively using what favorable laws are still on the books. A tenant victory at ST-PCV, and the process of organizing to achieve it, will influence the even bigger and broader fight that looms ahead: the one needed to preserve the city-wide rent-stabilization regulations now set to expire in June 2011.