Stuy Town tenants emerged victorious Friday, which could upend landlords’ plans to deregulate scores of other apartments in the city.
A state court judge ruled in favor of residents of the complex, who argued that changes to New York’s rent law in 2019 barred the owner, the Blackstone Group, from deregulating some 6,200 apartments. Blackstone claimed that previous court settlements and agreements with the city allowed the apartments to be taken out of regulation once it stopped receiving certain property tax benefits under the J-51 program.
Blackstone’s arguments, however, were “based on a misconception of the law,” state Supreme Court Judge Robert Reed wrote in his decision. Reed agreed with the tenants’ claim that a 2012 settlement reached with the former owner of the complex, Tishman Speyer, did not “preclude the application of future rent and eviction protections,” in this case, the elimination of luxury decontrol, a policy that allowed apartments to leave rent regulation after they passed a high-rent threshold.
In fact, the 2012 deal, known as the “Roberts Settlement,” contained specific language preparing for the application of future rent-related policies, the judge stated.
Friday’s decision caps decades of litigation between Stuy Town’s residents and its owners. Industry professionals have said the case could have sweeping implications for other properties that received J-51 and deregulated apartments, or planned to do so, after the passage of the 2019 rent laws. Stuy Town’s apartments were slated to leave regulation after June 2020.
“We have not issued a single rent increase above those legally allowed under rent stabilization so this ruling has no impact on our tenants,” a Blackstone spokesperson said in a statement. “We have invested more than $300 million into the property, materially improved service levels and voluntarily kept 5,000 apartments affordable, and our commitment to residents is unchanged.”
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The firm has not indicated whether it will appeal the decision.
Blackstone and Ivanhoé Cambridge bought the 11,200-unit housing complex for $5.3 billion in 2015. At the time, they agreed to keep 5,000 apartments below market-rate for at least 20 years.