Mega-Landlord Bought Rent-Controlled Apartments Then Forced Tenants Out of Them
A mega-landlord in New York City bought a series of small, rent-controlled apartment buildings in gentrifying Brooklyn neighborhoods then systematically forced tenants out of them so they could jack up the rents, according to a settlement with New York State's Attorney General.
The finding comes on the heels of a Congressional report that found four different huge corporate landlords spent the pandemic making lives miserable for their tenants and evicting them at high rates. In Brooklyn, a company called Ink Property Group bought dozens of rent-stabilized buildings in low-income communities of color with the intention of illegally deregulating affordable housing for profit," the Attorney General's office noted. Through a variety of illegal activities, Ink forced out rent-stabilized tenants so their units could be offered at market rate."
The landlords just reached a settlement with the NYC attorney general where it would pay $1.75 million to maintain sustainable housing in the city and $400,000 to the tenants it had screwed over, which is notable because any apartment building in the Brooklyn neighborhoods Ink Property Group bought in would cost several times the amount of the fine. As New Yorkers faced soaring rents and struggled to find affordable housing, Ink tried to get rich quick by preying on vulnerable tenants and their families," Attorney General Letitia James said in a press release. Lying and cutting corners to evade rent stabilization is one of the oldest tricks of the trade, but Ink's years of exploiting our hardworking neighbors without consequences end here."
The Ink scheme was simple. It would buy up apartment buildings with rent controlled apartments, try to buy out the majority of tenants from their leases, and then harass tenants until they moved. After Ink bought a building it would start to offer tenants buyouts. If the tenant refused, they wouldn't let up. They even paid a commission of between $2,500 to $5,000 to employees who secured tenant buyouts, according to the settlement.
A few people in every building would break, taking a buyout and moving on. Then Ink would move in, renovate the apartments and rent them out at market rate (Broadly speaking, rent stabilization laws in New York City make it possible for landlords to jack up the rent if they can make the apartment vacant, then renovate it. Finding a rent-stabilized apartment in New York City is a little bit like hitting the lottery, and people who live in them often like to hold onto them.)
To deal with people who wouldn't move out, the landlords would let the buildings devolve into a state of disrepair, according to court records. In 2019, residents told the Brooklyn Eagle that they'd found mold and rats in some of the empty apartments owned by Ink.
The number of Housing Maintenance Code violations across the Ink Property Group portfolio was and is exceedingly high," court documents said. Ink averaged 26 violations per building during the time the AG investigated them. This included 115 Class C violations, or immediately hazardous violations for conditions such as defective window guards, lead-based paint, and locked cellar doors, blocking access to buildings' heating systems."
In one example, the landlords bought a six-unit building in Brooklyn that was fully rent-stabilized. The legal regulated rents for those apartments ranged from $911.75 to $1,099 per month," according to court documents. The landlords bought out 5 of the 6 tenets, renovated the apartments, then brought in new tenants and charged them $2,200. All of the leases were unregulated leases, which did not inform tenants of their rights under Rent Stabilization."
According to the AG, the landlords were so concerned with renovating vacant units to bring in new high paying tenants that they often failed to do basic maintenance and repairs for their existing tenants. Many of the buildings in the Ink Property Group portfolio have had their boilers fail, leaving tenants without heat in winter months," court documents said.
The AG painted a picture of landlords who demolished buildings with reckless abandon and little care for the people who lived in the buildings. The city had told Ink to stop work on several of its buildings where it did plumbing and electrical work without getting the right permits. This was preceded by the demolition of bathrooms in two occupied apartments in the building, temporarily displacing the tenants who lived there," court documents said. The New York City Department of Housing Preservation and Development completed the repairs necessary to allow the return of displaced tenants."