Note: This is also a Greed File.
Excerpt
Due to an error by state officials, rent limits on tens of thousands of New York City apartments were improperly removed. Now, 20 years later, the state is relying on landlords to fix that problem. What could go wrong?
In February of 2015, Lilian Piedra received a letter with devastating news: Her landlord was jacking up the rent for her four-bedroom apartment in Manhattan’s Washington Heights from $2,100 a month to $3,500.
The notice did not say she faced eviction, but Piedra immediately understood that’s what it meant. She and her husband were already struggling to raise three young children on her salary as a bank customer service representative and his as a parking garage manager.
“As soon as I received that letter I was crying for a whole week. Every single day I was crying, even at work,” she recalled.
The prospect of much higher rent touched off months of sleepless nights for the Piedra family as they desperately searched for somewhere else to live. The only apartment she found nearby was half the size for about the same price. Her brother offered to let the family move into his house on Long Island, but Piedra knew that cramming nine people into a three-bedroom house was way too crowded.
“I saw myself living in a shelter,” Piedra said. She ultimately refused to pay the higher rent and, within days, the landlord moved to evict her.
But just before a June 2015 hearing on the family’s eviction, their lawyer made a startling discovery. Piedra was among tens of thousands of people who had been improperly excluded from a program that protects tenants from New York City’s exploding housing costs. Raising her rent 67 percent was, in fact, illegal. So was the resulting eviction. She ended up staying in her place for $2,100 a month.
Others have not been nearly as fortunate.
The law that protected Piedra — rent stabilization — was tied to a tax break a previous owner had received for renovating the building. Under a program created by a state law, owners benefiting from the taxpayer subsidy are obligated to limit annual rent increases to modest levels set by the city.
But due to a series of actions — and inactions — by a pivotal state regulator, the benefits of this program vanished for many New York City tenants.
Over two decades, owners of an estimated 50,000 apartments pocketed the tax break while charging market rents. Tenants who couldn’t pay were forced out, deepening a shortage of affordable housing which Mayor Bill de Blasio acknowledges is a “crisis.”
ProPublica has been examining what New York City gets for an estimated $1.6 billion in tax breaks it has granted to property owners and developers.
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