Two more landlords accused of violating the city’s 421-a tax-abatement program
This week, Crain’s New York Business published a story which reported on the filing of two new lawsuits against the owners of 41-42 24th St., in Long Island City, and, 1003 Greene Ave., in Brooklyn. (The building at 41-42 24th St. (a/k/a QLIC) is owned by the World Wide Group, while North Brooklyn Management is the landlord for the building at 1003 Greene Ave.) Both owners are accused of enjoying the benefits of a tax break, while skirting their related legal obligations.
The buildings’ tenants argue that they are entitled to rent refunds, and rent-stabilized leases at reduced amounts, because instead of providing them with the protections of rent regulation (as 421-a landlords are required to do), World Wide Group and North Brooklyn Management offered concessions in the form of several months of free rent. That purportedly allowed the owners to register higher rents with the state’s Division of Housing and Community Renewal and the owners then used those higher recorded sums as the basis for future rent increases -- creating artificially inflated prices that did not reflect the concessions offered to the tenants.
“By employing this scheme, owners of these Brooklyn and Queens buildings essentially treated rent-stabilized tenants as free-market tenants,” said Newman Ferrara senior partner, Lucas A. Ferrara, who is also an adjunct professor at New York Law School. “It is blatantly obvious cheating.”
The 421a program, a/k/a Affordable New York, is set to expire June 15, and Gov. Kathy Hochul has outlined a replacement called 485W, or Affordable Neighborhoods for New Yorkers. But Hochul’s proposal has been widely panned by tenant advocates who are against any reincarnation of 421-a.“The 421-a tax program is a festering hotbed of fraud,” said Aaron Carr, founder and executive director of Housing Rights Initiative. “Instead of reforming this unreformable tax program, we should be reforming what can and should be reformed: New York City's inequitable, regressive and broken property tax system.”
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SOURCE (REQUIRES SUBSCRIPTION) - https://www.crainsnewyork.com/real-estate/pair-landlords-accused-violating-new-yorks-controversial-421-tax-break