Gotham Gazette Gotham Gazette is an online publication covering New York policy and politics as well as news on public safety, transportation, education, finance and more. http://www.gothamgazette.com/component/tags/tag/flushing 2018-11-13T02:46:31+00:00 Webmaster webmaster@gothamgazette.com Protecting the Soul of Flushing, and Beyond 2016-06-22T04:00:00+00:00 2016-06-22T04:00:00+00:00 http://www.gothamgazette.com/130-opinion/6407-protecting-the-soul-of-flushing-beyond Amanda Sherwin <p><span dir="ltr"><span style="color: black; font-family: Calibri,Arial,Helvetica,sans-serif; font-size: x-small;"><span style="font-size: 16px;"><img src="http://www.gothamgazette.com/images/graphics/2015/soul-flushing.jpg" alt="soul flushing" width="600" height="338" />&nbsp;</span></span></span></p> <p><span dir="ltr"><span style="color: black; font-family: Calibri,Arial,Helvetica,sans-serif; font-size: x-small;"><span style="font-size: 16px;"><span style="font-size: 10pt;">132-40 Sanford Ave in Flushing, a Treetop Development-owned rent-stabilized building</span></span></span><span style="color: black; font-family: Calibri,Arial,Helvetica,sans-serif; font-size: x-small;"><span style="font-size: 16px;"><br /> </span></span></span></p> <hr /> <p>After more than a year of intensive community engagement, Flushing&rsquo;s&nbsp;<a href="http://citylimits.org/2016/02/09/plan-to-rezone-flushing-west-flies-under-the-radar/" target="_blank">"under the radar" </a>rezoning study of an 11-block waterfront area dubbed Flushing West was <a href="http://www.crainsnewyork.com/article/20160531/REAL_ESTATE/160539972/city-withdraws-plan-to-create-new-queens-neighborhood" target="_blank">suddenly withdrawn by the Department of City Planning (DCP)</a>. The decision was prompted by a letter from City Council Member Peter Koo, who outlined a comprehensive list of outstanding concerns including &ldquo;that the numbers don&rsquo;t add up&rdquo; for developers who perceive that the rezoning amounts to a &ldquo;downzoning.&rdquo;</p> <p>DCP&rsquo;s decision to pause the study elicited <a href="http://qns.com/story/2016/06/03/calls-for-affordable-flushing-housing-remain-in-aftermath-of-mayors-defeat-of-flushing-west-plan/" target="_blank">mixed reactions</a>, in part because the rezoning study did spotlight the heavy infrastructural strain of Flushing&rsquo;s white hot real estate market and unified multiple community stakeholders to protect the neighborhood&rsquo;s rapidly diminishing affordable housing and advocate for equitable community development.</p> <p>Mayor Bill de Blasio recently penned a <a href="http://www.huffingtonpost.com/bill-de-blasio/the-soul-of-our-city_b_10307708.html" target="_blank">Huffington Post column</a> proposing that in the current market climate of hyper-gentrification, the city&rsquo;s existential identity is defined by residents of public housing and rent-stabilized apartments. As the mayor opines, &ldquo;It&rsquo;s in protecting these people that we protect the soul of our neighborhoods.&rdquo; I dare say the soul of Flushing has been under attack and protecting its diverse, working-class residents is long overdue.</p> <p>Like many neighborhoods of color, affordable housing in Flushing is threatened by predatory equity investment. Investors target &ldquo;underperforming&rdquo; and &ldquo;undervalued&rdquo; multi-family residential buildings in strategic markets (i.e., &ldquo;up and coming&rdquo; and gentrifying areas). They count on capturing unrealized market value through replacing current tenants with those that can afford to pay higher rents or reselling properties at huge profits after making nominal capital improvements. Treetop Development LLC, one of the largest real estate companies in the New York City area, has a business model based on these &ldquo;multi-faceted&rdquo; strategies, to the detriment of communities.</p> <p>Treetop&rsquo;s <a href="http://treetopdev.com/profile.html" target="_blank">online profile</a> notes, &ldquo;We actively acquire and transform existing rental properties in the region by modernizing living spaces, common areas and building systems before returning them to market. We are well-known for creating cutting-edge projects in neighborhoods coming up as desirable new addresses.&rdquo; Since its establishment in 2005, Treetop Development LLC has been one of the region&rsquo;s most active investors in multi-family properties including federally subsidized, project-based Section 8 developments and rent-regulated buildings.</p> <p>In the past few years, Treetop has acquired and flipped numerous rent-stabilized buildings, generating huge profits. In July 2013, Treetop purchased <a href="http://treetopdev.com/projects.php?project=%27west-125th-st" target="_blank">17-27 West 125th Street</a>, a 50-unit rent-stabilized building in Harlem for $13.6 million. According to Treetop&rsquo;s website, &ldquo;17-27 West 125th Street boasts large apartments, which will be renovated upon vacancy to include new wide plank hardwood flooring, modern and chic kitchens and bathrooms, and stainless steel appliances.&rdquo; After spending <a href="http://newyork.citybizlist.com/article/293644/treetop-development-completes-306-million-sale-of-50-unit-apartment-building-at-17-west-125th-street" target="_blank">only $1.5 million on &ldquo;signature&rdquo; capital improvements</a>, Treetop sold the building to Thor Equities for a whopping $30.6 million in August 2015 (a $17 million gross profit after 25 months of ownership).</p> <p>Similarly in 2014, Treetop acquired a portfolio of six rent-stabilized buildings with a total of 139 rental and seven retail units in Washington Heights for $23 million. These properties, referred to as the&nbsp;<a href="http://therealdeal.com/2015/12/14/hillcrest-buys-washington-heights-portfolio-from-treetop/" target="_blank">"Columbia Audubon"</a> portfolio due to their proximity to Columbia University Hospital and Audubon Avenue, were sold a little over a year later, in December 2015, for $36 million to a group of private investors.</p> <p>In describing Treetop&rsquo;s strategy to purchase and flip a <a href="http://therealdeal.com/2015/08/27/bcbs-berger-excelsiors-miller-launch-jv/" target="_blank">multi-family portfolio</a> in Central Harlem, co-principal Adam Mermelstein explained, &ldquo;This portfolio is the perfect example of how picking the neighborhoods, identifying underutilized properties, effective management and recognizing the right time to buy and sell can pay tremendous dividends.