June 1, 2011 Leave a comment
In February 2010, Vantage Properties and then-Attorney General Andrew Cuomo reached a massive settlement over tenant harassment in rent regulated buildings. In the settlement with tenants and non-profit groups, Vantage paid $1M in damages, and agreed to implement new policies that would not unfairly force rent-regulated tenants out of their homes.
Recently seven properties, owned by Vantage, have gone on the market in Harlem. The properties are comprised of 362 units, only 53 of which have no rent restrictions. That means the overwhelming majority of units are home to large populations of long-term tenants, who, due to rent restrictions, pay lower than-market-rents. It also means that the portfolio income, to a potential buyer, is lower than some of the luxury buildings in the area. But Vantage, with the help of broker Massey Knackel, is aggressively marketing the properties and stressing their long term value. According to a listing in Real Alert, “although sometimes difficult, the conversion of rent-regulated apartments to market rates would significantly boost returns. The average rent in the portfolio is about 40% below the area’s market average.”
In light of this development, I’d like to pen a letter to the future buyer of this portfolio, whoever they may be:
Sometimes difficult. It is sometimes difficult. We’re really sorry that you have to work so hard. It can be really sometimes difficult to get long-term tenants to leave your new apartment building, especially when they have created a livelihood and raised families in their homes! It can be so difficult sometimes, that you have to settle with the NYS Attorney General for $1M! But don’t worry – Vantage has indicated that in the first year, if you work hard enough to make sure those rent-regulated, long term residents leave, you can generate as much as $5M in income. Predatory investing is a tough job, but someone’s gotta do it. And, where would we be without you? Without you, HPD might not get to spend so much of their time and energy making emergency repairs in neglected properties. Without you, New York City homeless shelters might stand empty and unused! Without you, tenants would have a shot at staying in safe and affordable housing. And without you, we wouldn’t all be at work over here. So keep it up, we like to be busy.