Long-Term Upper East Side Tenants Sue Landlord Over Attempts to Destabilize Apartments, Push Tenants Out Through 421-A Tax Program

NEW YORK, NY (November 18) – Today, more than 40 tenants of Normandie Court buildings (205, 215, 225, and 235 East 95th Street) filed a lawsuit against MF Associates of New York LLC and Yorkville Plaza Associates LLC, — shell companies owned by Milstein Properties—to fight their attempts to deregulate their units, raise rents, and push tenants out.

Tenants, who have lived in the building for more than 35 years, accuse Milstein Properties of improperly deregulating their rent stabilized apartments without providing them with proper notice as required by New York’s 421-a Tax Incentive Program. The program, which previously allowed the deregulation of apartments after the tax abatement period ended, was amended by legislators so that buildings constructed after 2008 are not permitted to be deregulated for existing rent stabilized tenants. Tenants in the lawsuit say that since Milstein Properties failed to properly comply with the rules of the program when it was in effect in their building, that their apartments are still rent stabilized, and that they were illegally overcharged rent. Others in the building not in the lawsuit who moved in after 1999, however, continue to face huge rent increases and displacement.

Read the filed complaint here.

“I have been a resident of Normandie Court for over 30 years living in the same apartment. As a little person, I feel safe and protected in and around my community,” said Susan Oliveras, a member of Community Voices Heard and tenant of 205 East 95th Street. “If I had to move, I would become a target and that is the one thing that scares me. After being here for so many years, the Milsteins have decided to push us out now which is unacceptable. This hurts people with disabilities in the building as well as senior citizens and people who have lost family members to Covid-19. The Milsteins need to step up and do what’s right for the residents of Normandie Court.”

“I raised my child and grandchild in this building — it’s been our home for the past 25 years,” said Stephen Kramer, a tenant of 225 East 95th Street. “But the Milsteins have dramatically increased our rent over the past few years. Each year it gets worse and worse and I have to dip into my social security just to pay it. Soon I will have to dip into my pension. My health isn’t great and I’m worried that I won’t be able to afford the rent. Like so many people in the building, we thought this unit would be rent stabilized forever. So many people in the building are senior citizens, retired, or about to be retired. Where will they go? I hope the Milsteins do the right thing and show some compassion and stop trying to push us out.”

“Moderate- and low-income housing tenants share much in common, among them that we are beneficial to real estate developers until we are excess baggage and can be disposed of in favor of high rents,” said Tom Kirchmer, Community Voices Heard member and Normandie Court Tenant.

New York established the 421-a Tax Abatement program in 1971 to incentivize developers to build new multifamily residential housing in densely populated areas. The program included a provision that makes any building receiving the tax benefit rent stabilized for the duration of the benefit period, typically between 10 to 25 years. After the program expired, however, owners were permitted to deregulate the units provided that they gave tenants proper notice of the expiration date of the program in each and every one of their leases during the duration of the program. Legislators have since repeatedly amended the program to prevent the displacement of long-term tenants and keep units rent-stabilized after a building’s tax benefits expire, but tenants in buildings constructed before 2008 are not protected by these amendments.

Normandie Court was constructed under the 421-a tax benefit program in the mid-1980’s and received the benefit until it expired on June 30, 1999, according to the suit. Milstein Properties, however, began dramatically raising tenants’ rents after another tax benefit, the 80/20 program, expired between 2012 and 2015, after which Milstein Properties increased tenants’ rents by 10 percent per year, the maximum amount allowed by the 80/20 program, on top of the annual one to two percent rent increases allowed for rent stabilized apartments.

Now, more than 40 tenants are suing Milstein Properties alleging they are illegally trying to deregulate their buildings because they failed to properly inform tenants of the expiration of the 421-a tax benefit program, a requirement of the program. In addition to claims that their apartments should remain rent stabilized, tenants are also suing Milstein Properties for rent overcharges and damages.

At the same time, however, dozens of other tenants in the buildings not named in the lawsuit are also facing rent increases and displacement because they moved into Normandie Court after the 421-a tax benefit program expired in 1999 but before the 80/20 program ended in 2015 and are not protected by similar notice requirements. The majority of these tenants are senior citizens whose sole source of income is Social Security, have medical illnesses, and would face difficulty in finding another place to live if they are made to leave their apartments where they have built a home, raised their families, and contributed to their community.

“I have lived in this building for 33 years. Like other tenants, I am now facing astronomical rent increases and possible displacement,” said Maribeth Koutrakos-Perveau, a tenant of Normandie Court not named in the suit. “I moved into a two-bedroom apartment a few years back and even though management told me my unit would remain rent-stabilized, they are now going back on their word. They are trying to throw us out like we’re a dirty dishwater while giving new tenants Covid-19 rent breaks. What they’re doing is inhumane and unconscionable. So many of us have raised our children here. This is our home. This is our community. I hope the Milsteins do the right thing and stop trying to push us out. We deserve better than this.”

“The tenants in this lawsuit have lived in these buildings for decades and are facing sky-rocketing rents and the deregulation of their apartments all so the Milstein Properties can make a quick buck,” said Steven Heller, an attorney at Legal Services NYC representing the tenants. “Unfortunately they are just the latest victims of the City’s 421-a tax abatement program who more and more find themselves in danger of losing their homes once the tax benefits expire. But the tenants of Normandie Court are not going down without a fight. We are suing Milstein Properties for the 421a program’s requirements and we look forward to getting justice in court.”

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ABOUT COMMUNITY VOICES HEARD
Community Voices Heard (CVH) is a member-led, multi-racial organization principally comprised of women of color and low-income families in New York State. CVH tackles tough issues and builds power to secure racial, social and economic justice for all New Yorkers. Through grassroots organizing, leadership development, policy changes, and creating new models of direct democracy CVH is creating a truly equitable New York State.

ABOUT MANHATTAN LEGAL SERVICES’ TENANT RIGHTS COALITION
Manhattan Legal Services’ Tenant Rights Coalition, a program of Legal Services NYC, fights poverty and seeks racial, social, and economic justice for low-income New Yorkers. For 50 years, Manhattan Legal Services has challenged systemic injustice and helped clients meet basic needs for housing, access to high-quality education, health care, family stability, and income and economic security. Legal Services NYC is the largest civil legal services provider in the country, with neighborhood-based offices across all five boroughs helping more than 110,000 New Yorkers annually. The work of Manhattan Legal Services’ Tenant Rights Coalition is funded by NYC Human Resources Administration’s Anti-Harassment and Tenant Protection program.