&rdquo; The portfolio purchased by Treetop for $22 million in 2013 was comprised of 12 five-story walk-up apartments and included rent-stabilized buildings on St. Nicholas Ave and Frederick Douglass Blvd. Two years later, Treetop sold the portfolio to a newly formed investment firm for $35 million, generating a profit equal to 59% of Treetop&rsquo;s original purchase price.</p> <p>Treetop Development LLC was featured in <a href="http://www.crainsnewyork.com/article/20151204/REAL_ESTATE/151209927/new-jersey-firm-bets-on-queens-buys-138-8-million-apartment-portfolio-in-flushing-and-elmhurst" target="_blank">Crain&rsquo;s New York Business</a> for its enormous $138.8 million acquisition of eight rent-stabilized buildings in Queens representing the county&rsquo;s largest multi-family transaction in 2015. Seven of the rent-stabilized buildings (totaling 489 apartments) are clustered in a three-block area near downtown Flushing and one building is in Elmhurst. Treetop wasted no time in making cosmetic upgrades to common areas such as lobbies and hallways, and renovating vacated apartments. A recent visit and conversation with a long-time, rent-stabilized tenant in one of Treetop&rsquo;s Flushing buildings indicated that the common areas had already undergone capital improvements which permitted the prior landlord to increase rents.</p> <p>Since Treetop&rsquo;s acquisition, tenants have reported <a href="http://a810-bisweb.nyc.gov/bisweb/ComplaintsByAddressServlet?requestid=1&amp;allbin=4114214" target="_blank">construction-related disruption and dust</a>, spotty heat and hot water, and a sudden increase in vacant apartments. City Council Member Koo&rsquo;s office has submitted a list of complaints pertaining to these buildings to 311.</p> <p>This past year has been very busy for Treetop as it expands its extensive portfolio of rent-stabilized buildings in <a href="http://therealdeal.com/2015/05/11/treetop-pays-38m-for-8-building-manhattan-leg-of-three-borough-pool/" target="_blank">Harlem</a> and Flushing, sold <a href="http://arielpa.nyc/press-release/ariel-property-advisors-assists-treetop-development-in-acquisition-of-mott-haven-development-site" target="_blank">&ldquo;select holdings at high profit margins,&rdquo;</a> and refinanced some properties through mortgage consolidation, as in the case of four Brooklyn properties including 188 South 3rd St., a rent-stabilized building in Southside Williamsburg. Among its early acquisitions in New York City&rsquo;s multi-family market, Treetop paid a little over $5 million in August 2006 for the 41-unit building, intending to <a href="http://50.56.218.160/archive/category.php?category_id=5&amp;id=9837" target="_blank">convert the apartments into upscale rentals</a>. A few months later, <a href="http://www.nypress.com/rent-strike/" target="_blank">various publications</a> including the Metropolitan Council for Housing&rsquo;s newsletter detailed the reasons why Treetop&rsquo;s Mermelstein was named the city&rsquo;s <a href="http://metcouncilonhousing.org/sites/default/files/back_issues/2007/tenant_inquilino_2007_february.pdf" target="_blank">&ldquo;most abusive landlord&rdquo;</a> by a group of tenant advocacy organizations.</p> <p>Treetop&rsquo;s 188 South 3rd St. was in the news again in July 2013 when a <a href="https://www.dnainfo.com/new-york/20130718/williamsburg/massive-fire-torches-top-floor-of-williamsburg-building" target="_blank">three-alarm fire</a> erupted between the ceiling of the top floor and the roof. Over one hundred firefighters responded to the early morning blaze that took approximately two hours to extinguish. <a href="http://brooklyn.news12.com/news/3-alarm-fire-breaks-out-in-williamsburg-apartment-building-on-south-3rd-street-1.5716072" target="_blank">Several tenants were interviewed</a> noting long-standing electrical problems and non-professional repairs. Charlin Ramos said to Brooklyn News 12, &ldquo;I knew this was going to happen, I predicted it was going to happen.&rdquo; Jacqueline Jimenez claimed Treetop ignored numerous calls from tenants. Extensive damage required many tenants to vacate and according to the <a href="http://a810-bisweb.nyc.gov/bisweb/PropertyProfileOverviewServlet?boro=3&amp;houseno=188&amp;street=south%203%20street&amp;requestid=0&amp;s=A03C41B885B461E4F46BD08866A7430E" target="_blank">Department of Buildings</a>, the current status of 188 South 3rd St. is that a partial vacate order remains in effect as well as civil penalties and an outstanding <a href="http://www1.nyc.gov/assets/buildings/rules/1_RCNY_102-01.pdf" target="_blank">Class 1 violation</a> defined as &ldquo;immediately hazardous.&rdquo;</p> <p>The same weekend that Mayor de Blasio&rsquo;s column was published by Huffington Post, the New York Times published an opinion piece titled, <a href="http://www.nytimes.com/2016/06/05/opinion/sunday/how-to-force-out-rent-controlled-tenants.html?smid=fb-share&amp;_r=0" target="_blank">How to Force Out Rent-Controlled Tenants</a>. The timing and message of these articles underscore the precarity of rent-regulated housing that has been affordable to working-class New Yorkers. Key forces destabilizing the city&rsquo;s neighborhoods, especially its communities of color, are the tactics deployed by predatory equity investors such as Treetop Development LLC. While the Flushing West rezoning study provided an opportunity to highlight the outstanding need for affordable housing, the current state of the neighborhood&rsquo;s rent-stabilized housing requires immediate action to protect long-time tenants, or as the mayor would describe them, the soul of Flushing.</p> <p>In early May, the Flushing West Community Alliance (FRCA) released a <a href="http://minkwon.org/downloads/FRCA_Flushing_White_Paper_28apr16.pdf" target="_blank">comprehensive research report</a> that includes anti-harassment and anti-displacement measures. Based on numerous discussions with rent-stabilized tenants, FRCA recommends that landlords with a history of tenant harassment should not be able to receive permits necessary for renovations that will enable them to increase rents. At minimum, the <a href="http://bradlander.nyc/news/updates/city-council-ramps-up-efforts-to-preserve-existing-housing-for-low-income-new-yorkers" target="_blank">four bills</a> introduced to the New York City Council earlier this year, including Brad Lander&rsquo;s &ldquo;Certificate of No Harassment,&rdquo; should be acted on immediately. Although the Flushing West rezoning process is temporarily on hold, speculative real estate market conditions have not abated which means rent stabilized tenants need strengthened protections now.</p> <p>***<br />Tarry Hum is a professor at the City University of New York and author of <a href="https://www.amazon.com/Making-Global-Immigrant-Neighborhood-Brooklyns/dp/143991091X" target="_blank">Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park</a>.</p> <p>

