Predatory equity takes place when landlords buy buildings based on the “projected” rents of a building rather than the current ones, subsequently paying huge amounts of money for rent stabilized affordable housing. The only way the finances will work is by forcing out long term residents and bringing in higher paying ones. This process, also known as gentrification, is taking place in rent stabilized, affordable housing all over New York City.
Predatory landlords do everything in their power to get long terms residents to leave their apartments such as ignoring tenant rights, decreasing basic services, or offering buy-outs. While asking tenants to accept money to leave isn’t illegal, it almost always is against the tenants’ interests. (Check out our one-pager on how to decide whether or not to accept a buy-out) One super at 725 4th Ave in South Slope, Brooklyn spoke with the Gothamist about his experience asking tenants to accept buy-outs to move:
“He said he was hired with a mandate to clean up the building,” so he did. It was his job.
After the fourth of fifth [buy-out], Duarte said, “I felt like I was doing wrong,” but people kept coming, and if he wanted to keep his job and support his family, he had to continue paying out. Twenty families left in the first round…Some tell Duarte that taking a buyout was the biggest mistake of their lives. He is sympathetic, but said, “I never pushed anybody out. They asked me, and I made an offer. I hoped they didn’t take it.
Long term residents living in Crown Heights, Bushwick, and other quickly gentrifying neighborhoods have their own stories of being offered buy-outs. Most often than not, tenants who accept money to leave will have a hard time finding a new apartment in the neighborhood in a similar price range. Families and communities are uprooted. Furthermore, each time a family leaves, the price of an apartment unit increases, and the precious stock of affordable housing diminishes.
This crisis is not just a trendy Brooklyn one. At 836 Faile St. in Hunts Point, tenants have been offered $3,000 to move out of their rent stabilized homes! (Likely this is to produce a cluster-site homeless shelter and allow private developers to profit off of evicting long term residents and exploiting the homeless crisis).
The more tenants understand their rights and the pros and cons of accepting buy-outs, the more they are determined to fight for their homes. To learn about how to fight back against predatory landlords, come out to the Crown Heights Tenant Union meetings every 3rd Thursday of the month at 7:00 pm at the Center for Nursing the Rehabilitation.