Beth Rosner and Stuyvesant Town go way back—she was born there, after all. Her family moved out when she was a baby, but she later moved back into a rent-stabilized apartment while working as a theater agent in the city. Finally, returning to New York in 2003 after a stint overseas, she took a market-rate apartment in the approximately 25,000-tenant Stuy Town/Peter Cooper Village complex, wanting her young daughter to grow up in the local school district.
“For me, it’s been the best thing about New York,” Ms. Rosner, 48, said on the phone from her apartment. “It’s a neighborhood I know and love.”
Soon, new landlord Tishman Speyer started raising the rent on her one-bedroom. Now, she says, she’s paying $1,000 per month more than when she moved back in (she declined to give a hard number); she’d rather keep it up than move and take her daughter out of school. In early 2007, she signed on to a class action lawsuit that scored a stunning win last Thursday, when a four-judge panel ruled that the landlord must not only stop de-stabilizing units, but pay some tenants four years worth of back rent that the court determined was illegally charged.
“I’m really happy to be part of something that’s fighting on behalf of middle-class New York,” Ms. Rosner said, recalling her friends who have had to leave the city in recent years because of the rising cost of living. “This decision to me is a huge win for us.”
The nine plaintiffs in Roberts v. Tishman Speyer Properties, L.P. are not an attention-seeking bunch. Although the tenants association and one, Amy Roberts, approached the law firm of Wolf Haldenstein Adler Freeman & Herz nearly three years ago to file the suit, the plaintiffs have never met with each other in person (“I have no idea who these people are,” Ms. Rosner said). After repeated calls and emails to members of the group, only two agreed to speak with The Observer on the record. One woman said she had put the suit so far out of mind over the last two years that she didn’t want to speak publicly, although she had never expected it to turn out like this.
This—a far-reaching decision that could cost Tishman Speyer $200 million and prompt copycat litigation across the city—is momentous, a legal victory for potentially thousands of rent-stabilized tenants. For some of those who helped make it happen, the news is bittersweet.
Tom Shamy, a jewelry designer in Midtown, couldn’t hang on. In 2003, he and his future wife moved into a spacious two-bedroom, paying market rate of $2,850 (the previous rent-stabilized tenant had been paying $1,400). Soon, they downsized to save some cash, moving into a $2,100 one-bedroom. In December of 2006, Mr. Shamy was notified that renewing his lease would cost $800 more per month; he had one month to accept it or leave. So they did—he and his now-pregnant wife moved to the Lower East Side, and currently reside in upper Manhattan.
“It seemed clear to me that the landlords were trying to eat out of both hands,” he said.
“I believe strongly in free markets, and I think that New York City’s current rent-stabilization laws impede too greatly on the free-market rental system. But until that system and the laws are equitably changed for both tenants and landlords, the rules must be followed.”
IN THE SPRAWLING DEVELOPMENT’S beatific outdoor spaces on Sunday afternoon, with kids and dogs playing everywhere, the mood was jubilant. News of the decision spread like wildfire, and even those who won’t be affected were glad to see the unpopular Tishman Speyer go down.
A pair of elderly women chatting on a park bench looked delighted for the chance to talk about their landlord’s misdeeds. “They expect all of us to drop dead suddenly,” said Marcia Robinson, 72, a resident for over two decades.
Too bad for Tishman Speyer, said Toni Matijevich, 65. “They call this Shangri-La, because everyone here lives forever.”
Lynn and Steve Warner have been living in Stuy Town for 13 years, and lately have had their own run-ins with the landlord. Tishman Speyer accused them of using their apartment as a second residence, and the couple hired a lawyer to fight eviction.
“I don’t think that they made a good business decision [in buying the development],” said Lynn, 68. “They thought that things were going to happen that didn’t happen.”
Around Stuyvesant Town’s central oval, improvements are obvious. But, the Warners said, they’re clearly aimed toward attracting market-rate tenants; chic lounges in the ground floors require extra membership fees, and stood mostly empty.
Are Tishman Speyer’s rent-jacking days at an end? That depends, said the plaintiffs attorney Alexander Schmidt, on how much more risk the landlord wants to take. If Tishman Speyer continues to increase rates and de-stabilize apartments while appealing the decision, and the appeal fails, it could be liable for three times the back rent it would otherwise owe.
Mr. Schmidt also doubts that the landlord can simply choose to opt out of the J-51 tax benefit program that prevents it from moving stabilized apartments to market rate, which might be an attractive option: the development accrued $25.5 million in tax abatements between 1992 and 2006, which is small change compared to the amount Tishman Speyer may have to pay under last week’s decision.
In the mean time, Mr. Schmidt wants everyone affected to sign on to the suit themselves. “What we would like to see happen,” he said, “would be that the landlord agrees to reimburse all the tenants and adjust the rents going forward and have a claims resolution process on a tenant by tenant basis.”