***
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</p>
<p><span dir="ltr"><span style="color: black; font-family: Calibri,Arial,Helvetica,sans-serif; font-size: x-small;"><span style="font-size: 16px;"><img src="http://www.gothamgazette.com/images/graphics/2015/soul-flushing.jpg" alt="soul flushing" width="600" height="338" />&nbsp;</span></span></span></p> <p><span dir="ltr"><span style="color: black; font-family: Calibri,Arial,Helvetica,sans-serif; font-size: x-small;"><span style="font-size: 16px;"><span style="font-size: 10pt;">132-40 Sanford Ave in Flushing, a Treetop Development-owned rent-stabilized building</span></span></span><span style="color: black; font-family: Calibri,Arial,Helvetica,sans-serif; font-size: x-small;"><span style="font-size: 16px;"><br /> </span></span></span></p> <hr /> <p>After more than a year of intensive community engagement, Flushing&rsquo;s&nbsp;<a href="http://citylimits.org/2016/02/09/plan-to-rezone-flushing-west-flies-under-the-radar/" target="_blank">"under the radar" </a>rezoning study of an 11-block waterfront area dubbed Flushing West was <a href="http://www.crainsnewyork.com/article/20160531/REAL_ESTATE/160539972/city-withdraws-plan-to-create-new-queens-neighborhood" target="_blank">suddenly withdrawn by the Department of City Planning (DCP)</a>. The decision was prompted by a letter from City Council Member Peter Koo, who outlined a comprehensive list of outstanding concerns including &ldquo;that the numbers don&rsquo;t add up&rdquo; for developers who perceive that the rezoning amounts to a &ldquo;downzoning.&rdquo;</p> <p>DCP&rsquo;s decision to pause the study elicited <a href="http://qns.com/story/2016/06/03/calls-for-affordable-flushing-housing-remain-in-aftermath-of-mayors-defeat-of-flushing-west-plan/" target="_blank">mixed reactions</a>, in part because the rezoning study did spotlight the heavy infrastructural strain of Flushing&rsquo;s white hot real estate market and unified multiple community stakeholders to protect the neighborhood&rsquo;s rapidly diminishing affordable housing and advocate for equitable community development.</p> <p>Mayor Bill de Blasio recently penned a <a href="http://www.huffingtonpost.com/bill-de-blasio/the-soul-of-our-city_b_10307708.html" target="_blank">Huffington Post column</a> proposing that in the current market climate of hyper-gentrification, the city&rsquo;s existential identity is defined by residents of public housing and rent-stabilized apartments. As the mayor opines, &ldquo;It&rsquo;s in protecting these people that we protect the soul of our neighborhoods.&rdquo; I dare say the soul of Flushing has been under attack and protecting its diverse, working-class residents is long overdue.</p> <p>Like many neighborhoods of color, affordable housing in Flushing is threatened by predatory equity investment. Investors target &ldquo;underperforming&rdquo; and &ldquo;undervalued&rdquo; multi-family residential buildings in strategic markets (i.e., &ldquo;up and coming&rdquo; and gentrifying areas). They count on capturing unrealized market value through replacing current tenants with those that can afford to pay higher rents or reselling properties at huge profits after making nominal capital improvements. Treetop Development LLC, one of the largest real estate companies in the New York City area, has a business model based on these &ldquo;multi-faceted&rdquo; strategies, to the detriment of communities.</p> <p>Treetop&rsquo;s <a href="http://treetopdev.com/profile.html" target="_blank">online profile</a> notes, &ldquo;We actively acquire and transform existing rental properties in the region by modernizing living spaces, common areas and building systems before returning them to market. We are well-known for creating cutting-edge projects in neighborhoods coming up as desirable new addresses.&rdquo; Since its establishment in 2005, Treetop Development LLC has been one of the region&rsquo;s most active investors in multi-family properties including federally subsidized, project-based Section 8 developments and rent-regulated buildings.</p> <p>In the past few years, Treetop has acquired and flipped numerous rent-stabilized buildings, generating huge profits. In July 2013, Treetop purchased <a href="http://treetopdev.com/projects.php?project=%27west-125th-st" target="_blank">17-27 West 125th Street</a>, a 50-unit rent-stabilized building in Harlem for $13.6 million. According to Treetop&rsquo;s website, &ldquo;17-27 West 125th Street boasts large apartments, which will be renovated upon vacancy to include new wide plank hardwood flooring, modern and chic kitchens and bathrooms, and stainless steel appliances.&rdquo; After spending <a href="http://newyork.citybizlist.com/article/293644/treetop-development-completes-306-million-sale-of-50-unit-apartment-building-at-17-west-125th-street" target="_blank">only $1.5 million on &ldquo;signature&rdquo; capital improvements</a>, Treetop sold the building to Thor Equities for a whopping $30.6 million in August 2015 (a $17 million gross profit after 25 months of ownership).</p> <p>Similarly in 2014, Treetop acquired a portfolio of six rent-stabilized buildings with a total of 139 rental and seven retail units in Washington Heights for $23 million. These properties, referred to as the&nbsp;<a href="http://therealdeal.com/2015/12/14/hillcrest-buys-washington-heights-portfolio-from-treetop/" target="_blank">"Columbia Audubon"</a> portfolio due to their proximity to Columbia University Hospital and Audubon Avenue, were sold a little over a year later, in December 2015, for $36 million to a group of private investors.</p> <p>In describing Treetop&rsquo;s strategy to purchase and flip a <a href="http://therealdeal.com/2015/08/27/bcbs-berger-excelsiors-miller-launch-jv/" target="_blank">multi-family portfolio</a> in Central Harlem, co-principal Adam Mermelstein explained, &ldquo;This portfolio is the perfect example of how picking the neighborhoods, identifying underutilized properties, effective management and recognizing the right time to buy and sell can pay tremendous dividends.