Kushner Companies and tenant lawsuits: A brief history

New York’s Tenant Protection Unit announced this week that it would investigate Kushner Companies for tenant harassment. The move comes after 19 current and former residents of Williamsburg’s Austin Nichols House announced their intention to file a $10 million lawsuit alleging that the development firm participated in “illegal, destructive, and dangerous construction practices” at 184 Kent Avenue.

The firm, founded by Charles Kushner and formerly helmed by his son and senior White House advisor Jared Kushner, is no stranger to controversy. The allegations of tenant harassment at Austin Nichols House join an accumulation of similar complaints that seem to indicate a consistent disrespect for tenants’ rights.

Since 2014, tenants of Kushner Companies–owned buildings have pursued litigation against the company, alleging that Kushner and its property management company, Westminster City Living, bilked its lawful responsibilities as landlords by using disruptive construction and aggressive legal tactics to flip market-rate units and remove rent-stabilized tenants. Read up on a few of those cases that have pitted Kushner Companies against housing rights advocates, below.

The lawsuits

89 Hicks Street: Back in 2014, Kushner Companies purchased a parcel of Brooklyn Heights buildings from the Brooklyn Law School, with an eye toward converting them into residences. One of those properties, 89 Hicks Street, became the center of a lawsuit filed on behalf of nine of the building’s tenants in August 2017.

The class-action suit alleged that Kushner Companies waged a “deceptive, systematic and pervasive pattern of misconduct to skirt rent stabilization laws,” and may have bilked tenants out of as much as $1 million in rent overcharges.

Kushner Companies

The lawsuit came after an investigation of more than 50 of the firm’s buildings by the non-profit Housing Rights Initiative, according to The New York Times. HRI, which is also helping levy the suit at 184 Kent Avenue along with Brooklyn Borough President Eric Adams, alleged that when Kushner Companies bought the Hicks Street building, it was legally obligated to make the apartments rent-stabilized, since the building dates to before 1974 and has more than six units.

However, per HRI, the developer “registered a mere 10% of its units as rent stabilized, instead of registering 100% of its units, as required by law.” (That translates into five out of 48 units.)

HRI also notes that Kushner Companies did not register the de-stabilized apartments with the state’s Division of Housing & Community Renewal, as required by law; instead, “it simply wasn’t registering anything at all,” per a release from HRI.

18 Sidney Place: A similar scenario unfolded in November 2017, when a second class-action lawsuit was filed on behalf of the tenants of 18 Sidney Place. The multi-family property was purchased by Kushner Companies at the same time as 89 Hicks Street from Brooklyn Law School.

The lawsuit trailed an investigation by HRI and alleged that while the building was temporarily exempt from rent stabilization law when it was academic housing, it was legally required to re-register as rent stabilized once it was sold to a private landlord. Instead, according to HRI, Kushner Companies registered “a mere 11% of units as rent stabilized, instead of the 100% required by law.”

170-174 East 2nd Street: Kushner Companies purchased these East Village tenement buildings in December 2013, and the following summer, reports surfaced that Westminster City Living made efforts to oust the buildings’ rent-stabilized tenants by sending eviction notices, offering buyouts (a common tactic, but one that can lead to “landlords preying on vulnerable tenants and bullying people into leaving their homes for paltry sums,” according to the New York Times), and taking residents to housing court.

Meanwhile, the buildings’ market-rate tenants were not granted the option to extend their leases. Those vacated apartments were then gutted in a manner that was allegedly highly disruptive to the remaining rent-stabilized tenants.

At a September 2014 press conference held by Manhattan Borough President Gale Brewer and City Council member Rosie Mendez in front of the buildings, tenants described their plight. “My ceiling shook so hard I thought they were going to collapse and they did, [in] the kitchen and in the bathroom, two times,” said Mary Ann Siwek, a resident of the building for 34 years.

In September 2014, The Real Deal reported that 70 percent of tenants of the buildings had moved out since the Kushner Companies purchase. Renovated market-rate apartments are currently asking upwards of $3,000/month, more than three times what rent-stabilized tenants were paying for the units.

