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The bottom line for all of this stuff is that the value of Stuy Town/PCV skyrocketed, and so any owner after Met Life, such as Tishman Speyer and then Blackstone, needs to bleed the property in order to pay back its loans on the property. (Blackstone borrowed less, though.)
As Bugsy's post points out, in 2015, the city basically pushed its way into a private deal because new Mayor de Blasio had pledged to create and preserve something like 200,000 units of affordable housing.
The city didn't have much leverage, though, so it basically had to take whatever it could get. The resulting deal wasn't so good. The 5,000 units of "affordable" housing included 4,500 units in the 165% bracket that were so expensive, they were basically only $300 or so cheaper than market rents.
The remaining 500 units were a good deal, in the 80% AMI bracket. But of course they were so much fewer in number.
Plus, these for the most part were occupied units, so not a ton of movement.
Flash-forward to June 2019, when pro-tenant rent laws passed in Albany. All of a sudden, landlords couldn't put lots of money into vacant units to push them out of rent stabilization, which had been the business plan of both Tishman and Blackstone.
So when longtime tenants moved out, their unrenovated apartments couldn't be "flipped" and had to be re-rented for a reasonable price, under the law.
Blackstone claimed that these apartments should fall under the previous agreement with the city, with most of them re-rented in the 165% bracket and the rest under the 80%.
The city shot that down and said that these units had to be rented under the new law, i.e., for cheap.
Blackstone of course didn't like that, so the company started warehousing them.
That caused a furor when it was discovered, given Blackstone's deal with the city, and the city started looking into it.
Blackstone caved in a bit but said it didn't want to do a lottery for these "minimally renovated" units and would just put them on the website like any other apartment.
I guess this did happen, because someone reported to the Tenants Association that they were able to rent one of them. Of course, after that, I checked every morning for weeks to try to find one of these treasures for my daughter, but no luck. LOL
At some point after that, Blackstone apparently changed its mind and decided to put the minimally renovated units into a lottery. This is the situation we're in today.
There are still so many unanswered questions though! I said from day one that this lottery is wacked.
Thanks for this breakdown. I know a bit about rent stabilization and deregulation since my grandfather worked many years against it in Brooklyn. Don't get me wrong, I am grateful to be given an offer for one of these apartments, but things do seem wacked. I wish they made it more "affordable" for indviduals on the lower scale end of the scale, who may need it more.
I have a friend who was offered a two bedroom apt for this lottery and her number is 463. However, I have a lower number and haven't heard back after submitting my documents. So I'm super curious about this. Does anyone have insight on how that can happen?
”As Bugsy's post points out, in 2015, the city basically pushed its way into a private deal because new Mayor de Blasio had pledged to create and preserve something like 200,000 units of affordable housing.”
This isn't quite right/complete--Tishman Speyer lost litigation over failing to keep certain units affordable. Blackstone inherited that loss. Frankly, the city could probably have gotten more if deB were less of a patsy.
Yes, Tishman Speyer lost the "Roberts" lawsuit, which established that landlords who were collecting J-51 tax breaks were obligated to keep the apartments under rent stabilization for the life of the tax break. That was about 1,400 units.
But Tishman had been headed south long way before that point, and this judgment just pushed the complex into bankruptcy. Lots of entities lost money on that one, including pension funds.
As to whether Blackstone inherited that loss, I don't know. Yes, the 1,400 apartments rented for less than they had gone for, but that's a drop in the bucket when you are talking about 11,000 units.
I don't see how you arrive at the conclusion that the city could have gotten more. What was the city's leverage?
Cuseorange- Not everyone is selected. Log numbers are picked randomly then they start from the lowest number.
I don't agree with that. Your log number is your log number. If someone has a number lower than 463, that person should have been called already. They are up to number 1,000.
Cuseorange, what size apartment are you going for? There is a shortage of three-bedrooms. Also, are you currently a resident of the five boroughs? If not, you will be skipped over. Do you fit into the income bracket?
I have a friend who was offered a two bedroom apt for this lottery and her number is 463. However, I have a lower number and haven't heard back after submitting my documents. So I'm super curious about this. Does anyone have insight on how that can happen?
I don't agree with that. Your log number is your log number. If someone has a number lower than 463, that person should have been called already. They are up to number 1,000.
Cuseorange, what size apartment are you going for? There is a shortage of three-bedrooms. Also, are you currently a resident of the five boroughs? If not, you will be skipped over. Do you fit into the income bracket?
Hi there, yep, I live in manhattan and i am hoping for a 1 bedroom. And I also fit into the income bracket. Sent in all of my docs on June 2, they followed up to ask if I had a pet on July 1. Other than that, I haven't heard anything. I just want to know i should be alarmed or if for some reason they are processing two bedrooms first.
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