&rdquo; The portfolio purchased by Treetop for $22 million in 2013 was comprised of 12 five-story walk-up apartments and included rent-stabilized buildings on St. Nicholas Ave and Frederick Douglass Blvd. Two years later, Treetop sold the portfolio to a newly formed investment firm for $35 million, generating a profit equal to 59% of Treetop&rsquo;s original purchase price.</p> <p>Treetop Development LLC was featured in <a href="http://www.crainsnewyork.com/article/20151204/REAL_ESTATE/151209927/new-jersey-firm-bets-on-queens-buys-138-8-million-apartment-portfolio-in-flushing-and-elmhurst" target="_blank">Crain&rsquo;s New York Business</a> for its enormous $138.8 million acquisition of eight rent-stabilized buildings in Queens representing the county&rsquo;s largest multi-family transaction in 2015. Seven of the rent-stabilized buildings (totaling 489 apartments) are clustered in a three-block area near downtown Flushing and one building is in Elmhurst. Treetop wasted no time in making cosmetic upgrades to common areas such as lobbies and hallways, and renovating vacated apartments. A recent visit and conversation with a long-time, rent-stabilized tenant in one of Treetop&rsquo;s Flushing buildings indicated that the common areas had already undergone capital improvements which permitted the prior landlord to increase rents.</p> <p>Since Treetop&rsquo;s acquisition, tenants have reported <a href="http://a810-bisweb.nyc.gov/bisweb/ComplaintsByAddressServlet?requestid=1&amp;allbin=4114214" target="_blank">construction-related disruption and dust</a>, spotty heat and hot water, and a sudden increase in vacant apartments. City Council Member Koo&rsquo;s office has submitted a list of complaints pertaining to these buildings to 311.</p> <p>This past year has been very busy for Treetop as it expands its extensive portfolio of rent-stabilized buildings in <a href="http://therealdeal.com/2015/05/11/treetop-pays-38m-for-8-building-manhattan-leg-of-three-borough-pool/" target="_blank">Harlem</a> and Flushing, sold <a href="http://arielpa.nyc/press-release/ariel-property-advisors-assists-treetop-development-in-acquisition-of-mott-haven-development-site" target="_blank">&ldquo;select holdings at high profit margins,&rdquo;</a> and refinanced some properties through mortgage consolidation, as in the case of four Brooklyn properties including 188 South 3rd St., a rent-stabilized building in Southside Williamsburg. Among its early acquisitions in New York City&rsquo;s multi-family market, Treetop paid a little over $5 million in August 2006 for the 41-unit building, intending to <a href="http://50.56.218.160/archive/category.php?category_id=5&amp;id=9837" target="_blank">convert the apartments into upscale rentals</a>. A few months later, <a href="http://www.nypress.com/rent-strike/" target="_blank">various publications</a> including the Metropolitan Council for Housing&rsquo;s newsletter detailed the reasons why Treetop&rsquo;s Mermelstein was named the city&rsquo;s <a href="http://metcouncilonhousing.org/sites/default/files/back_issues/2007/tenant_inquilino_2007_february.pdf" target="_blank">&ldquo;most abusive landlord&rdquo;</a> by a group of tenant advocacy organizations.</p> <p>Treetop&rsquo;s 188 South 3rd St. was in the news again in July 2013 when a <a href="https://www.dnainfo.com/new-york/20130718/williamsburg/massive-fire-torches-top-floor-of-williamsburg-building" target="_blank">three-alarm fire</a> erupted between the ceiling of the top floor and the roof. Over one hundred firefighters responded to the early morning blaze that took approximately two hours to extinguish. <a href="http://brooklyn.news12.com/news/3-alarm-fire-breaks-out-in-williamsburg-apartment-building-on-south-3rd-street-1.5716072" target="_blank">Several tenants were interviewed</a> noting long-standing electrical problems and non-professional repairs. Charlin Ramos said to Brooklyn News 12, &ldquo;I knew this was going to happen, I predicted it was going to happen.&rdquo; Jacqueline Jimenez claimed Treetop ignored numerous calls from tenants. Extensive damage required many tenants to vacate and according to the <a href="http://a810-bisweb.nyc.gov/bisweb/PropertyProfileOverviewServlet?boro=3&amp;houseno=188&amp;street=south%203%20street&amp;requestid=0&amp;s=A03C41B885B461E4F46BD08866A7430E" target="_blank">Department of Buildings</a>, the current status of 188 South 3rd St. is that a partial vacate order remains in effect as well as civil penalties and an outstanding <a href="http://www1.nyc.gov/assets/buildings/rules/1_RCNY_102-01.pdf" target="_blank">Class 1 violation</a> defined as &ldquo;immediately hazardous.&rdquo;</p> <p>The same weekend that Mayor de Blasio&rsquo;s column was published by Huffington Post, the New York Times published an opinion piece titled, <a href="http://www.nytimes.com/2016/06/05/opinion/sunday/how-to-force-out-rent-controlled-tenants.html?smid=fb-share&amp;_r=0" target="_blank">How to Force Out Rent-Controlled Tenants</a>. The timing and message of these articles underscore the precarity of rent-regulated housing that has been affordable to working-class New Yorkers. Key forces destabilizing the city&rsquo;s neighborhoods, especially its communities of color, are the tactics deployed by predatory equity investors such as Treetop Development LLC. While the Flushing West rezoning study provided an opportunity to highlight the outstanding need for affordable housing, the current state of the neighborhood&rsquo;s rent-stabilized housing requires immediate action to protect long-time tenants, or as the mayor would describe them, the soul of Flushing.</p> <p>In early May, the Flushing West Community Alliance (FRCA) released a <a href="http://minkwon.org/downloads/FRCA_Flushing_White_Paper_28apr16.pdf" target="_blank">comprehensive research report</a> that includes anti-harassment and anti-displacement measures. Based on numerous discussions with rent-stabilized tenants, FRCA recommends that landlords with a history of tenant harassment should not be able to receive permits necessary for renovations that will enable them to increase rents. At minimum, the <a href="http://bradlander.nyc/news/updates/city-council-ramps-up-efforts-to-preserve-existing-housing-for-low-income-new-yorkers" target="_blank">four bills</a> introduced to the New York City Council earlier this year, including Brad Lander&rsquo;s &ldquo;Certificate of No Harassment,&rdquo; should be acted on immediately. Although the Flushing West rezoning process is temporarily on hold, speculative real estate market conditions have not abated which means rent stabilized tenants need strengthened protections now.</p> <p>***<br />Tarry Hum is a professor at the City University of New York and author of <a href="https://www.amazon.com/Making-Global-Immigrant-Neighborhood-Brooklyns/dp/143991091X" target="_blank">Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park</a>.</p> <p>