331 East 9th Street: A rent-stabilized tenant of the Kushner–owned building at 331 East 9th Street filed a lawsuit in 2016 alleging that her apartment was rendered unlivable by construction workers renovating the apartment above hers.

The lawsuit alleged that in November 2013, the contractors ruptured a pipe, causing a rush of water that lead to the collapse of her kitchen ceiling. The flood of water made her apartment uninhabitable and forced the tenant, Uta Winkler, to scrap Thanksgiving plans and relocate with her houseguests to a hotel. Westminster City Living offered to cover two nights of Winkler’s hotel stay, though it would take a full week to repair her apartment.

Winkler’s repeated attempts to contact Westminster and resolve the issue went unanswered, so she withheld her monthly rent of $1,637 from May 2014 to January 2015. Kushner Companies then sued Winkler in housing court for unpaid rent.

As recently as late 2017, Winkler was still fighting Kushner in court, specifically over the remediation of black mold ostensibly caused by the flooding. Kushner agreed to pick a mold remediator, but that service had yet to be rendered.

Two additional tenants of 331 East 9th Street countersued Kushner Companies for the mayhem wrought by the renovations; one claimed that the “construction noise was so deafening he had to move out for 19 weeks until the contractors were done,” according to DNAInfo.

Which leads us to 184 Kent Avenue: In July 2016, residents living through the rental-to-condo conversion of 184 Kent Avenue surfaced complaints alleging that construction work on site was uprooting their day-to-day lives, often intruding into occupied apartments as the developers restructured the existing units into condos.

Other complaints alleged that Kushner Companies pursued a relentless effort to drive the rent-stabilized tenants out of the building amid its conversion. An AP report found that over 75 percent of the building’s apartments were emptied or sold since Kushner Companies took control of the building, a much higher turnover than most rent-stabilized building conversions. (Citywide, the average turnover is around 12 percent, according to an Independent Budget Office analysis.)

The press release announcing the lawsuit cites an independent lab analysis that found that occupants of 184 Kent Avenue were exposed to toxic and carcinogenic substances throughout the renovation, including crystalline silica and lead.

This Monday, a group of 19 current and former residents of the building, with the help of the Housing Rights Initiative and Brooklyn Borough President Eric Adams, announced the aforementioned $10 million lawsuit that will investigate whether the actions of Kushner Companies violated New York’s housing laws and regulations.

In a press release announcing the 184 Kent lawsuit, Brooklyn Borough President Eric Adams didn’t mince words. “During my tenure as Brooklyn borough president, the issue I hear most about from constituents is the affordable housing crisis and the destabilizing influence of tenant harassment,” said Adams. “We must do all that we can legislatively and through our courts to ensure our laws not only protect tenants, but aggressively prosecute violators so that justice is served accordingly.”

New York state investigates:

After the 184 Kent lawsuit was made public, the governor’s Tenant Protection Unit announced that it would investigate the charges against Kushner Companies. “In New York, no one is above the law,” said RuthAnne Visnauskas, the Commissioner of New York State Homes and Community Renewal, which oversees the Tenant Protection Unit. “[W]e will thoroughly investigate the appalling allegations of harassment at this or any related property and hold anyone found guilty of such abuse responsible to the fullest extent of the law.”

When reached for comment about the TPU investigation, Kushner Companies issued the following statement:

Kushner Companies respects and values its tenants and that is how we built such a great and successful business for more than 35 years. There have been no complaints to the DHCR regarding any type of harassment or unsafe conditions. We are confident that the TPU will reach the conclusion of no harassment when they finish the rent review announced today. We understand the current political environment. Sadly, we are caught in the middle and continue to have baseless and meritless claims filed against us. Nonetheless, we will continue to develop first rate projects and provide our tenants with a great product.

• Kushner Companies hit with $10M lawsuit over Brooklyn condo conversion [Curbed]