The asking price is an astronomical $5 billion, and the 25,000 tenants wonder if any buyer would quickly deregulate rent-stabilized apartments to maximize profit. In the uncertain climate, the majority middle-class renters are banding together and talking about buying the housing complex with a mix of their own money and governmental funds.
“We are better off with our destiny in our own hands,” says Al Doyle, president of the Stuyvesant Town-Peter Cooper Village Tenant Association. He is a second-generation Stuyvesant Town resident.
City Councilmember Daniel Garodnick, along with other elected officials, is floating the idea that private and public pension funds, governmental funds and “socially conscious private-sector investors” could help the tenants buy their apartments. However, Met Life has communicated to governmental officials and tenants that they would not entertain a tenant-led bid.
Purchase by a tenant-led group of investors seems unlikely given the enormous price tag, even if Stuyvesant Town-Peter Cooper Village residents are better off than most city renters. “Anything is a possible – realistic is subjective,” says Doyle.
Though tenants are anxious about a possible sale to a large corporation, any buyer’s business plan will surely be the same as Met Life’s. The insurance company has been aggressively turning rent-stabilized apartments to market-rate rentals through vacancy increases and remodeling work. Landlords receive a 20 percent increase in a rent-stabilized apartment every time someone moves out, and they can add 1/40 of the cost of remodeling work to the monthly rent as well. Once an apartment reaches the $2,000 decontrol threshold, it becomes deregulated and the landlord can charge as much as the market will bear. Also, market-rate tenants do not enjoy the same protections as rent-regulated tenants; they don’t have an automatic right to renew their leases, for example.
Met Life advertises the market-rate apartments as “luxury” and charges thousands of dollars for them—not bad for a complex that many tenants referred to as “projects.” “Stuy Town set the mold for urban redevelopment. The government gave a huge gift to Met Life, condemning the land and turning it over to Met Life with large-scale displacement of poor people,” said tenant historian Roberta Gold.
In order to build the complex in the late 1940s, Met Life teamed with city development czar Robert Moses to draft language in a bill to allow insurance companies, which were then barred from owning housing, to develop limited-dividend housing. The next hurdle was the 11,000 people huddled in tenements in the old gas house district. Using slumclearance laws (which were first backed by progressives), Met Life cleared an entire neighborhood to build homes for the middle class ready to move on after World War II.
Whether Met life does it itself, or the sell to someone else who does it, the remaining stabilized renters will be slowly squeezed out. They won't do anything illegal (there's too much exposure). But they'll go right up to the letter of the law.
This means that the existing regulated renters can stay as long as they want (or at least as long as they do nothing that could get them evicted). But when they leave, their apts will go free market.
Stuy town has a troubled history and the middle class that lives there wants to forget that history. They had their secluded community, mostly lily white and that was fine with the powers that be. The politicians who came, got their votes and they were allowed to stay. But now the gig is up. Met Life wants to sell the place and the middle class, who believed in capitalism will now be displaced out of their beloved housing projects. Call me bitter, but the tenant association at Stuy town, who long avoided taking controversial stances or being associated with leftist tenant leaders, are now being bitten by the same system that they defended.
This is cache, read story here