***
Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

</p>
Flushing’s Affordable Housing at Risk 2016-05-01T04:00:00+00:00 2016-05-01T04:00:00+00:00 http://www.gothamgazette.com/130-opinion/6311-flushing-s-affordable-housing-at-risk Ben Max <p><img src="http://www.gothamgazette.com/images/Flushing-Sanford-Ave.jpg" alt="Flushing town hall" height="424" width="600" /></p> <hr /> <p dir="ltr">Last week, the New York City Council approved the contested <a href="http://www.gothamgazette.com/index.php/city/6287-east-new-york-deal-sets-precedent-for-wave-of-rezonings" target="_blank">East New York rezoning</a> - the first of 15 proposed neighborhood rezonings through which Mayor de Blasio intends to advance his goal of preserving 120,000 units of affordable housing and producing 80,000 new units at below-market rents. Described by some as a rezoning taking place “<a href="http://citylimits.org/2016/02/09/plan-to-rezone-flushing-west-flies-under-the-radar/" target="_blank">under the radar</a>,” the Department of City Planning (DCP) has been conducting a planning study and holding numerous community town halls on a ten-block area of Queens dubbed “Flushing West.”</p> <p dir="ltr">This proposed rezoning would have a transformative impact on Flushing, a densely populated, pan-Asian immigrant neighborhood with a sizable Latino population and a small but historic African-American community. Although DCP recently postponed the April certification of the Flushing West rezoning plan (which would have initiated the uniform land use review procedure (ULURP), the plan continues to move forward and remains a key piece of the mayor’s controversial housing program.</p> <p dir="ltr">As the rezoning of Flushing West moves forward, the existing affordable housing stock there is at risk.</p> <p dir="ltr">After much public debate and protest, Mayor de Blasio’s mandatory inclusionary housing (MIH) plan was approved by the New York City Council <a href="http://www.gothamgazette.com/index.php/government/6222-sides-near-a-deal-on-major-zoning-changes-aimed-at-creating-affordable-housing" target="_blank">in March</a>. MIH is a citywide policy that requires residential developers in newly upzoned areas to provide some below market-rate housing, either inside a new development or somewhere off site. As MIH (and the related Zoning for Quality and Affordability (ZQA) plan) moved through ULURP, communities contested the plan on numerous grounds: it would not build enough affordable housing; the affordable housing that would be built would be too expensive for those most in need; increased density would exacerbate transportation, education, and infrastructure problems; large new buildings would alter local streetscapes; and, most importantly, the plan would spur luxury development and hasten gentrification.</p> <p dir="ltr">Relative to the vigorous and sustained public debate on these issues, there has been little public discussion on the ways that the city’s proposed rezonings are already impacting New York City’s largest form of affordable housing: rent regulation through rent control and rent stabilization.</p> <p dir="ltr">Rent regulation accounts for nearly all of Flushing’s affordable housing. The neighborhood’s white-hot real estate market, however, increasingly threatens these rent-stabilized apartments. &nbsp;DCP’s proposed rezoning - which links the production of affordable housing with the construction of thousands of luxury units - has only increased land speculation and, therefore, landlords’ imperative to deregulate their holdings. Though the rezoning has been paired with an increase in funding for anti-eviction legal services, it has already catalyzed a number of <a href="http://therealdeal.com/2015/07/15/developer-plans-new-flushing-mixed-use-residential-complex/" target="_blank">hyper-speculative real estate transactions</a> in downtown Flushing, including within the rezoning area.</p> <p dir="ltr">Based on the 2014 state Division of Housing and Community Renewal (DHCR) <a href="http://www.nycrgb.org/downloads/resources/sta_bldngs/2014QueensBldgs.pdf" target="_blank">list of rent-regulated buildings</a>, there are 388 rent-stabilized buildings in Flushing. This list, however, includes buildings that have partially converted to co-ops, meaning some units are owned by residents. Conversion of rental buildings to cooperatives requires a minimum of 15 percent of tenants opting to purchase their apartments. DHCR lists properties as rent stabilized as long as there is at least one rent-stabilized unit in the building.</p> <p dir="ltr">Based on a review of city<a href="https://www1.nyc.gov/site/finance/taxes/property-annualized-sales-update.page" target="_blank"> Department of Finance sales data</a>, 81 buildings, including five that converted to cooperative in the past year or so, recorded 1,198 apartment sales since 2010. In addition to the hundreds of co-op sales in rent-stabilized buildings, 42 buildings (with a combined total of 1,800 rent-stabilized apartments) were also sold during the study period of 2010 to January 2016. The sold buildings represent a sizable 11 percent of all of Flushing’s rent-stabilized buildings.</p> <p dir="ltr">In December 2015, a massive sale of eight rent-stabilized buildings, all but one located a few blocks from Flushing’s waterfront, was covered by <a href="http://www.crainsnewyork.com/article/20151204/REAL_ESTATE/151209927/new-jersey-firm-bets-on-queens-buys-138-8-million-apartment-portfolio-in-flushing-and-elmhurst" target="_blank">Crain’s New York Business</a>. These rent-stabilized buildings, comprising 488 apartments, are clustered on Flushing’s Sanford Avenue and were sold to an investor group represented by New Jersey-based Treetop Development LLC. ACORE, a California-based investment fund established in May 2015 - only a few months before the Sanford Avenue purchases - financed the hefty $138.8 million purchase. ACORE is capitalized by a $1.6 billion commitment from Delphi Financial Group Inc., a wholly-owned subsidiary of the Tokio Marine Group, Japan’s largest publicly traded insurer. &nbsp;The purchase of seven Sanford Avenue rent-stabilized buildings, financed by transnational private equity investors, illustrates how multi-family, rental properties in the outer boroughs are treated as global investment vehicles with tremendous potential profits.