Tenants score legal victory against big landlord

The highest court in New York state held Oct. 22 that Tishman-Speyer, a big landlord that controls 11,277 apartments in one major Manhattan apartment complex alone, must significantly lower the rents on over 4,000 apartments that it leases at “market rate” and put them back under rent regulation.

The current advertised price for one of its two-bedroom apartments is $3,200 a month, while the same apartment under regulation rents for $1,400 to $1,600.

Tishman-Speyer, as well as the previous landlord Met Life, took about $25 million in government money to maintain and modernize the buildings. The court held that taking this money prevented landlords from deregulating apartments.

While precise figures don’t appear to be available, a former deputy housing commissioner told the New York Times that he thought this ruling would apply to 35,000 to 70,000 apartments throughout the city. (Oct. 23) New York has a million apartments under rent regulation, a majority of the rent-regulated dwellings in the United States.

Tishman-Speyer put together a consortium of pension funds and real estate speculators to buy the Stuyvesant Town-Peter Cooper complex of 110 buildings for $5.4 billion three years ago. Calpers, the California pension system, put up $500 million (Los Angeles Times, Oct. 21); the Florida pension system put up $250 million (St. Petersburg Times, Sept. 9); and other smaller funds also put up significant funds. Tishman-Speyer put up only $56 million of its own money.

Tishman-Speyer promised its investors a 20 percent return. It thought it could achieve this rate by removing most of the apartments from rent control, but ran into tenacious resistance from well-organized tenants as well as the end of the real estate bubble.

The New York Times and the Wall Street Journal, two major business-oriented newspapers, covered the financial aspects of this decision extensively—how much the landlord will have to refund; how it will affect when they go into default; how much tenants will get, if anything but a reduced rent; how it has devastated the residential real estate market in New York City; and so on.

Ever since New York state took over rent control from the federal government in 1950, landlords and tenants have been locked in a seesaw struggle. New York City tenants know in their bones that without rent regulation they would have no protection against greedy landlords. Landlords have lied and cheated to get this obstruction to their greater profits removed.

The tenants at Stuyvesant Town-Peter Cooper are well organized. Depending on the circumstances, they can get 200 to 500 people to a meeting to defend their homes. They are going to push the landlord hard to carry out this decision in the tenants’ favor.

A few tenants, perhaps aspiring landlords, condemned the decision, but most felt such a decision was long overdue. “I’m going to be able to stay where I moved 35 years ago,” one retired tenant told Workers World. “They tried to screw the little guy, and we won,” said another retired tenant. (Daily News, Oct. 22) Others condemned all the fancy landscaping and new, glitzy, expensive services Tishman-Speyer is offering.

This legal victory wouldn’t have been won without a lengthy, determined political struggle on the part of tenants to protect their homes.