Sen. Chuck Schumer has his dagger out again. This time he’s going to try to plunge it into the heart — or the back — of the owners of Stuyvesant Town, and perhaps of New York taxpayers and indeed the city housing market.
Stuy-Town and Peter Cooper Village are 11,000 middle-class, mostly rent-stabilized apartments on 80 acres just off the FDR Drive north of 14th Street.
The Metropolitan Life Insurance Co. built the complex at the end of World War II. It was a visionary development to help, among others, returning veterans.
It had bitter controversies: African-American families were banned; neighbors feared it would be a walled enclave. Yet it got built and turned into one of the best deals in the city for middle-class New Yorkers.
The apartments themselves are solid, and the grounds are filled with trees and gardens.
Met Life sold the complex for $5.4 billion in 2006, in one of the biggest real-estate deals ever. No sooner did buyers Tishman Speyer and Black Rock close, though, than the Great Recession was upon us.
Soon Stuy-Town’s new owners couldn’t pay their debts. When they defaulted in 2010, the property went to the bondholders. Eventually it was taken over by CW Capital Asset Management, which is now preparing to sell.
The idea of these big real-estate companies owning Stuy-Town makes the tenants nervous. And why not?
If you’ve got one of the best deals in town, you’re not going to welcome change. Their fear is that rents are going to go up as apartments turn over and the whole place will change.
So for years the tenants have been trying to buy the property. It’s no secret: They make their case on their Web site. The problem is that there are big real-estate investors out there who smell the potential to make big money, another all-American ambition.
Potential buyers see a chance to make money under the laws that allow gradual decontrol of Stuy-Town rents.
Tenants want to keep their great deal, no matter that those laws were what allowed the project to go up in the first place. Some units are covered by tax abatements that expire five years hence.
So on Friday the tenants, sensing growing danger, staged a rally at City Hall. Schumer showed up, as did a raft of City Council members and other politicians.
It’s no small thing that the politicians are siding with the tenants.
Schumer has gone so far as to wrest a promise from the big government mortgage lenders, Freddie Mac and Fannie Mae, that they won’t participate in any Stuy-Town deal that isn’t acceptable to the renters and the city.
“Without Fannie and Freddie’s backing, it will be very hard for one of these rapacious lenders to come in and change the whole way Stuy-Town is,” Capital New York quoted Schumer as telling the rally Friday.
“That cuts off the oxygen to a lot of the bidders out there, who do not have affordable housing in mind,” is how Councilman Daniel Garodnick, who lives in Peter Cooper Village, put it.
This fight, though, has more angles than the Hope Diamond. Schumer’s move may be great for the tenants of Stuy-Town. It may not be so great for the rest of the city, including middle-class taxpayers who don’t live in Stuy-Town.
It seems to be the plan that, in return for a commitment to keep rents down, the owners of Stuy-Town and Peter Cooper would be offered tax breaks for decades. How can that mean anything but pressure for tax increases from the rest of New York?
And what of the property-rights question? Shouldn’t the owner of real estate in this, or any, city be able to get the best price possible for his property, without his own elected officials operating against him?
It’s certainly in the interests of the rest of the city for real-estate investors to be welcome here.
If we’re ever going to have cheaper housing, we need them to finance the building of a lot more housing.
No one’s talking about evicting Stuy-Town tenants, just letting apartments that become vacant there move to market rates, so we can encourage the building of more apartments.
If Schumer and de Blasio mug the owners of Stuy-Town, how can future investors trust government to be a neutral arbiter in favor of equal application of the laws?
And tax breaks only go so far. Without market rents, what will the owners do if the place starts to run down? If the development starts to decay, maybe they’ll rename it Schumerville.