</p> <p dir="ltr">In order for those profits to be realized, however, rents will have to increase substantially, and in all likelihood, the apartments will be deregulated. Although Treetop Development LLC principal <a href="http://www.crainsnewyork.com/article/20151204/REAL_ESTATE/151209927/new-jersey-firm-bets-on-queens-buys-138-8-million-apartment-portfolio-in-flushing-and-elmhurst" target="_blank">Adam Mermelstein reassured</a>, “We’re not running after tenants like some landlords do, trying to induce turnover on the apartments to get them to market rate,” their $10 million investment in “an intensive capital expenditures program” portends displacement. Treetop Development LLC plans to renovate apartments and landscape gardens in order to “<a href="http://treetopdev.com/projects.php?project='the-summit'" target="_blank">remake the Flushing Portfolio into one of the premier residential addresses in Flushing, Queens</a>.” This rebranding language underscores that so-called “major capital improvements” in rent-stabilized buildings are a primary landlord strategy to permanently raise rents and facilitate tenant turnover.</p> <p dir="ltr">This speculative activity is not confined to privately-owned buildings. Queens College students learned from a local resident that tenants were recently evicted from 132-30 Sanford Avenue. This building is listed on two real estate websites as for sale, with one site noting that the building is <a href="http://www.elliman.com/new-york-city/132-30-sanford-avenue-queens-ytaqkjg" target="_blank">currently under contract</a>. Further research indicated the building is owned by one of Asian Americans for Equality (AAFE)’s tax-exempt organizations - Community Homes Housing Development Fund Company Inc. According to <a href="https://a836-acris.nyc.gov/DS/DocumentSearch/DocumentImageView?doc_id=2008093001230001" target="_blank">the building’s deed</a>, AAFE purchased the building in 2008 for $3.5 million. Online realtor descriptions highlight the gap in current and potential rent revenues as a key selling point: “<a href="http://www.loopnet.com/Listing/14362996/132-30-Sanford-Ave-Flushing-NY/" target="_blank">The average monthly rent is $1,023 month, approx. 76% of the current market value, offering tremendous upside potential</a>.” The building is now selling for $9.8 million - a 180 percent increase in just eight years.</p> <p dir="ltr">In October 2015, DCP completed a <a href="http://www1.nyc.gov/assets/planning/download/pdf/applicants/env-review/flushing-west/draft_scope.pdf" target="_blank">Draft Scope of Work for an Environmental Impact Statement</a>, which identified 13 projected development sites and included a breakdown of anticipated outcomes based on the proposed upzoning. On these 13 sites, DCP expects the production of 2,062 residential units (excluding 1,254 units of luxury housing currently under construction at Sky View Parc) of which 516 would be affordable to households earning 60 percent of AMI ($54,360 annual income for a family of four) or 619 units affordable to households earning 80 percent AMI ($69,040 annual income for a family of four).</p> <p dir="ltr">DCP’s Draft Scope of Work was completed before the City Council added the option of 20 percent of units affordable at 40 percent AMI, which would mean the Flushing West rezoning may result in 412 units affordable to a family of four with an annual income of $36,240. The <a href="http://qns.com/story/2015/11/09/flushing-community-groups-join-together-to-fight-for-affordable-housing/" target="_blank">Flushing Rezoning Community Alliance</a>, a coalition of nonprofits, unions, and churches, fought hard for this option because the median household income for downtown Flushing residents is just $34,428. The final Flushing plan may also include additional HPD subsidies toward deeper affordability, but the extent, quantity, and longevity of those subsidies is yet to be determined.</p> <p dir="ltr">With Flushing’s remaining rent-regulated apartments at stake, it is important to look at the balance of what is being offered now: the proposed rezoning will produce thousands of market-rate, luxury housing units; a mere 412 apartments will be affordable to average Flushing residents (and then only if the local City Council member and developers choose the newly added option); and nothing at all will be built for families making below-median wages.</p> <p dir="ltr">The neighborhood’s wholesale transformation, which has already begun in expectation of an upzoning, would sweep rent-regulated housing up in its wake and trigger even more harassment, rent hikes, and evictions than the neighborhood has already seen. This scenario demonstrates that Mayor de Blasio’s MIH program is less about preserving neighborhood affordability than turning working-class spaces into luxury enclaves, with small pockets for the middle class.</p> <p dir="ltr">In Flushing’s overheated real estate market, where even nonprofits enrich themselves by selling rent-stabilized buildings for enormous profits, this planned rezoning is already adding fuel to fires of gentrification and displacement. The addition of a few hundred units of affordable housing could not possibly stem the transformative effects of global finance and commercial real estate speculation, and the preservation program the city is currently pursuing will do little to protect rent-regulated apartments.</p> <p dir="ltr">City planners must stop acting as if the negative consequences of upzonings on rent-regulated housing will be mitigated by the paltry provision of new quasi-affordable units, or by increased investments in legal services (though the latter are, of course, important). Instead, we need to prioritize the preservation of rent-stabilized apartments and the production of truly affordable housing, decoupled from market-rate development and its attendant impacts on neighborhood land markets.</p> <p dir="ltr">***<br />Tarry Hum is a Professor at the City University of New York and author of <a href="http://www.temple.edu/tempress/titles/2299_reg.html" target="_blank">Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park</a>.</p> <p dir="ltr">Samuel Stein is a PhD student in Geography at the Graduate Center, City University of New York.</p> <p>

