Nearly 2,500 apartments that were built across 194 buildings last year in New York City weren't registered as rent stabilized when they should have been after owners used tax breaks to subsidize the projects. In all of the instances, the projects were intended as condos but turned into rentals at the last minute, the Times says. Under the 421-a tax incentive, developers are required to register apartments as rent-stabilized, meaning their rents would be regulated by the city. Leases would also be renewable to tenants each year. Not enrolling apartments as rent-stabilized means that building owners could convert the apartments back to condos should they chose to without being prohibited by rent-stabilized tenants.
The city is going soft on the owners, and is offering a one-time, non-negotiable deal where if they properly register the apartments as rent stabilized, they won't face penalties as serious as returning the amount of their tax incentive. The senior vice president of the Real Estate Board of New York told the Times that it was conceivable that many of the small building owners, who are far from the city's Extell's and Brookland Capital's, misunderstood the 421-a rules. Attorney General Eric Schneiderman called the deal "fair" and said that it would protect tenants while keeping their rents at current or even lower levels. The investigation into the improperly-registered units, which are mostly in gentrifying areas of Brooklyn like Bed-Stuy and Williamsburg, started up after a tenant complaint.
· Nearly 200 Buildings in New York City Flouted Tax Rules, Officials Say [NYT]
· New Rent Laws May Be Better For Tenants Than Expected [Curbed]
· Mapping the Rent Stabilized Apartments NYC's Lost Since 2007 [Curbed]
· New York's Rent Regulations Will Be Extended For 4 Years [Curbed]
· Rent Stabilization archives [Curbed]
· All 421-a coverage [Curbed]