Pondering the Future of StuyTown

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In a decision that could reverberate throughout New York’s sprawling rental market, a judge ruled today that the owner of NYC’s enormous Stuyvesant Town and Peter Cooper Village apartment complexes will have to pay back some $200 million to tenants.

In our July/August issue, Adam Matthews reported on a trend known as “predatory equity,” wherein private equity partnerships would buy undervalued housing developments, take out big loans against their value—including a good chunk of change for themselves—and then fix and flip the properties. In doing so, the partnerships would bleed the equity out of affordable developments and put them at risk of foreclosure.

In that case, a partnership led by businessman Larry Gluck had purchased and then refinanced Harlem’s Riverton Houses, intending to remodel units with pretty kitchen and bath fixtures and then jack up rents on rent-stabilized tenants. But when the market tanked, Riverton ended up mired in debt. Dina Levy, a tenant organizer with New York City’s Urban Homesteading Assistance Board, told Matthews that such deals had left roughly 70,000 affordable units overleveraged.

The case reported by the Times this week involved a partnership comprised of BlackRock and Tishman Speyer Properties, which purchased the property in 2006. Metropolitan Life, the former owner, was also named. The new owners took a big hit in the downturn; more than half of their development’s $5.4 million sticker price has evaporated into thin air. And now it appears they’ll have to pay back rent to boot.

Rent control in New York is a tricky thing; according to the Times:

Under state law, landlords can deregulate an apartment when the rent for a vacant unit reaches $2,000 or more per month, or the rent is above $2,000 and a tenant’s household income is above $175,000 for two consecutive years.

Still, it’s estimated that the decision could affect some 80,000 apartments in New York City. 

 

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

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