The six-story building at 143 Ludlow Street looks completely normal. Unassuming renters checking out the available apartments in the building probably even think it looks niceunits have dark walnut floors, new stainless steel appliances, exposed brick, and marble bathroomsnot too shabby, right? Well, 143 Ludlow has a less-than-perfect past. In 2012, owner Samy Mahfar of SMA Equities decided to tear the place apart while long-time rent-stabilized tenants still lived there and plop an addition on top. Throughout construction, the project received more than 120 DOB complaints and fielded more than a few violations, including some that resulted in Stop Work Orders. All of this was catalogued by Bowery Boogie, but nothing, not even the lawsuit filed by tenants last year, slowed down the development.
Now that work is complete (and there are no open violations) and the renovated units are on the market (the first ones came to market last year), Bowery Boogie speculates that Mahfar illegally deregulated them. Back in 2012, it was reported that Mahfar changed all of the unit numbers, and while this may not seem significant, it creates quite the bureaucratic confusion in tracking a regulated unit's rent history. As such, it would be difficult to prove that, say, the current unit called PHB was once unit #22, and the rent was illegally jacked up to $4,595.
Landlords of stabilized buildings are allowed to raise rents if they renovate or after an apartment has been vacated, but the math for 143 Ludlow may not add up. According to the Rent Guidelines Board, the overseeing body that votes annually on how much rents in stabilized units can increase, a landlord can raise the rent by as much as 20 percent after an apartment is vacated. Additionally, if a landlord renovates an apartment while it is vacant, they can also collect a rent increase of either 1/40th or 1/60th (depends on the size of the building) the cost of the improvement. This would be added to the vacancy increase. If this end amount is greater than $2,500, an apartment is deregulated.
Bowery Boogie says that the unit now known as #1 used to rent for just $375, but the new rent is now $6,412. The 20 percent vacancy increase (which is for a two year lease, one year leases can be increased even less) would up the rent to $450. That leaves a difference of $5,962, which means that it would have cost about $240,000 to renovate just this unit (the building has less than 35 units, so rent can increase 1/40th the renovation cost). Obviously, that's not an unheard of price for renovating a 3BR/2BA apartment, and there are a lot of factors that alter the price. The original tenement went up in 1920 and suffered years of neglect, and according to the new listings, it seems like the units were drastically altered and enlarged. But even if the square footage of, for example, unit #1, is the same, it would only have taken about $80,000 worth of work to make the rent greater than $2,500. At that point, it's deregulated automatically. So were they illegally deregulated? Possibly. But it's also very possible that they weren't.
· Questioning the Rent History at 143 Ludlow; 2 More Longtime Tenants Evicted [Bowery Boogie]
· 143 Ludlow Street coverage [Curbed]
· Guide to Rent Increases for Rent Stabilized Apartments in New York City [NYSHCR]