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</p>
<p><img src="http://www.gothamgazette.com/images/Flushing-Sanford-Ave.jpg" alt="Flushing town hall" height="424" width="600" /></p> <hr /> <p dir="ltr">Last week, the New York City Council approved the contested <a href="http://www.gothamgazette.com/index.php/city/6287-east-new-york-deal-sets-precedent-for-wave-of-rezonings" target="_blank">East New York rezoning</a> - the first of 15 proposed neighborhood rezonings through which Mayor de Blasio intends to advance his goal of preserving 120,000 units of affordable housing and producing 80,000 new units at below-market rents. Described by some as a rezoning taking place “<a href="http://citylimits.org/2016/02/09/plan-to-rezone-flushing-west-flies-under-the-radar/" target="_blank">under the radar</a>,” the Department of City Planning (DCP) has been conducting a planning study and holding numerous community town halls on a ten-block area of Queens dubbed “Flushing West.”</p> <p dir="ltr">This proposed rezoning would have a transformative impact on Flushing, a densely populated, pan-Asian immigrant neighborhood with a sizable Latino population and a small but historic African-American community. Although DCP recently postponed the April certification of the Flushing West rezoning plan (which would have initiated the uniform land use review procedure (ULURP), the plan continues to move forward and remains a key piece of the mayor’s controversial housing program.</p> <p dir="ltr">As the rezoning of Flushing West moves forward, the existing affordable housing stock there is at risk.</p> <p dir="ltr">After much public debate and protest, Mayor de Blasio’s mandatory inclusionary housing (MIH) plan was approved by the New York City Council <a href="http://www.gothamgazette.com/index.php/government/6222-sides-near-a-deal-on-major-zoning-changes-aimed-at-creating-affordable-housing" target="_blank">in March</a>. MIH is a citywide policy that requires residential developers in newly upzoned areas to provide some below market-rate housing, either inside a new development or somewhere off site. As MIH (and the related Zoning for Quality and Affordability (ZQA) plan) moved through ULURP, communities contested the plan on numerous grounds: it would not build enough affordable housing; the affordable housing that would be built would be too expensive for those most in need; increased density would exacerbate transportation, education, and infrastructure problems; large new buildings would alter local streetscapes; and, most importantly, the plan would spur luxury development and hasten gentrification.</p> <p dir="ltr">Relative to the vigorous and sustained public debate on these issues, there has been little public discussion on the ways that the city’s proposed rezonings are already impacting New York City’s largest form of affordable housing: rent regulation through rent control and rent stabilization.</p> <p dir="ltr">Rent regulation accounts for nearly all of Flushing’s affordable housing. The neighborhood’s white-hot real estate market, however, increasingly threatens these rent-stabilized apartments. &nbsp;DCP’s proposed rezoning - which links the production of affordable housing with the construction of thousands of luxury units - has only increased land speculation and, therefore, landlords’ imperative to deregulate their holdings. Though the rezoning has been paired with an increase in funding for anti-eviction legal services, it has already catalyzed a number of <a href="http://therealdeal.com/2015/07/15/developer-plans-new-flushing-mixed-use-residential-complex/" target="_blank">hyper-speculative real estate transactions</a> in downtown Flushing, including within the rezoning area.</p> <p dir="ltr">Based on the 2014 state Division of Housing and Community Renewal (DHCR) <a href="http://www.nycrgb.org/downloads/resources/sta_bldngs/2014QueensBldgs.pdf" target="_blank">list of rent-regulated buildings</a>, there are 388 rent-stabilized buildings in Flushing. This list, however, includes buildings that have partially converted to co-ops, meaning some units are owned by residents. Conversion of rental buildings to cooperatives requires a minimum of 15 percent of tenants opting to purchase their apartments. DHCR lists properties as rent stabilized as long as there is at least one rent-stabilized unit in the building.</p> <p dir="ltr">Based on a review of city<a href="https://www1.nyc.gov/site/finance/taxes/property-annualized-sales-update.page" target="_blank"> Department of Finance sales data</a>, 81 buildings, including five that converted to cooperative in the past year or so, recorded 1,198 apartment sales since 2010. In addition to the hundreds of co-op sales in rent-stabilized buildings, 42 buildings (with a combined total of 1,800 rent-stabilized apartments) were also sold during the study period of 2010 to January 2016. The sold buildings represent a sizable 11 percent of all of Flushing’s rent-stabilized buildings.</p> <p dir="ltr">In December 2015, a massive sale of eight rent-stabilized buildings, all but one located a few blocks from Flushing’s waterfront, was covered by <a href="http://www.crainsnewyork.com/article/20151204/REAL_ESTATE/151209927/new-jersey-firm-bets-on-queens-buys-138-8-million-apartment-portfolio-in-flushing-and-elmhurst" target="_blank">Crain’s New York Business</a>. These rent-stabilized buildings, comprising 488 apartments, are clustered on Flushing’s Sanford Avenue and were sold to an investor group represented by New Jersey-based Treetop Development LLC. ACORE, a California-based investment fund established in May 2015 - only a few months before the Sanford Avenue purchases - financed the hefty $138.8 million purchase. ACORE is capitalized by a $1.6 billion commitment from Delphi Financial Group Inc., a wholly-owned subsidiary of the Tokio Marine Group, Japan’s largest publicly traded insurer. &nbsp;The purchase of seven Sanford Avenue rent-stabilized buildings, financed by transnational private equity investors, illustrates how multi-family, rental properties in the outer boroughs are treated as global investment vehicles with tremendous potential profits.