Today the New York Times reported the settlement of the class action lawsuit between rent-regulated tenants and the Pinnacle Group. Pinnacle agreed to pay $2.5 million to legal and tenant rights groups to assist Pinnacle tenants to make claims for damages.
The tenants’ case was based on claims of widespread harassment, evictions and illegal rent increases. This is all classic Predatory Equity behavior where owners try to push the current tenants out in order to get newer tenants to pay higher rents.
While $2.5 million is a lot of money, it’s impossible to imagine the actual damage that Pinnacle has inflicted on their residents and buildings. If Pinnacle is guilty of Predatory practices, considering they own 15,000 apartments then there are possibly many residents out there who have been harassed or displaced, even if every one seeks damages, how can one put a cash value on being forced out of your home? Also, another consequence of predatory equity buildings is deterioration and divestment, and who can say what physical damage has come upon these properties.
I know in my experience organizing in Botanical Square, a Pinnacle owned building, tenants complained of poor conditions and improper maintenance. New York Community Bank holds the loan on that particular building, and this was actually among the first group of buildings where we tried to reach out to NYCB to take action to ensure it’s buildings are properly maintained, but it certainly wasn’t the last.
In my opinion, while $2.5 million may not reflect the true damage caused by predatory equity, it is good to see someone lay out some cash for these bad practices.