When Blackstone and Ivanhoé Cambridge bought Stuy Town for $5.3 billion in 2015, they reached a deal with the city that would allow them to deregulate and raise rents on 6,200 rent-regulated units beginning in July 2020. On Wednesday, tenants filed a lawsuit to block Blackstone from going forward with the rent hikes, The Real Deal reports. As part of the original agreement, the city allowed Blackstone to cap rent increases at 5 percent each year, which is considerably more than the 1.5 percent outlined in last year’s new rent laws. The lawsuit argues that this conflict should require Blackstone to adjust the agreement in accordance with the new law.
Blackstone Group has apparently shifted course and is now renovating and leasing all vacant units at Stuyvesant Town. This comes after the landlord faced criticism following revelations that the company has been keeping 20 to 50 percent of rent-regulated apartments at Stuy Town empty in reaction to the city’s new rent laws. It didn’t take long for authorities, including Mayor Bill de Blasio, to express concern over the findings. On Friday, a spokesperson for Blackstone told Gothamist, “We are renovating and leasing all vacant units, and we will continue to fulfill our commitment to voluntarily preserve 5,000 affordable apartments.”
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Sources told The Real Deal that Blackstone Group is keeping 20 to 50 rent-stabilized apartments at Stuyvesant Town and Peter Cooper Village vacant, following state rent law changes that will impede the landlord’s ability to raise rents through renovations. 6sqft reported last month that Blackstone—who purchased the massive 11,000+ unit apartment complex in partnership with Ivanhoe Cambridge for $5.5 billion in 2015—had stopped all non-urgent renovations and other planned work at Stuy Town and Peter Cooper Village as a result of the new rent laws.
Via StuyTown Property Services
As 6sqft reported last month, the state recently passed legislation containing landmark changes to rent regulations that were set to expire, significantly strengthening New York’s rent laws and tenant protections. Private-equity giant Blackstone Group, who purchased the massive 11,000+ unit Stuyvesant Town and Peter Cooper Village apartment complex for $5.5 billion in 2015, is among landlords who say the new rent regs will keep them from making important property upgrades, Crain’s reports. Blackstone says it is pausing apartment renovations and other planned work at Stuy Town and Peter Cooper Village as a result of rule changes which dramatically limit the allowable rent increases landlords can charge as a result of renovations and repairs.