</p> <p dir="ltr">In order for those profits to be realized, however, rents will have to increase substantially, and in all likelihood, the apartments will be deregulated. Although Treetop Development LLC principal <a href="http://www.crainsnewyork.com/article/20151204/REAL_ESTATE/151209927/new-jersey-firm-bets-on-queens-buys-138-8-million-apartment-portfolio-in-flushing-and-elmhurst" target="_blank">Adam Mermelstein reassured</a>, “We’re not running after tenants like some landlords do, trying to induce turnover on the apartments to get them to market rate,” their $10 million investment in “an intensive capital expenditures program” portends displacement. Treetop Development LLC plans to renovate apartments and landscape gardens in order to “<a href="http://treetopdev.com/projects.php?project='the-summit'" target="_blank">remake the Flushing Portfolio into one of the premier residential addresses in Flushing, Queens</a>.” This rebranding language underscores that so-called “major capital improvements” in rent-stabilized buildings are a primary landlord strategy to permanently raise rents and facilitate tenant turnover.</p> <p dir="ltr">This speculative activity is not confined to privately-owned buildings. Queens College students learned from a local resident that tenants were recently evicted from 132-30 Sanford Avenue. This building is listed on two real estate websites as for sale, with one site noting that the building is <a href="http://www.elliman.com/new-york-city/132-30-sanford-avenue-queens-ytaqkjg" target="_blank">currently under contract</a>. Further research indicated the building is owned by one of Asian Americans for Equality (AAFE)’s tax-exempt organizations - Community Homes Housing Development Fund Company Inc. According to <a href="https://a836-acris.nyc.gov/DS/DocumentSearch/DocumentImageView?doc_id=2008093001230001" target="_blank">the building’s deed</a>, AAFE purchased the building in 2008 for $3.5 million. Online realtor descriptions highlight the gap in current and potential rent revenues as a key selling point: “<a href="http://www.loopnet.com/Listing/14362996/132-30-Sanford-Ave-Flushing-NY/" target="_blank">The average monthly rent is $1,023 month, approx. 76% of the current market value, offering tremendous upside potential</a>.” The building is now selling for $9.8 million - a 180 percent increase in just eight years.</p> <p dir="ltr">In October 2015, DCP completed a <a href="http://www1.nyc.gov/assets/planning/download/pdf/applicants/env-review/flushing-west/draft_scope.pdf" target="_blank">Draft Scope of Work for an Environmental Impact Statement</a>, which identified 13 projected development sites and included a breakdown of anticipated outcomes based on the proposed upzoning. On these 13 sites, DCP expects the production of 2,062 residential units (excluding 1,254 units of luxury housing currently under construction at Sky View Parc) of which 516 would be affordable to households earning 60 percent of AMI ($54,360 annual income for a family of four) or 619 units affordable to households earning 80 percent AMI ($69,040 annual income for a family of four).</p> <p dir="ltr">DCP’s Draft Scope of Work was completed before the City Council added the option of 20 percent of units affordable at 40 percent AMI, which would mean the Flushing West rezoning may result in 412 units affordable to a family of four with an annual income of $36,240. The <a href="http://qns.com/story/2015/11/09/flushing-community-groups-join-together-to-fight-for-affordable-housing/" target="_blank">Flushing Rezoning Community Alliance</a>, a coalition of nonprofits, unions, and churches, fought hard for this option because the median household income for downtown Flushing residents is just $34,428. The final Flushing plan may also include additional HPD subsidies toward deeper affordability, but the extent, quantity, and longevity of those subsidies is yet to be determined.</p> <p dir="ltr">With Flushing’s remaining rent-regulated apartments at stake, it is important to look at the balance of what is being offered now: the proposed rezoning will produce thousands of market-rate, luxury housing units; a mere 412 apartments will be affordable to average Flushing residents (and then only if the local City Council member and developers choose the newly added option); and nothing at all will be built for families making below-median wages.</p> <p dir="ltr">The neighborhood’s wholesale transformation, which has already begun in expectation of an upzoning, would sweep rent-regulated housing up in its wake and trigger even more harassment, rent hikes, and evictions than the neighborhood has already seen. This scenario demonstrates that Mayor de Blasio’s MIH program is less about preserving neighborhood affordability than turning working-class spaces into luxury enclaves, with small pockets for the middle class.</p> <p dir="ltr">In Flushing’s overheated real estate market, where even nonprofits enrich themselves by selling rent-stabilized buildings for enormous profits, this planned rezoning is already adding fuel to fires of gentrification and displacement. The addition of a few hundred units of affordable housing could not possibly stem the transformative effects of global finance and commercial real estate speculation, and the preservation program the city is currently pursuing will do little to protect rent-regulated apartments.</p> <p dir="ltr">City planners must stop acting as if the negative consequences of upzonings on rent-regulated housing will be mitigated by the paltry provision of new quasi-affordable units, or by increased investments in legal services (though the latter are, of course, important). Instead, we need to prioritize the preservation of rent-stabilized apartments and the production of truly affordable housing, decoupled from market-rate development and its attendant impacts on neighborhood land markets.</p> <p dir="ltr">***<br />Tarry Hum is a Professor at the City University of New York and author of <a href="http://www.temple.edu/tempress/titles/2299_reg.html" target="_blank">Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park</a>.</p> <p dir="ltr">Samuel Stein is a PhD student in Geography at the Graduate Center, City University of New York.</p> <p>

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</p>