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Recent news of Kushner Companies’ filing of false documents outlining the residential makeup of their buildings in order to get construction permits has prompted a closer look at the practice, which, according to Politico, has been rampant among New York City property owners for years with few consequences. Last month the Department of Buildings fined Kushner Companies $210,000 for repeatedly submitting inaccurate paperwork. Tenant advocacy group Housing Rights Initiative (HRI) will release a report Monday outlining how landlords filed more than 10,000 deceptive PW1s (Plan/Work Applications) in the span of two and a half years.
“It appears to be very widespread, and it appears that the Department of Buildings has categorically failed to look at the data that landlords have been registering with it,” Aaron Carr, executive director of HRI, said. The group discovered Kushner’s repeated false paperwork through Carr’s investigation, which was conducted separately from the city’s.
Council Member Ritchie Torres, chair of the oversight and investigations committee, plans to announce legislation designed to address the “Kushner loophole”–the issue of property owners submitting falsified paperwork before renovating or adding to their properties. His bill would require that the city’s buildings and finance departments–the latter has a tally of rent-stabilized buildings that receive tax breaks–make more of an effort to coordinate their information.
The reasons for the misrepresentation are the subject of some dispute. According to tenant advocates, landlords would like to evade scrutiny and enforcement in order to harass rent-regulated tenants by means of disruptive construction work. The PW1 application for construction work asks if a building is occupied and whether it contains rent-stabilized tenants. For years property owners have routinely checked “no” when the answer was actually “yes.”
In one instance, the owner of a building on 10th Avenue in Hell’s Kitchen incorrectly reported to the buildings department that there were no rent-controlled or rent-stabilized tenants at that address when they filled out an application for construction last spring. Attorney Michael Terk, who represents two of the walk-up building’s tenants, sent the agency a letter saying that some of the units are, in fact, rent-stabilized. The agency approved the interior construction work the following week.
Terk believes the owners are trying to drive out his clients so they can make the building a more profitable business, minus rent-regulated tenants. The building is similar to many older walk-ups in pricey neighborhoods in a sizzling real estate environment: Landlords want to replace their rent-regulated tenants with market-rate renters.
According to a recent report from the Rent Guidelines Board, at least 290,958 New York City apartments have been taken out of rent stabilization since 1994, while only 143,446 units have been added.
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